Reference no: EM132820711
Hinchcliffe Cards was started by William Hinchcliffe in 1874. Hinchcliffe had an artistic talent which he used for drawing individual greetings cards for his family and friends. As demand for the products he made increased, members of William's family joined him in creating the more intricately decorated cards. As the products of the firm grew in popularity, Hinchcliffe cards began to expand, investing in its first printing press in the early 1900s. The business continued to grow and moved into the mass production of greetings cards for the family market. William, who by then was managing director of the firm, was keen that some element of the origins of the company remained, and despite the focus on mass production, a small sideline in the design and production of handmade cards remained.
After William Hinchcliffe died in 1934 the firm remained in the family and is now managed by chief executive James Hinchcliffe, William's great-grandson. The company headquarters, warehouse and packaging plant are housed in the same Lancashire town in England where William originally started the business in his own home. Indeed, the firm prides itself on being a family firm and having a paternalistic culture. James Hinchcliffe is often to heard to say 'Now what would great-grandfather do in this situation', when discussing any key strategic or problem issues. Despite the paternalistic culture, James is keen that the company moves with the times. Having recently completed an MBA at a local business school, he is keen to hear about new ideas and new methods of working that he can introduce in to the company.
The company employs about 250 people. Seventy per cent of the workforce are women who work mainly on the production line and 10 per cent are from ethnic minority backgrounds. All the managers and senior management team, except the human resource manager (a white woman) are white males. Turnover in the company is generally low, though James Hinchcliffe suspects that there is a growing unease among the workforce about a number of issues.
The cards produced by the company feed in to two main markets. First, there is the mass production of greetings cards. In particular the firm recently won a couple of key contracts to produce Christmas cards for two of the larger chain stores which are internationally located. These contracts meant a considerable expansion of business which has caused some problems in terms of work scheduling as production needs to be far higher in the spring months to meet the Christmas demand. In particular, some of the more sophisticated machines that are used occasionally, for foiling for example, are in 100 per cent use at this particular time. Putting coloured or silver foil on a card is an expensive process and the two men who work that machine are highly skilled. Currently there is a shortage of such skills within the printing industry. To deal with the increase in output required at this time of year, the firm has tended to employ around 20 casual workers for the spring period when these cards are produced. There is evidence, however, that the permanent production workers display animosity towards the temporary workers. As one suggested:
They're just here to make a quick buck, they don't seem bothered about the quality of what they do, their mistakes affect all of our bonuses.
The production workers have also recently been complaining about some other issues to do with their opportunities in the workplace. Some of the female workers have been asking why they haven't been trained on the more complex machines, which seem to be used exclusively by the male workers. Indeed, it is the production jobs based on those machines that carry the highest remuneration. Similarly a gendered division of labour also exists in other areas of the factory, for example the packing area where the cards are packed into boxes for distribution is populated exclusively with female workers. Additionally, there are concerns among the female workers that they are expected to work very long hours at short notice during peak production periods. This is seen to interfere with their family lives. As one suggested:
They expect us to work into the evening at the drop of a hat but we don't get that flexibility in return. Cheryl, who recently left to have a baby, wanted to come back and work here part time, but they said they couldn't slot her in. It would be too difficult to have one person working different hours from everyone else. The men may want to rake in the overtime payments but some of us can't just be in the factory every hour of the day.
Apart from these issues, the production workers are generally happy about their work. Hinchcliffe's has a good name in the local area for being a decent employer who pays the going rate for the job. They are almost an institution in the Lancashire mill town in which they are based.
The other market that Hinchcliffe's serves is the demand for handmade products. Orders for these cards come from all over the world. To tap these markets the firm has recently started an internet mail order business. In order to meet the increasing demand for handmade products, production has largely moved out of the factory. The cards are now made by a series of 50 homeworkers who make the cards in their own homes and are then sold to various specialist gift shops around the UK. These homeworkers are mainly women from ethnic minority groups. One issue that concerns the firm is the high rate of turnover among the homeworkers. They are generally perceived as having little loyalty to the firm and are unreliable in meeting agreed dates for production. There has been some talk within the firm of investing in a team of designers employed officially by the firm who can be based in the firm's headquarters. The plan is that some of the current homeworkers would be employed on this basis. Early evidence suggests that they may not be particularly interested in this option. Indeed, the majority of these workers are female who fit in their drawing work with looking after small children. Additionally, their view is that the company often treats them with little respect. An example of this is the common complaint that the materials needed to make the cards are often dropped off at their homes later than promised, sometimes with incorrect specifications. One homeworker has hinted that there may be some covert racism in the way some of the home- workers are treated.
There is a recognition within the senior management team that the company is in a position to expand considerably through the internet side of the business. This means that there is an opportunity for the global emergence of the Hinchcliffe brand, something that James is keen to do. The firm already had some presence in European markets which had emerged from the entrepreneurial activities of a couple of the sales managers, however the Board are aware that in order to compete with other internet based retailers, they need to become more efficient at producing the handmade cards more quickly and then delivering them on time. The regular publicly accessible ratings of firms on internet sites mean that just a couple of individual late deliveries could threaten the business of a firm seeking to expand in this way. Specifically, the good reputation of Hinchcliffe's may be at risk.
The prospect of this international expansion raises a number of issues for James Hinchcliffe. He is desperately keen to investigate the available avenues, but is also keen that the firm retains its Lancashire roots. He believes that the handmade products are just as good and as popular as the product his great-grandfather produced years ago. He recently arranged an away day with his senior management team where they had the opportunity to identify the potential strengths and opportunities in diversifying their business in this way. The management team identified that one of the greatest challenges required with such a strategy would be getting the homeworkers on board. As the production director stated:
If we moved in that direction we could no longer deal with them dropping the cards off here at the factory a day late because the baby was sick or whatever. In fact we may have to abandon them altogether and go for an in-house design team. I know your great-grandfather was always keen to support the local community but maybe things have to change at some point. It's just very hard to get people like them working to our schedule.
Other members of the senior management team responded to this in a number of ways. One suggested that the company would lose considerably if the homeworkers were replaced:
They have very different specialist skills. There is no way we could replicate those if we moved to just a couple of in-house designers.
There was also some debate about how the homemade cards were a unique selling point for Hinchcliffe's, and that these would be the key products sold over the internet. Therefore without these specialist workers, there would be little point in the firm attempting to address more international markets. The marketing director pointed out that it was this side of the business that needed some development
Given the two big contracts we have recently got, we are clearly delivering what is needed inter- nationally in the mass-produced part of the business. I know the staff moan a bit, especially some of those women, but we seem to be doing ok. It's those homeworkers we need to make more reliable. He outlined how his internet-based research of competitors in the handmade cards business has indicated that most of the other outlets selling through the internet just had one or two people working for them. So for him:
When you think of all the staff resources we have at hinchcliffe's as a whole, there must be a way we can really take on that market - we just need to get all our people on board and involved. At this stage of the discussion the HR director interjected. She said that she thought that some of the issues that were being faced at the company were managing diversity issues:
What we are talking about here really is issues about how we manage diverse groups of staff in order to harness the potential of all of our em-ployees, both those who work in the factory and those who work at home
Other members of the management team were nodding at this point, agreeing that there may be something of interest in the idea of managing diversity. However, none of them felt that they were in a position to advise James about how to progress. At the end of the meeting the team agreed to approach a diversity consultant to ask them for any advice about resolving some of their diversity issues in order to progress the strategy of developing the business internationally.
(a) Identify two (2) major diversity issues being faced by Hinchcliffe Cards?
(b) As the Diversity Consultant recommend and discuss three (3) strategies that can be used address the issues you identified in (a) above. Ensure that the measures proposed are suitable to the specific and unique circumstances of Hinchcliffe Cards.