Case Study: Hunter Douglas Group
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This is a case study report to analyse how Hunter Douglas Group manages its human resource planning and how the activities involved in the human resource planning process contributes to the success, as well as to ensure future success, of this large multi-national organisation in line with its corporate vision, mission, core values, strategic planning and objectives.
Human resource planning provides the means to accomplish the desired outcomes of the organisation and achieving objectives by ensuring that the organisation has the right number of quality people available to achieve objectives through strategy implementation. This is based on a close working relationship between the human resource practitioners and line managers in each company (business unit) of its decentralised organisational structure. The human resource practitioners serve as consultants to line managers concerning the people management implications of business objectives and strategies. Line managers, in turn, have the responsibility to respond to the business implication of human resource objectives and strategies.
We also see that the environmental and contextual changes present a number of competitive challenges to this organization which requires its human resource management to be involved in helping to create and build new capabilities. The challenges include:
Globalisation: the challenge is to move people's ideas, products and information around the world to meet local needs.
Technology: the challenge is to make technology a viable, productive part of the work setting
Competition: in order to remain competitive and remain as a market leader, Hunter Douglas is aware of the importance of continuous training of its people.
Economics: economic growth or lower interest rates cause the increase in spending and often increase in business opportunities. Changes in the labour market has an impact on the organisation's ability to find and keep employees
Workforce changes and ability to cope with change: these include resignations, terminations, leave of absences, death, change in employment status and retirement
The success of a business is directly linked to the performance of those who work for that business and Hunter Douglas Group is fully aware of this as it believes in the power of learning and providing its employees growth opportunities to develop their skills. Hunter Douglas Group acknowledges that its employees' commitment is the key ingredient to the Group's continued growth and success.
Hunter Douglas Group prides on the diversity and strength of its corporate culture that empowers its employees to build and run the business like their own businesses. The Hunter Douglas Group acts like a federation of entrepreneurial companies who think globally but act locally. The character and creativity of its 21,000 employees in 169 countries worldwide have built the dynamic and entrepreneurial company that the Group is today. With numerous benefits encouraging wellness and a work-life balance, Hunter Douglas Group regards its employees as its most valuable resource which is the key to the Group's success.
Corporate Mission and Core Values
Hunter Douglas is the world's market leader in manufacturing a wide range of innovative and quality architectural and window covering products. Hunter Douglas provides on-time delivery, reliable and friendly service at a competitive price. Its aim is to offer fulfillment to its staff and to secure a reasonable return to its shareholders.
Putting customers first
Providing reliable and friendly service.
Achieving on-time delivery
Seeking continuous improvement and new ideas to create value to our customers
Striving for creative ways of doing our work better
Working together harmoniously to achieve common goals and objectives
Honouring commitments to customers, staff and organisation
Being sincere and truthful
Showing respect and understanding for each other
Being frank, open and receptive
Providing continuous training and development
Recognising good performance
Board of Directors
Hunter Douglas Group has a one-tier corporate structure. Under its Charter, the Board of Directors is responsible for the overall management and control of the Company. The Board is appointed by the shareholders at the annual General Meeting. The Board has four regular meetings per year and additional meetings as required. Board members may not be members of more than five boards of public companies.
The Board has six Members, of whom four are independent. It acts collectively by majority resolution.
The Board reviews the overall strategy, financial objectives, budgets, acquisitions, divestments, capital expenditures, currency and aluminium hedging, portfolio composition and returns, results and risks in the Company's business.
Audit and Compensation Committees
The Board has an Audit and a Compensation Committee, whose members are independent. The Audit Committee reviews the Company's accounts, internal controls and meets with the Company's external Auditors twice a year. The Compensation Committee reviews the Directors' and Officers' compensation and stock options.
Chairman, President & CEO
Mr. Ralph Sonnenberg is Chairman of the Board of Directors, President and Chief Executive Officer.
The Board annually appoints the Officers of the Company: the President, the Co-Presidents, four regionally responsible Vice Presidents, two Staff Vice Presidents and a Corporate Secretary. The Vice Presidents and Corporate Secretary report to the President.
In accordance with the applicable reporting principles, the consolidated financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group. The annual report includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal opportunities and risks associated with the expected development of the Group.
Major Business Processes
A business process is a collection of structured, related tasks or activities which produce a specific product or service which serves a particular goal for customers. The main types of business processes observed in this case study report are Management Processes, Operational Processes and Supporting Processes.
Management processes: processes which govern the operation of a system in an organisation. Typical management processes include 'Corporate Governance' and 'Strategic Management'.
The Hunter Douglas Group is incorporated in The Netherlands Antilles and has its statutory seat in Curaçao. Hunter Douglas is therefore not subject to The Netherlands Corporate Governance Code. However, Hunter Douglas adheres to good Corporate Governance.
The Group has the following key internal controls:
Conflicts of Interest Policy
The 'Conflicts of Interest Policy' is applicable to all key employees covering relations with customers, suppliers and other third parties.
Insider Trading Policy
The 'Insider Trading Policy', as prescribed by the Authority Financial Markets ('AFM'), restricts trading in the Company's shares by Directors, Officers, key employees and related persons.
Internal Audit Function
Hunter Douglas' principal Operating Companies have an Internal Audit Program.
Every Manager, including the Regional Vice Presidents, has clearly defined Authority Limits.
Hunter Douglas has a 'Whistleblower' Policy in each and every Company within the Group.
Compensation is reviewed by the Compensation Committee of the Board. The Company also follows the 'best practices':
Stock options are granted for five years with vesting starting after two years.
It is not the Company's Policy to provide stock at no cost.
Loans to Directors, Officers or other employees bear market interest. There is no forgiveness of principal or interest.
Hunter Douglas has an Investor Relations Website, regularly issues press releases and holds analysts and investor meetings.
Strategic management is a process through which organizations analyse and learn from their internal and external environments, establish strategic direction, create strategies which are intended to move the organisation in that direction and implement those strategies, all in an effort to satisfy stakeholders, as illustrated in the diagram below:
Strategy Implementation and Evaluation
Hunter Douglas Group has been successful over the long term because the Group has effectively acquired, develop and manage resources and capabilities that provide competitive advantage. The Group has, over the years, achieved strong brand recognition such as the HunterDouglas® in North America and Asia as well as for Architectural Products worldwide. Luxaflex® for residential window coverings in the rest of the world.
The Hunter Douglas Group, with its 21,000 employees in 169 countries worldwide, takes advantage of its organisational strengths and environmental opportunities. It continues to neutralise or overcome organisational weaknesses and environmental threats by managing its business processes well and applies 'best practices'.
Operational processes: processes which constitute the organisation's core business and create the primary value stream. Typical operational processes include Purchasing, Manufacturing, Marketing, and Sales.
As a highly decentralised organisation, each company in each region within the Hunter Douglas Group manages autonomous operations with minimum interference and maximum accountability, growing their businesses within the group's entrepreneurial environment following the corporate governance, vision, mission and values.
Supporting processes: processes that support the organisation's core processes. Examples in this category include Accounting, Recruitment, Technical support.
Although highly decentralised, each company in each region within the Hunter Douglas Group has to follow an Internal Audit Program when it comes to financial and accounting matters.
Recruitment and Human Resource matters are set in line with the business plan and strategies of each company in each region as well as in line with the directions and corporate governance, vision, mission and values of the Group.
Porter's Generic Strategies
Hunter Douglas Group's strategy is to grow the market and the Group's market share by continuing to introduce innovative and proprietary new products and by expanding its presence in key geographic markets.
It was observed that Hunter Douglas Group has been successful in using the Differentiation Strategy by having the following internal strengths:
Access to leading research and development
Highly skilled and creative product development team
Strong sales teams with the ability to successfully communicate the perceived strengths and benefits of the product.
Corporate reputation for quality and innovation
A differentiation strategy calls for the development of a product or service that offers unique attributes that are valued by customers and that customers perceive to be better than or different from the products of the competition. The value added by the uniqueness of the product may allow the firm to charge a premium price for it. The firm hopes that the higher price will more than cover the extra costs incurred in offering the unique product. Because of the product's unique attributes, if suppliers increase their prices the firm may be able to pass along the costs to its customers who cannot find substitute products easily.
The risks associated with a differentiation strategy include imitation by competitors and changes in customers' tastes.
Generic Strategies and Industry Forces
Ability to cut price in
Customer loyalty can
Focusing develops core
competencies that can act
as an entry barrier
Ability to offer lower
Large buyers have less
Large buyers have less power
price to powerful
power to negotiate
to negotiate because of few
because of few close
Better insulated from
Better able to pass on
Suppliers have power
supplier price increases
because of low volumes,
but a differentiation-focused
firm is better able to pass on
supplier price increases to
Can use low price to
Specialised products & core
attached to differentiating
threats of substitutes
Better able to
Brand loyalty to keep
Rivals cannot meet
compete on price
customers from rivals
Relationship With External Entities
In order to remain successful and continue to expand its market share, Hunter Douglas Group has learned to develop and manage relationships with wide range of organisations, groups and people that have a stake in their business. The emergence of a fiercely competitive global economy means that the companies within the Hunter Douglas Group have to expand their networks of relationships in their region and cooperate with each other to remain competitive.
Hunter Douglas Singapore team up with the National University of Singapore's Department of Architecture to organise the NUS-Hunter Douglas Award for the innovative use of technology in Architecture.
Hunter Douglas Group has developed multi-level training and education programs for its fabricators, retail dealers, professional designers and installers.
It holds consumer seminars to help prospective buyers understand the importance of window coverings for home fashions and for light control and energy efficiency.
It provides training seminars and hands-on workshops for retailers, designers and installers, which includes CD-Roms, videotapes and web-based instructions, throughout the world.
It has created the industry's first and only formal Retail Alliance Program, offering its very best dealers a choice of tiered partnership options that reward their brand loyalty with lucrative business-building benefits, including financial incentives and exclusive products and programs.
Through Hunter Douglas Group exclusive partnership with Archiprix International, it builds relationships with the next generation of architects as they begin their careers after college. With Hunter Douglas Group's support, Archiprix organises a biennial international competition for the best graduation projects in architecture. Finalists travel to a host city with hundreds of architects from around the world where an independent jury evaluates the student entries and recognizes the most outstanding work with the Hunter Douglas award.
Hunter Douglas Singapore was conferred the Singapore Institute of Architects' Friend of Architecture Award in recognition of the company's contribution to Architecture in Singapore and its continuous support for the Singapore Institute of Architects.
Its 'Windows of Opportunity' seminar on the use of window fashions in interior design reaches more than 2,500 design school students and designers in major United States' markets each year.
At the Fashions Institute of Technology in New York and other leading design schools, Hunter Douglas provides design students with industry overviews and a business perspective through teaching opportunities.
At the renowned Pratt School of Architecture, Hunter Douglas has sponsored design studio projects that challenge students to envision new and novel ways to integrate its products and materials into architectural structures.
Hunter Douglas Group actively supports the communities in which they live, work and do business. Decisions about which causes to support and the form that support takes are made locally by the management in each country.
It provides window coverings to hospitals, research centres and healthcare facilities around the world.
It supports educational opportunities for the families of its staff and less privileged members of our communities.
In the United States and Canada, Hunter Douglas sponsors Habitat for Humanity, donating custom window coverings for the homes Hunter Douglas has built for low-income families since 1993. Hunter Douglas' employees have also contributed thousands of hours in sweat equity assisting with the building of these homes at the local level.
Hunter Douglas stimulates students' awareness of its products and encourage their creativity through competitions in which they are judged upon the innovative application of its products in their design projects.
Hunter Greenâ„¢ and Keen on Green are important new company-wide environmental initiatives being undertaken by the Hunter Douglas branded companies to reduce energy consumption, water usage and its overall carbon-footprint. It also includes an ongoing consumer marketing effort creating increased awareness of Hunter Douglas corporate commitment to the cause as well as the superior energy-saving benefits of its products.
The Process of Human Resource Planning in the Organisation
Manpower planning is a process of getting the right number of qualified people into the right job at the right time. It is a system of matching the supply of people internally, who are the existing employees, and externally, potential talents to be hired or searched for, with job openings which the Group expects to have over a given time frame.
This planning requires the human resource departments in the Group to prepare an inventory of skills and talents already available as well as coordinating and controlling various activities in the Hunter Douglas Group. Manpower planning involves reviewing current manpower resources, forecasting future requirements and availability as well as taking steps to ensure that the supply of people and skills meets demand. It utilises the concept of planning to visualise how the Hunter Douglas Group can go through the allocation and control of its manpower resources in a better manner. It is also a tool for higher management to equip themselves with the necessary data on its human resources available immediately within the Group and from outside, when the need arises to meet market's demand.
Manpower Planning Model
Product/ Service demand
Balance Supply and Demand
Financial resources/ limitations
Education of workforce
Leave without pay
Nature of company
Net human resource
Manpower planning, as observed in the Hunter Douglas Group, consists of the following steps:
Identify the Group's objectives and strategies which are stipulated in the business plan and from the strategic planning processes of the companies within the Group.
Determine the impact of the organisation's objectives on specific organisational units. For this purpose the cascade approach can be used, whereby the organisation's long term strategies are translated into the shorter term performance objectives and time schedules per division and department.
Define the skills, expertise and total number of employees (demand for human resources) required to achieve the organisation and department objectives by using the different statistical methods and managerial estimates.
Perform an analysis of the Group's current human resources. By doing a skills inventory will shed light on the number of current employees in terms of their different competencies, skills, training levels, qualifications, work experience, etc.
Determine the additional (net) human resource requirements in light of the Group's current human resources.
Develop action plans to meet the anticipated human resource needs which may include a comprehensive succession plan for each department, resultant recruitment strategies, the design and implementation of managerial development and other training programs, making available bursary schemes for current participants who may eventually fill scarce positions, designing compensation packages to attract and retain quality staff.
The key activities of Human Resource Management carried out by both line managers and the Human Resource practitioners in the Hunter Douglas Group are:
Organisation structuring: developing an organisation which caters for all the activities required, groups them together in a way which encourages integration and cooperation.
Job design and role specification: deciding on the contents of the jobs which involve the employees' duties and responsibilities and the relationships that exist between job holders and other employees within the Hunter Douglas Group.
Organisational development: stimulating, planning and implementing programmes designed to improve the effectiveness with which the organisation functions and adapts to change.
The employment relationship
Improving the quality of the employment relationship
Creating a climate of trust and self propulsion
Developing a more positive psychological contract
Achieving a highly committed organisation
Human resource planning: assessing future people requirements in terms of both numbers and all levels of skill and competence. Formulating and implementing plans to meet those
requirements through recruitment, training, development, etc.
Recruitment and selection: obtaining the number and type of people the organisation needs
Getting better results from the companies, teams and individuals by measuring and managing performance within agreed frameworks of objectives and competence requirements; assessing and improving performance.
Human resource development
Organisational and individual learning
Skill improvement through systematic approach to training
Job evaluation: assessing the relative size of jobs as a basis of determining internal relativities
Pay: developing and administering pay structures and systems
Non-financial rewards: providing employees with non-financial rewards e.g. recognition, increased responsibility and opportunity to achieve and grow.
Employee benefits: providing benefits in addition to pay which cater for personnel security and personal needs
Employee relations involving managing and maintaining formal and informal relationships with trade unions and their members
Employee involvement and participation which means sharing information with employee and consulting them on matters of mutual interest
Communication: creating and transmitting information of interest to employees.
Health, safety and employee services
Health and safety: developing and administering health and safety programme
Employee services: providing welfare services and helping with personal problems.
The Hunter Douglas Group's objectives are to:
Expand its Window Coverings and Architectural Products businesses at a growth rate exceeding that of the market while continuing to be the best company in the industry;
Develop and introduce innovative new products;
Seek acquisitions that add to the Company's organic growth by expanding product lines or distribution and that meet its return targets;
Continue with an efficient decentralised entrepreneurial organisation based on the principle of 'maximum accountability with minimum interference'.
The objective of manpower planning is to maintain and improve the organisation's ability to achieve its goal by developing strategies that will contribute its optimum contribution of human resources. Manpower planning is the responsibility of both line and staff manager. The line management is responsible to give estimate of manpower requirements and staff manager is responsible to take actions on selection and recruitment in association with line manager who needs the manpower.
Manpower planning in Hunter Douglas Group serves the following inter-related purposes or objectives:
It prepares the organisation for the future in terms of planning its manpower requirement and utilising them properly in order to meet the impact of rapid technical and economic changes and maintain its competitive position. It gives a picture of manpower available within the organisation to undertake any future expansion or set up a new branch or a new plant or develop a new line of production.
It allows for forward planning to fill anticipated skill requirements as well as allows for needed flexibility in day-to-day utilisation of manpower. It allows for adapting to abrupt changes in such factory as technological advances, new markets, political and economic pressures and heightened competition. In other words, manpower planning provides the background information which is necessary to deal with such forces.
Another important objective is one of matching or fitting employee abilities to the business requirements with an emphasis on future instead of present arrangements. The ultimate mission is to relate future human resources to future business' needs so as to maximize the future return on investment in human resources.
Comprehensive manpower objectives play a vital role in the achievement of the organisation's overall strategic objectives and visibly illustrates that the human resources department fully understands and supports the direction in which the organisation is moving. It will also support other specific strategic objectives undertaken by the marketing, financial, operational and technology departments.
The manpower objectives aim to capture "the people element" of what the organisation is hoping to achieve in the medium to long term, ensuring the following:
it has the right people in place
it has the right mix of skills
employees display the right attitudes and behaviours
employees are developed in the right way.
The manpower objectives also put into consideration the followings:
workforce planning issues
workforce skills plans
employment equity plans
black economic empowerment initiatives
motivation and fair treatment issues
pay levels designed to recruit, retain and motivate people
the coordination of approaches to pay and grading across the organisation to create alignment and potential unequal pay claims
a grading and remuneration system which is seen as fair and giving proper reward for contributions made
wider employment issues which impact on staff recruitment, retention, motivation etc.
a consistent performance management framework which is designed to meet the needs of all sectors of the organisation including its people
career development frameworks which look at development within the organisation at equipping employees with "employability" so that they can cope with increasingly frequent changes in employer and employment patterns
policies and frameworks to ensure that people development issues are addressed systematically, such as competence frameworks, self-managed learning etc.
The manpower objectives show that careful planning of the people issues will make it substantially easier for the organisation to achieve its wider strategic and operational goals.
In addition, manpower objectives add value by ensuring that, in all its other plans, the organisation takes account of and plans for changes in the wider environment which are likely to have a major impact on the organisation such as:
changes in the overall employment market - demographic or remuneration levels
cultural changes which will impact on future employment patterns
changes in the employee relations climate
changes in the legal framework surrounding employment
HR and employment practice being developed in other companies, such as new flexible work practices.
Analysis of the Present Utilisation of Manpower
The penalties for not being correctly staffed are costly.
Understaffing loses the business economies of scale and specialization, orders, customers and profits.
Overstaffing is wasteful and expensive, if sustained, and it is costly to eliminate because of modern legislation in respect of redundancy payments, consultation, minimum periods of notice, etc. Very importantly, overstaffing reduces the competitive efficiency of the business.
Planning manpower levels requires that an assessment of present and future needs of the organisation be compared with present resources and future prediction of resources. Appropriate steps then be planned to bring demand and supply into balance.
An internal supply analysis is done with the following methods or analysis:
Staffing tables/manning charts: which are pictorial representations of all organisational jobs along with the numbers of employees currently occupying those jobs and future employment requirements
Markov analysis: shows the percentage (and actual number) of employees who remain in each job from one year to the next, thus keeping track of the pattern of employee movements through various jobs. This analysis results in a composite matrix of supply.
Skill inventories: list each employee's education, past work experiences, etc.
Replacement chart: helps the management derive the profile of job holders, department-wise and reveals those who could be used as replacements whenever the need arises.
Analysis of the External Environment
The Hunter Douglas Group's performance and results are sensitive to external factors of which the following are most influential:
Overall economic activity and particularly consumer confidence which affects demand for consumer durables
Prices for raw materials in particular, which include aluminium, steel, fabric, synthetics and other oil based products
Exchange rates: The majority of the Company's sales and profits are realised outside the Euro zone. Euro rates against the dollar and other currencies can therefore affect the Company's results. Hunter Douglas' policy is to generally hedge transactional exposures, to selectively hedge translation of earnings and generally not to hedge balance sheet exposures.
Potential Supply of Labour
Future manpower planning is directly linked to the strategic business plans of an organisation. The estimation on manpower and budgets are governed by customers' demands. Business needs are achieved from effective management of materials, machines, money and manpower. Manpower needs, if planned properly, in terms of profile required, numbers, time and place, will give the company mileage over competitors in terms of consistency in output. Effective human resources planning give optimal productivity in terms of timelines and quality of deliverables. It will not only improve people competency but will also ensure that people grow with the company. An organisation set on the growth path needs competent people to achieve its objectives.
Causes of demand for Human Resources in the Future
Sales and production forecasts
Organisational and job designs
Leaves of absence
What future demands will be is influenced by the forecast of the human resource or personnel manager whose main task is to scrutinize and modify the predictions of other managers. Future manpower needs derive from:
Sales and production forecasts
The effects of technological change on task needs
Variations in the efficiency, productivity, flexibility of labor as a result of training, work study, organizational change, new motivations, etc.
Changes in employment practices (examples include the use of subcontractors or agency staffs, hiving-off tasks, buying in, substitution, etc.)
Variations, which respond to new legislation, e.g. payroll taxes or their abolition, new health and safety requirements
Changes in Government policies (investment incentives, regional or trade grants, etc.)
The management must estimate the structure of the organisation at a given point of time. The number and type of employees needed have to be determined. Many environmental factors affect this determination. They include business forecasts, expansion, growth, design, structural changes, management philosophy, government policy, product and human mix and competition
Forecasting is necessary for the following reasons:
The eventualities and contingencies of general economic business cycles (such as inflation, wages, prices, costs and raw material supplies) have an influence on the short range and long run plans of all organizations.
An expansion following enlargement and growth in business involves the use of additional machineries and personnel and a reallocation of facilities, all of which call for advance planning of human resources.
Changes in management, philosophies and leadership styles.
The use of mechanical technology makes it necessary for changes in the skills of workers as well as a change in the number of employees needed.
After estimating what future organization structure should be, the next step is to draw up the requirements of manpower, both for existing and new vacancies. For this requirement, details should be obtained from various departments. Vacancies occurring in any department should be notified in writing to the personnel department, stating clearly the number of vacancies to be filled category or job wise, their qualification and experience and the reasons for acquisition. A statement of duties, type of jobs, pay scale and previous experience should also be made.
In determining the requirements of manpower, the expected losses which are likely to occur through labor turnover, such as quits, retirement, death, transfers, promotions, demotions, dismissals. Disability, resignations, lay-offs, and other separations should be taken into account. Additional resources are gained through new employment of personnel, promotions, transfers etc.
After making all adjustments, the real shortages and surplus may be found. If there is a shortage, efforts are made to fill up the vacancies. If there is surplus, then deal with it by transfers, retrenchments etc.
To be effective, manpower planning requires careful assessment of the future needs of the Hunter Douglas Group. It involves the development of strategies to match the requirement of employees and availability of positions at a regional as well as a national level. Those in charge of manpower planning within the Group need to have a foresight about the business plans. They need to plan the activities for achieving business growth, estimate the business needs of the organisation and plan for the resources needed to realise the business goals. Manpower planning is referred to as the process of reviewing current resources, predicting future requirements and ensuring that the demand and supply of people and skills is balanced. Manpower planning is useful for both the employees as well as the organisation.
The manpower planning process demands the human resource manager to first understand the business requirement. Only when the human resource manager comprehends the nature and scope of the business, will he or she be able to employ those who will deliver the required performance. When it comes to engaging the manpower, the manager should have a keen eye for spotting the talent. It ensures that the workforce is competent enough the meet the targets.
Additionally, the existing 'talent pool' in the workplace should be taken into consideration, so that people with the supporting and right skills can be employed. The functions of the human resource manager varied as he or she has to assess the currently employed workforce and their shortcomings. Identifying these shortcomings goes a long way in choosing an efficient workforce.
While recruiting the new employees, the human resource manager must calculate the expected workload. In this way, the human resource department can design an accurate job profile and job expectations. Once decided on the job descriptions, looking for candidates who fit the job will be easy. A good human resource manager is one who has the zeal and passion to motivate his or her prospective employees to perform to their potential.
Manpower planning process, thus, can be considered as one of the strategic steps for building the strong foundation of an efficient workforce in the hunter Douglas Group or in any organisation.
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