S118 HRM201 HUMAN RESOURCE MANAGEMENT
S118 HRM201 HUMAN RESOURCE MANAGEMENT https:
1 of 2 14/06/2018, 1:38 pm
S118 HRM201 HUMAN RESOURCE MANAGEMENT https:
2 of 2 14/06/2018, 1:38 pm
Case Study 5.2
TK Ceramics: an Indonesian Opportunity
Tim Bortolli, Kate Johnson and Renee Nguyen were approaching exhaustion at their second
straight 12-hour day of meetings. Tim and Kate were joint owners of TK Ceramics, a small
usiness they started together after leaving university. TK Ceramics had grown to become
Victoria’s largest importer of European ceramic tiles, now operating from a 4500-sqm warehouse
in Port Melbourne, with 70 staff. Renee holds the newly created title of General Manager of HR;
the title reflecting the impending growth of the company.
The long days of meetings were due to the immense amount of planning required to put in place
the next phase of the company’s growth. TK Ceramics had enjoyed a lot of success in importing
tiles from Italy; the European styles, designs and colours translating well to the culturally diverse
Melbourne market. Rather than sell to the public, TK Ceramics sold wholesale to bathroom
stores all over Victoria, and collaborated with a few exclusive architects who worked with high-
end renovations. Twenty-two field sales representatives continuously worked their large retail
customer base, and a further 28 staff worked in the warehouse – unpacking, checking and
shelving incoming stock, as well as preparing shipments for the company’s delivery fleet four
times a day. Another 20 staff worked in the office, in roles such as customer service, finance,
accounts and administration.
However, a year ago, Kate had been on a sa
atical in Jakarta Raya, Indonesia, taking a
disengage from work, asked to meet the owner. TK Ceramics: an Indonesian opportunity
motorcycle tour with her partner. While taking a ‘back-roads’ tour one day, she had come across
a small tile factory that produced plain ‘standard’ tiles, and, not being able to fully disengage
from work, asked to meet the owner.
Kate spoke with the owner, Alatas, all afternoon, toured his facilities and made a promise to be in
touch as soon as she returned home. She was very excited about the opportunity to develop a
new supplier. While sales of European tiles were still strong, they were expensive, and they had to
y a lot of stock to cater to the wide variety of tastes in Melbourne.
Alatas’ factory represented a chance to supply tiles to the mass market – new home building
companies, commercial installers, hospitals, shopping centres and so on, where design was less
important than price and functionality.
Tim and Kate decided to go for it, and met with their bank and business advisers to plan the
expansion, and hired Renee to develop and execute the HRM strategies. They decided to
launch the new business stream through a new, wholly owned retail network, a radical
departure from their existing business model. In addition, they were going to create a new
and for their shops. They had decided to maintain their cu
ent business and its
elationships under the identity of TK Ceramics. They had, however, adopted the strategy of
their existing one.
Renee was now immersed in the HRP to execute this strategy. She needed to design a
structure which clearly separated both supplier and customer-facing staff into the separate
streams, but could also make use of the existing warehouse infrastructure for both.
Further, she had a mission-critical task to complete before anything else.
All ceramic tiles sold in Australia must meet strict Australian Standards – ISO 13006: 1998
10545 Test Methods.
Preliminary investigations of the product produced by Alatas’ factory showed that while the
tiles were generally good, there was too much variation in size, surface finish and strength to
consistently meet the standards. Testing each batch in Australia and rejecting non-compliant
tiles was too expensive and wasteful. The quality control had to take place in Jakarta Raya.
Alatas was very happy to do this, as the new deal with Tim and Kate would result in a near-
doubling of his output.
However, Tim, Kate and Renee had concerns that the expert human capital required to
design, implement and monitor the quality procedures in Alatas’ factory weren’t available in
Indonesia. They had just decided to recruit and send an Australian expert to Indonesia to
embed into the factory for a year, to ensure that there were no problems with standards
compliance and wastage at the Australian end.
Tim hadn’t needed to do this before. Most of the Italian tiles they imported were already
tested and compliant with the strict EU standards, and Tim’s Italian heritage and language
skills made communicating their needs to suppliers in Italy with phone calls and an
occasional visit very effective.
Renee’s list of jobs was growing rapidly. Not only did she have to prepare to staff the seven
presence’ strategy. She also needed to find just the right person to send to Jakarta Raya.
Source: Prepared by Stephen Turner, Murdoch University, Perth.
1) What is the best process to redesign the internally facing and customer-facing jobs?
2) What are the advantages and disadvantages for drawing at least some of the shop
workers from existing staff?
3) How would you create job descriptions and person descriptions for jobs in the shops
that do not yet exist?
4) Do the field sales representatives have similar key skills and abilities requirements to
those that may be needed for the shop staff? Discuss.
In Chapters 1, 2 and 3 we discussed the theory of SHRM and some of its contextual
influences. We also explored the fundamental relationships between
strategies and associated HR strategies, and their subsequent impacts on all human resource
management (HRM) functions.
idge between HR strategies and HR functions is the formulation of human
esource plans that incorporate the desired outcomes of HR strategies, are responsive to
continual changes in dynamic national and global industry environments, and can be
implemented through efficient and effective HR functions (e.g. job design, recruitment and
selection, human resource development, performance management, rewards and industrial
The purpose of human resource planning (HRP) is to try to ensure that organisational
objectives are met through the effective utilisation of the human resources of the
organisation, taking into account changing circumstances within and outside particula
organisations (see Figure 4.1). Therefore, HRP is essentially an ongoing process, focused on
the long-term, but cognisant of contemporary changes in both the internal and external
environments in which these organisations operate. In reality, HRP must be a series of
processes, with long-, medium- and short-term contingency options, in order to
comprehensively reflect HR strategies and to modify associated HR processes.
Figure 4.1 Strategic alignment
Labour supply analysis
Chapter 4: Human resource planning in a changing environment 133
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Such plans are based inevitably upon efficient, effective and user-friendly human resource
information management systems (HRIMS), which collect, collate and analyse internal and
external HR data. These are discussed later in this chapter.
Human resource planning
Human resource planning (HRP) – sometimes called ‘workforce planning’ – has been
explained in a variety of ways.
• [HRP] is taking the steps today to ensure that (organisations) have the right people in the
ight place, with the right skills, at the right time and at the right price.1
• Estimating the future supply of and demand for human capital and then figuring out how
to close gaps. Such planning allows companies to think through their workforce
alternatives to the high fixed costs of full-time employees.2
• [HRP] consists of translating organisational plans at various levels into HR plans that guide
the long-term acquisition, use and development of intellectual capital and knowledge assets.3
All the above explanations contain similar features – a strategic, long-term approach; a
comprehensive staffing plan, covering all HR activities from recruitment through to learning
and development, career management, and to the eventual separation of employees by
etirement and retrenchment; and a close relationship with organisational strategies and
objectives. The second quotation from the Boston Consulting Group (BCG) and the World
Federation of People Management Associations hints at a key component of contemporary
HRP, namely the need to factor into such planning the volatile local and global labou
markets which demand more flexible and innovative employment conditions, including part-
time and casual forms. Its overall purpose is to ensure the effective management of human
esources by providing the required quantity and quality of employees where and when
Therefore, HRP needs to encompass a systematic process of analysing organisational
strategies and goals; conducting both external and internal environmental analyses
(environmental scanning); and, subsequently, making a strategic choice about the nature of
HRM processes appropriate to identified organisational outcomes. As one research report
suggests, HR professionals need to ‘add real strategic value to the bottom-line, closely
manage the employee–employer relationship and deal with a diminishing workforce’.4 In
support of the latter, a recent Australian Institute of Management (AIM) report, among
others, suggests that ‘the pool of local labour appears to be drying up’, due both to the ageing
of the population and the need for more specialist skills within new industry sectors.5 The
changing characteristics of the Australian and regional labour markets and their dynamic
industrial relations systems, discussed in Chapters 2 and 3, will necessitate more focused HR
plans and more sophisticated HR modelling competencies.
134 PART 1: HRM in context
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