HemantM erchant, Florida Atlantic University
MasudC hand, Simon Fraser University
How should DHL Bangladesh proceed with a decision on a human resource information system, given the preferences of regional headquarters, the interests of sister subsidiaries, and the reservations of the Bangladesh subsidiary?
Late in October 2001, Nurul Rahman, Special Assistant to Vice President–Human Resources at DHL Bangladesh (DHLB), contemplated his options regarding the adoption of a human resource information system (HRIS) that the firm’s regional headquarters (HQ) in Singapore had proposed. The HRIS would computerize various human resource management (HRM) routines and provide much needed infrastructure to DHLB’s HR department which had difficulty coping with the organization’s rapid growth. Yet, the proposed HRIS was an expensive initiative that DHLB seemed reluctant to adopt not only due to its uncertain payoffs but also because its implementation would solely be DHLB’s responsibility. The charge of making an initial recommendation fell on Nurul who knew his counsel would be heeded by his boss, Mr. Jahar Saha, VP-HR and a DHLB veteran. Mr. Saha would almost certainly endorse Nurul’s recommendation to the Board. Nurul was also aware of the likely political fallout of a “wrong” choice. In reaching a decision, Nurul had to balance the claims of various stakeholders, particularly DHLB and its regional HQ (in Singapore) that had often expressed a strong preference for streamlining HR systems across its Asian subsidiaries. Was the HRIS recommended by Singapore appropriate for DHLB? If so, where could DHLB find resources for the initiative’s adoption? If not, what modifications would be needed to augment HRIS’ suitability for DHLB? Nurul had less than a week to make a recommendation.
A subsidiary of the privately held DHL Worldwide Express, DHLB was a pioneer and the acknowledged market leader in the “air express” industry in
Bangladesh. DHLB’s principal business consisted of delivering time-sensitive documents and parcels world- wide to and from Bangladesh. Created in 1979, DHLB had grown into a US$10 million business by 2002. During this period, DHLB’s employee base had increased from 5 to almost 300. Most of them were based in Dhaka, Bangladesh’s capital, where the bulk of DHLB’s clientele had their offices. The rapid economic growth in Bangladesh created opportunities as well as challenges for DHLB. On the one hand, it allowed DHLB to increase its revenues and profitability, and to achieve greater visibility within the DHL Worldwide network. On the other hand, this growth significantly increased the workload for DHLB employees, who were overworked and stressed. Although DHLB’s organizational structure enabled the firm to grow with Bangladesh’s anticipated expansion, the company’s various departments had not grown evenly. Nurul recalled:
In 2000, DHL Asia had implemented a region- wide cost management program. An important aspect of that program was to reduce back-line costs. Consequently, recruitment for back-line departments [such as HR] was frozen, and any new hiring for these departments had to be approved by the regional HQ. In fact, the cost-reduction initiative was so vital that DHL subsidiaries needed regional approval even if they wanted to fill vacancies created by retirements or turnover. There had been instances where such replacement hiring had not been approved by the regional HQ.
The lopsided growth in DHLB’s organizational structure created a bottleneck. Nowhere was this bottleneck more evident than in the HR department which had been operating with just three employees since 1994, when DHLB had 150 employees. This situation presented a major constraint because DHLB considered “people” to be its principal resource. This made it imperative that all DHLB employees were well trained and highly motivated. Thus—despite being widely...