international presentation

HNC Consultants

Bilal, Jagdeep, Jennifer, Max, Reena, & Sarah

Issues

Q & A

Risks and Contingencies

Recommendations

Conclusion

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4

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Agenda

1. High fixed costs

2. Periods of overcapacity

3. Inconsistent product demand

4. Volatile raw material prices

Issue #1: Constraints due to the Industry and Treelin’s Facility

Concerns

1. Replace old machines

• New machines = increase in efficiency

2. Secure long-term contract

• With suppliers & customers

3. Conduct market research

RecommendationsFor Constraints

Risks & Contingencies

• Company currently does not have contract.

• Tap into other segments through market research

Unable to secure

contracts

• Short-term costs, but long-term benefits because machines more efficient

High Costs for machinery

The Stages of an International Acquisition

Stage 1• Searching & Selecting a

partner• Planning for managing

the process of acquisition

Stage 2• Creating new structures,

strategies, and leadership

• Motivate and manage employees

Stage 3• Assessing the new

strategies, structures & culture

• Assessing the new HRM policies and practices

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Issue #2: Culture Integration

Toivonen (Finnish) Treelin (American)Uncertainty Avoidance Tends to avoid risks. Innovation

may be resisted, need for rulesUncertainty accepting. Tolerant of ideas or opinions from anyone

Masculine/ Feminine Emphasis on employees sense of belonging; hiring and work done through groups

Raises based on individual performance appraisals

Individualism/ Collectivism Focus on group-level outcomes; do not conduct performance appraisals

Hired based on skills; raises based on individual performance appraisals

Time Orientation Rewards allocated on an annual basis

Rewards allocated on an annual & quarterly basis

Power Distance 1 level of supervision between floor workers and executives

2 levels of supervision between floor workers and executives

Between Finland and USA

1. Cross-Cultural Training for employees and management of Treelin– Provide outsourced training

2. Management training regarding change in autonomy– Ms. Kempainen will work with management to help adjust them

to communicating with corporate headquarters• Will oversee operations and report to corporate headquarters until

management is accustomed with the way Toivonen operates

RecommendationsFor Culture Integration

• Short-term costs, but long-term benefits because it improves cultural sensitivity High Costs

• Ensure ongoing communication• Reward with positive feedback

and business incentive for compliance

Management resistance

Risks & Contingencies

• Integration and combination are essential for a successful acquisition

• The acquisition process needs to be systematic and incorporate the specific strengths and weaknesses of Treelin

• Close examination of the both company’s policies and processes resulted in a creation of new processes for Treelin

Issue #3: New HRM Policies

• Hiring done by supervisors• Based on skill requirements for the entry-level job• Some consideration for future growth

• Hired by work group• Hired based on willingness to learn • Focus on “social fit”

• Hiring is done by supervisors, using structured interviews• Hiring will be based on: skills AND a willingness to learn plus an

internal need to constantly improve

Integrating the Hiring Process

Recommendation

Treelin’s Hiring Structure

New Integrated Promotion

Structure

Toivonen’s Hiring Structure

• Focus on improving individual performance• Maintaining a core group of employees who could keep the mill

running at highest level of efficiency

• Training & Development tailored to the needs of individual employees and the needs of the organization

• Quality online training on topics important to the firm

• Online, user friendly training based on company and individual needs

• Secondary focus on increasing efficiency and promoting growth within the company

Integrating the Training & Development Process

Recommendation

Treelin’s Training & Development

Structure

New Integrated Training &

Development

Structure

Toivonen’s Training &

Development Structure

• Promotions are generally done from within the organization, although frequently there was a lack of qualified internal candidates

• No given promotion policies and procedures

• Promotion from employee to management will be based on a succession management chart

Integrating the Promotion Process

Recommendation

Treelin’s Promotion Structure

New Integrated Promotion

Structure

Toivonen’s Promotion Structure

• Pay for new hires was determined by market surveys of paper production in the region

• Pay raises given based on annual individual performance• Management received bonuses based on plant production, with no

regard for financial performance of the parent firm

• Ratio of 1:7 from the lowest paid worker to the highest paid worker• Centralized compensation system that includes a global job

evaluation with salary ranges determined by continent• Management bonuses based on both individual performance and

overall corporate performance

• Pay for new hires will remain the same, as well as their pay raises• Introduce a profit sharing plan based on overall performance of

Treelin

Integrating the Compensation Structure

Recommendation

Treelin’s Compensation

Structure

New Integrated Compensation

Structure

Toivonen’s Compensation

Structure

• Management received bonuses based on plant production, with no regard for financial performance of the parent firm

• Management bonuses based on both individual performance and overall corporate performance

• Using Toivonen’s bonus structure

Integrating the Bonus Structure

Recommendation

Treelin’s Bonus Structure

New Integrated Bonus

Structure

Toivonen’s Bonus Structure

• Standard for the industry• 35%-40% of the payroll was spent on benefits including health

care insurance, a 401k plan, STD and LTD plans, paid vacation time, dental insurance and the provision of safety apparel at no charge to the employees

• Unlimited sick time• Employee Assistance Program (EAP)• Flextime for all employees

• Using Treelin’s Benefits structure and include EAP• Offer employees flextime to help meet their personal

commitments

Integrating the Benefits Structure

Recommendation

Treelin’s Benefits Structure

New Integrated Benefits

Structure

Toivonen’s Benefits Structure

• No formal communication structure

• Use of communication tools for all employees• Email anonymous questions to their managers and questions were

answered on the Intranet web-page• Communication guru: one layer of supervision between floor workers and

top management. Guru insured good communication within the teams and between the levels

• Implementing the Intranet and personal Emails

Integrating the Communication Structure

Recommendation

Treelin’s Communication

Structure

New Integrated Communication

Structure

Toivonen’s Communication

Structure

Get management on board

Get employees on board

Implement the policies

Begin Training for new machinery

Implement succession management

Implementation ProcessRisks and Contingencies

• Measure efficiency of new machines– Profits made

• Productivity rates– Training and development programs

• Retention and Turnover Rates– Modified HR policies– Employee satisfaction regarding changes

Issue #4: Assessing the New Changes within Treelin

Questions?

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