Silvio case analysis free essay sample

Silvio Napoli, as head of Schindler Company’s corporate planning, is the best choice for the company’s India operations, given the facts of his adaptability of culture difference, his personality, background in Schindler, and his involvement of the Indian operation project, as well as his human resource management skills. First of all, Napoli is an Italian, who graduated from Harvard Business School. With solid education background, he became head of corporate planning in Schindler, which is a Swiss Company. His wife is a French-German dual national. Interacting with diversity of culture in life, he must be well equipped to adapt culture differences and handle the challenges. For instance, as he is employed as assistant of Chief Executive Officer of Schindler, he knows that Schindler is a formal Swiss company, so power distance is high that â€Å"the hierarchy was clear, politeness important, and first names rarely used. † (Silvio Napoli at Schindler India (A), page 3) He is well aware how people behave in the organizational context; he respects and embraces the culture, and he understands how he should behave as a manager. We will write a custom essay sample on Silvio case analysis or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page According to Thomas, D. C. , Lazarova, M. B. ’s article on Cultural and Institutional Context of Global Human Resource Management, they said, â€Å"HRM systems are embedded in the cultural and institutional context of their home country. HRM may be somewhat resistant to the forces of globalization because its ability to change is limited by regulatory structures, interest groups, public opinion and culture norms, which are relatively slow to change. †(Page 38) Because of this reason, manager that is in charge of opening Indian subsidiary must be aware of culture difference and be flexible in adapting it while handling human resource management. As a result, his ability of solving culture challenges is strong. Also, his personality is well fit with the role of foreign market operator. He is willing to carry the risk to take the job that â€Å"involved dragging [his] family to a developing country. †(Silvio Napoli at Schindler India, page 4) His courage for dealing challenges and ambition for success is necessary for managing foreign market entrance. Moreover, because his role in the company and the Indian entry project, he understands clearly about the objective for both the company and the project. As staff to the corporate executive committee, he is acquainted with the company’s mission, strategies, and challenges it encountered. With his in-depth knowledge and responsibility of the company, the corporate executive committee-the Verwaltungsrat Ausschuss trusts him. As India is an attractive market and partnership with local company BBL broke down, the company decided to operate a subsidiary company in India, which is legally available now. Appointing the right person to start up a wholly owned Indian subsidiary is the key role for the success of the operation, so the person must be trusted by the senior managers of the parent company. As the investigator and planner for the India project, he spent nine months in analyzing the Indian market. He not only consults experts of India to analyze the market size of elevator industry, rivalry of the industry, and legal environment in India, but also develops a detailed business plan for Schindler to enter the Indian market. As a result, he is acknowledged of the economics of Indian market and details of the expansion project. While starting his first job of Indian project, he recruited his management team. His demonstrated his resource management skills by selecting the right people that specialize in certain area, so the team, as a whole, is excelled in all dimensions. For example, he recruited Mehar Karen Singh, who is well understood of Indian culture and he has valuable customer and leadership experience, such as leading construction projects, as managing director. Also, Napoli recruited T. A. K Matthew as head field operation. Matthew has nine years elevator experience in Otis, which has the biggest market share-50% in Indian elevator industry and it is the most profitable industrial companies in India. Therefore, he is expertise and in-depth experience in elevator industry and he understands how the leader company behaves in elevator industry. Therefore, Napoli has excellent human resource management skills, especially in recruiting the right people for the right role. In sum, among all the candidates in Schindler, Silvio Napoli is the best choice as the director of operating Indian subsidiary, based on his openness and ability to adapt culture difference, his courage for challenges and achievement-driven personality, his management role in Schindler, as well as his high involvement in planning the business strategies for the entrance of Indian market. Putting myself into Silvio Napoli’s position, I would choose to be flexible when approach the nonstandard glass wall elevator. Specifically, the company should accept the order and customized the elevator with glass wall in order to suit the customer’s need. There are several reasons for this approach, which includes the company’s current situation and threats from the changing economic environment that the company operates in. First of all, Schindler is a new entrance company to Indian elevator industry. There is intense competition in the industry, with â€Å"four major players accounted for more than three-quarters of the Indian market value: Otis (50%), BBL (8. 6%), Finland’s Kone (8. 8%), and ECE (8. 4%). †(Silvio Napoli at Schindler India (A), page 8) In the low-rise segment, which consists of 23% market share, were controlled by 25 regional companies. Customers in this segment are extremely price sensitive. In order for Schindler to successfully enter the market and build up market share, it should take the order since the company has not received any order so far. When there is intense competition in the market, it is tough for new company to survive. Customers who choose new companies are looking for either attractive price or differentiate products or/and services. Since price is already low for model S001, so it is better for the company to differentiate the products and services. In addition, the four elevators that were ordered are used for government building in Mumbai, so if the customer is satisfied with the service and the product, positive word of mouth will be generated and subsequent orders will be coming in. Even though the order will cost more than what it cost for standardized the elevators, it make more sense take the order. The company should take the initiative negotiate the term, specific products with nonstandard glass wall, costs involving with customization, and the price regarding to customizing products. Beside the fact that Indian elevator industry has intense level of rivalry, customers in the industry has relative high power and they are very price sensitive in low-rise segment, which Schindler S001 is trying to tack in. As a result, gaining customers’ awareness and preference is important. Accepting the order for the government building not only help increasing brand exposure to general public, but also help creating the brand image as safe and quality. Secondly, the changing Indian economic market condition create many threats for the company, so Schindler should move fast and take the order which help break even the costs for setting up the company. According to Schindler India’s outsourcing strategy, there would be â€Å"no in-house manufacturing, no centralized assembly, and no logistics infrastructure. Instead, the production of most components for the dominant S001 model would be outsourced to approved local suppliers. †(Silvio Napoli at Schindler India (A), page 9) When the strategy is in place and Napoli estimated that the transfer prices on the basic S001 elevators are 30% higher than what he has calculated on the schedule. Also, the Indian government announced that import duties on â€Å"noncore† goods, including elevators, will increased from 22% to 56%. With changing economic condition, Schindler India must act fast to cover the cost it has encountered since it will be late if it changes the strategy now. Without generating any revenue, Schindler India would get into deep business challenges as there may be lack of funding and lack of reasons to request extra funding from its parent company. In short, Schindler India should accept the first order of four elevators because the business plan for its first year is to sell twenty elevators, so accepting the order will help break even the cost. Also, with intense level of rivalry in Indian elevator industry and price-sensitive customers in low-rise segment which Schindler model S001 positioned in, the company should receive the order because it will help creating brand exposure and brand image that will eventually contribute to the company’s bottom line. Lastly, the changing Indian economic environment post serious business challenges for Schindler India; as a result, it is better for the company to act fast and generate some income to keep the business running and to provide some supports for future funding from the parent company if needed. Now putting myself in the shoes of Luc Bonnard, I would appraise Silvio Napoli’s recruitment strategies of Human Resource practices and operation strategies as the general manager of the India operation; however, I would give some advice on his human resource management in the Indian operation and his strategy should be more focus on customers’ needs. First of all, Napoli did a very good job on recruiting his management team. As discussed in the first section, Napoli recruited Mehar Karan Singh as managing director. M. K. Singh brings the company valuable customer and leadership experience because he has led construction projects for some of India’s largest hotel. Napoli also recruited T. A. K. Matthew as head field operation because he has expertise and in-depth elevator knowledge and experience. Notable, Matthew has worked for Otis, the largest and most profitable elevator company in India, for nine years. Therefore, he can provides many industrial insights and recommendation for Schindler India. Napoli also hired Ronnie Dante, who has experience in Otis for 24 years, as general manager for engineering. With solid elevator engineering background and experience, Ronnie Dante helps managing the hard-core part of the business. Pankaj Sinha is giving a role of human resource manager. As he promised, he will take care all the employees. Finally, Jujudhan Jena, with â€Å"high ethical standards, integrity, assiduousness to work, and drive,† is recruited as chief financial offer. His characteristic is the common value that the company would like to achieve. (Silvio Napoli at Schindler India (A), page 6) As a result, Silvio Napoli recruited a talent pool as his management team. These people are specialized in some dimensions, and as a whole, the team has edge in multi-dimensions, which achieve competitive advantage. In addition of recruiting the right people in the company, Napoli also create a business strategy that differentiate the company from its competitors. The business plan is to sell standardized products, with model S001 for low-rise segment and model S300P for mid to high end segment, and some manufacturing activities will be outsourced to local suppliers. This approach can lower production and overhead costs because there are standardization in productions and limited manufacturing equipment. Even though doing something different creates lots of uncertainty and risks, strategy is able to help the company to achieve unique positioning and establish substantial market share. Since standardization lowers production costs, so the company can lower the price to penetrate the market, giving the fact that customers in low-rise segment are high price sensitive. However, communication and cooperation within the company is required for the success of the strategy. I would advice Napoli to work on this challenge. For instance, â€Å"several of Napoli’s new management team had questioned him on the feasibility of his plan. † They â€Å"wondered how the company would survive selling only standard elevators† and â€Å"outsourcing strategy, since no other company in the industry worked this way. †(Silvio Napoli at Schindler India (A), page 10) As not every employee has the vision as Napoli and there is culture difference regarding creating business strategy, therefore, clear communication is necessary. Employees must have the belief of success and cooperate together to make the plan successful. In addition to that, Napoli should behave more flexible in the changing environment. He should be more understandable when it comes to culture differences. For example, Indian employees are more inclined to work in a relaxed environment and they tend to accept things that they do not have control of. Napoli, on the other hand, wants to get things done as soon as possible. Employees in Schindler India describe him as â€Å"’driving very hard’, ‘impulsive’, ‘impatient,’ and at times ‘over-communicative. ’†(Silvio Napoli at Schindler India (A), page 6) To better manage a foreign subsidiary, Napoli should be more flexible in adapting culture differences and understand employees’ value and needs. If employees feel they constantly experience stress from work, they will be less motivated and productive. Human resource management can be a differential advantage for Schindler India only if the director understands the culture dynamics and consider his employees’ concern. Lastly, I would advice Napoli to think and act in â€Å"a monk side†. In India, political, economic, and natural environments are constantly changing; so Indian people tend to accept what unexpected things happen. Therefore, when transfer prices and import duties raise, Napoli should accept the facts and take actions immediately. When order of customized elevators comes, he should negotiate the term, such as increasing price according to customization and extra services, with the customer; since the revenue will contribute to bottom line and help the firm to break even. Overall, Napoli’s performance as general manager in Schindler India has both up and down sides.