Controlling Your Business
Assignment – Critical Evaluation of Burberry LTD
Focussed on Human Resources, Information Management and Knowledge Management.
BSc. Business Communications
Tutors: Mike Swain and Gwenda Mynott
Human Resource Management3
Considering the impact of Burberrys closure of its Wales plant at Treorchy, Rhondda, and plans to relocate to China this report considers the impact to Human Resources, Information Management and Knowledge Management. Extensive research into the closure from media coverage at the time paints an unfavourable picture of Burberry and their decision and attitudes towards the closure and the unavoidable effects on the 300 workers whose employment was to be terminated. Through discussion of the Human Resource function this report evaluates what processes will be completed during the relocation and how information can successfully be managed. Furthermore considering how using knowledge management strategies facilitated Burberry in transferring knowledge from Rhondda, Wales to China. Burberry Limited
Burberry Limited founded in 1856 by Thomas Burberry is a designer clothing retailer, opening his first store in Basingstoke, Hampshire, England. The iconic Burberry check was created in the 1920s and used as a lining in its world famous trench coats. Burberry was an independent company until 1955, when it was taken over by Great Universal Stores (GUS). Burberry Group plc was initially floated on the London Stock Exchange in July 2002. GUS divested its remaining interest in Burberry in December 2005. Burberry is well-known for using British celebrities in its advertising. In 2006 Rose Marie Bravo, who as Chief Executive had led Burberry to mass market success, retired. She was replaced by current CEO Angela Ahrendts. In March 2011 Burberry declared profits before taxation of over £196.4 mil (FAME, 2011). In September 2006 Angela Ahrendts announced the closure of its Wales plant at Treorchy, Rhondda, with the loss of 300 jobs with plans to relocate to China. The British media took hold of the story and with union bosses helped workers of the plant launch a full campaign to stop the closure. In attempts to make Ahrendts reconsider campaigners lobbied celebrities to join the cause. Gaining both media and political backing the union bosses along with campaigners managed to secure a trust fund for workers of £150,000 a year for ten years and improved redundancy packages. Human Resource Management
Campbell (1997, p. 175) argues people are one of the key inputs into organisations. The input provided by people to organisations constitutes one of the factors of production, along with capital, land and the physical inputs of stocks and equipment. He claims the human factor of production has uniqueness unlike other inputs, as it makes contribution to an organisation’s success through generating ideas. Torrington, Hall and Taylor (2005, p.7) identify four objectives which form the foundation of HR staffing, performance, change-management and administration. The third, change-management addresses the role played by the HR function in effectively managing change. Whether structural change within an organisation, requiring reorganisation of activities, and the introduction of new people to the organisation, or, cultural change in order to alter attitudes or long- present organisational roles. Key activities include recruitment and training, furthermore the construction of reward systems which underpin the change process. HR within Burberry face a challenging time in the closure of the Rhondda factory and the opening of a new plant in China. Redundancy packages for the 300 workers who lost their jobs from Rhondda when the factory closed must be put together, 90 days notice given to all staff concerned....