Task 6 – Report for International HR Function
To conclude the IHRM Portfolio, we want to draw together the theory that you have covered on the IHRM module. For this final task, you are asked to prepare a report on optimising the effectiveness of international assignments for PPV (between 650 and 800 words max). This report is worth 30 marks.
Before you begin, you need to find out what happened after the sale of Vogelhaus, as the saga continued……..
The Vogelhaus Story Continued
Two weeks before the sale of Vogelhaus was finalised, PPV hit the international headlines as Prism Fashions, an Anglo-Irish company owned by the group, was found guilty of using child labour in the production of some of their garments. The German press published news of the sale of Vogelhaus and there was an outcry, especially within social media, with many Germans disappointed – and even angry – that this much-loved German organisation was being sold to an apparently greedy and unscrupulous American multinational.
It has now been 2 years since the sale of Vogelhaus. The scandal of child labour in Prism Fashions resonated throughout the other companies in the PPV group and the company found themselves in the spotlight for several months afterwards. PPV invested heavily in rebuilding the image of the parent group in the wake of the scandal and are now very careful to monitor what happens in their supply chains.
In Germany, after the takeover of Vogelhaus, PPV made a number of significant changes to the company. American buyers made significant cost savings as products were sourced from South East Asia and several lines, including home furnishings, were removed from the stores and made available only in the online stores. These changes were part of a radical move to attract a younger, professional customer and to distance the company somewhat from its original – as one of the American managers called it – shabby chic image.
In terms of HR, James North’s secondment from the parent company was deemed a great success as practices such as performance appraisals and reward were brought in line with other firms in the group. In particular, Vogelhaus’ ‘culture keys’ were replaced by the strategic goals of the parent company.
The outcome for Vogelhaus was not, however, as PPV had expected. After the changes had been implemented, sales fell as customers – especially the loyal German customer base – were disillusioned with the new branding and apparent inferior quality of Vogelhaus products. Moreover, staff at Vogelhaus were unhappy with the changes made and did not welcome the new HR systems put in place by James North and his team; morale was affected and a high turnover of staff followed.
Six months ago, PPV took the decision to close all Vogelhaus stores in Germany and the Netherlands.
Despite the failure of the business in Germany, the Vogelhaus brand continued to flourish elsewhere, mainly through its online store, which was launched quite soon after the sale. In particular, Vogelhaus saw a high volume of sales from customers in Spain, Scandinavia, Asian and South American countries. Since the closure of the Vogelhaus stores, the online store has continued and PPV are considering the possibility of opening Vogelhaus stores outside Germany. Initial research has suggested that there are 25 countries where Vogelhaus might be relocated. The organisation is aware, however, of the fact that it made a number of mistakes when it entered the German market and is keen to learn from these. In particular, the IHR approach has been highlighted as problematic.
You have been asked to prepare a report for PPV making recommendations for how the organisation should manage any future international assignees. How can the organisation ensure that the right people are being sent out across the group?
You will be assigned one of the countries below where PPV is looking to relocate the Vogelhaus brand and undertake some research on the country (national culture, HRM style etc). Prepare a report (between 650 and 800 words) for PPV. Your report should include a brief introduction to the country and should go on to consider the approaches to HRM within the country in question.