OEC case study

Topics: Third Country National, Managing director, Corporate governance Pages: 10 (2415 words) Published: December 3, 2013
1.0 Study Case Summary

Office Equipment Company (OEC) manufactures a wide variety of office equipments such as copying machines, recording machines, mail scales and paper shredders in eight different countries and distributes and sells products worldwide. It has no manufacturing facilities in Peru but has been selling and servicing there since the early 1970s. OEC first tried selling in Peru through independent importers but quickly became convinced that in order to make sufficient sales it needed to have its own staff there.

Despite Peru's political turmoil, OEC'S operation enjoyed good and improving sales and profitability. OEC’s first factory in Peru was scheduled to begin early 1999. This plant will be supervised by a U.S technical team and a U.S expatriate will be assigned to direct the production. This director will report directly to OEC's U.S. headquarters on all production and quality-control matters but will report to the managing director in Peru on all other matters, such as accounting, finance, and labor relations.

In 1997, the managing director of OEC (who is U.S national) of the Office Equipment Company (OEC) in Lima, Peru announced suddenly that he would leave the company within one month. The company needs to find a replacement to fill the vacant position in short period. OEC, by policy, will replace the exiting managing director with an internal candidate. The company employs a combination of home-, host-, and third-country nationals in top positions in foreign countries, and managers commonly rotate among foreign and U.S. locations. OEC deems that international experience is crucial in top corporate position appointments. OEC does not have much time to fill in the position of the managing director. The sales and service facility in Peru reports to a Latin American regional office located in Coral Gables, Florida. A committee at this office, charged with selecting the new managing director, quickly narrowed its choice to five candidates.

2.0Problems, Symptoms and Problem Statement

1 2.1List of Problems
2.1.1Finding a replacement for The Managing director (a U.S national) of the Office Equipment Company (OEC) in Lima, Peru.

The first problem is looking and seeking for the right candidates for a replacement in Office Equipment Company (OEC). The symptom is The Managing Director of Office Equipment Company (OEC) is leaving the company. He announced suddenly that he would leave within one month. The company will have to find a replacement for him within that month to manage the OEC.

2.1.2 Peru’s political turmoil

The second problem is OEC need to choose the managing director that can lead the company like current managing director which had succeed to manage good operation and improve the sales and also profits. The symptom is despite Peru`s political turmoil, which at times has bordered on being a full-scale civil war.

2.1.3Report directly to OEC U.S. headquarters on all production and quality control matters

The third problem is the difficulties for the company to choose which candidates can handle the multi-tasking work as managing director position. The managing director is responsible for the whole operation matters but also need to manage all others such as accounting, finance and labor relations. The symptom is when the director must report directly to OEC U.S headquarters on all their production quality-control matters.

2.1.4 Company employing a combination country nationals

The fourth problem is the company might employs a combination of home country, host country and third country nationals in top positions in foreign countries, and managers commonly rotate among foreign and U.S. location. The symptom is OEC have variety citizen worker and also a combination country national in Peru. OEC needs to decide whether their want to recruit from home country, host country and third country as the managing director.

2.1.5 Compensation package...
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