May 15, 2011
Identify three key business issues facing Jan, Calletta’s CEO. As Calletta’s CEO, Jan is facing a number of problems such as: lack of support from board members/investors, increasing employee costs, and protests against Calletta’s offshore facilities due to the growing concern of working conditions. Jan key issue on hand is the lack of support from board members and investors. Board Members and investors right now are not supporting Jan or her proposal due to a poor return on investments. Board Members are concerned about the rapid increase of employee cost the company is incurring. Calletta is incurring a 12% cost increase annually compared to an industry average rate of just 4% in the U.S. It seems that until Jan is able to reduce employee cost along with increasing the company’s revenue and return on investments she will continue to lack the support needed for her future plans for Calleeta. Another key business issue Jan is facing at Calletta is the rapid increase in employee cost. Board Members are furious that Calletta is paying a well higher annual rate of 12% versus the industry average 4% that their competitors are paying. Board Members are demanding that Jan seek ways to decrease employee cost before approving any future plans. As a result Jan is forced to choose between HR Vice-President John Nosmas practices or the board who affects her maneuvering power for future plans. John Nosmas defends his practice of paying higher wages along with providing expensive benefit programs because he believe in hiring the best employees and believes that his practice also keep employees along with products innovated. This key business issue kind of puts Jan in a hard place because both parties play a vital role in her success as CEO. Finally, as CEO Jan is faced with the growing concerns over working conditions in their foreign facilities which are being targeted by activists on behalf of humane working conditions. This issue not only affects Calletta from a publicity stand point but from a production standpoint also. If this concern is not contained Calleta can be labeled as an inhumane place to work and may lose investors resulting in a loss of business and profit. Another concern this issue presents is eventually it could affect production due to the protesting by activists. If activists intervene in the daily operation of Calleta such as blocking supplies from coming in, it could affect production and in return revenue causing an uproar with investors in which Calleta don’t need. Therefore, it is critical that Jan resolves this issue before it before it becomes detrimental to the organization.
Discuss the ways that Calleta’s HR operations are contributing to the company’s success. Calleta’s HR department is the backbone of the company’s success. Due to HR Vice-President John Nosmas and Jan’s human capital talent acquisition and retention plan Calleta was able obtained the most highly skilled individuals in their industry giving the organization a competitive advantage. John and Jan’s plan focused on matching the company’s core competences to recruits that possess the skills within Calleta’s strategy. John and Jan believed that their strong recruiting and retaining plan would give the organization a competitive edge along with innovating the company’s products. Without a strong recruiting and retention plan a company will constantly incur a high turnover rate along with inconsistency with the quality of their products. “A company that implements an effective recruitment process is likely to gain competitive advantage in the marketplace, improve returns, and achieve economies of scale. This is possible only through the recruitment of quality candidates in to the organizational workforce (Sangeetha, K, 2010)”. Therefore, Calleta’s HR operations are key to the company’s success because it thrive to find the right people to fuel the company’s products.