Final Project

WeaveTech Case Anaylsis

Final Project

Strategic Human Resources

17TW3

Carol Mickens

Professor Marlene Frasca

March, 14, 2017

 Abstract

WeaveTech case study analysis will show the importance of interrelations between

human resources, business metrics and management teams. The company will need to develop a

strategic workforce plan that addresses the performance management. Labor relations, risk

management and organizational change that the company may have to experience. Changing

culture, vision, mission and adapting a value system to fulfill the needs of employees,

management, and the owners, CVX.

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Introduction

WeaveTech is a manufacturing company located in the Leatherstocking region of upstate

New York. For many years, this area and entire region was a nationally known for its

manufacturing and leather refining. Located in a small town, Gloversville just off the New York

State thruway. The 1930s through the early 1960s was a period of prosperity and excitement for

this region then manufacturing became expensive and paying employees equally so. The region

slowly lost most of this to other countries and outsourcing of labor; WeaveTech was one of the

survivors. To remain in this category the company, management, Human Resources, and the

employees will need to adapt to the changing times of manufacturing. Changing business

conditions, accompanied by the departure of one of the valued employees would one of the

factors for WeaveTech to consider (Beer, Swiercz 2015). The company has employed 315

managers, over 1800 employees with headquarters and three plants within 100 miles. Initially the

company had “kept a low profile” with a motto “survival before pride” (Beer, Swiercz 2015).

The company had prospered then declined and now with CVX purchase the company will be

phasing out military clothing and developing a high end athletic wear clothing line. With this

comes many changes the case analysis for WeaveTech will be composed of many elements

including: business metrics, workforce planning, organizational operations, federal laws and

regulations, performance management, organizational needs, appraisal methods, total rewards,

compensation and benefits, communication, complaint procedure, discipline process, conflict

resolution, risks, due diligence, change management and change models. There will be many

challenges and opportunities for all.

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In today’s global economy, both small and large multinational organizations and

government entities are experiencing changes in the business environment that may require

strategic management of management and employees within the organization (Zwilling 2012).

Strategic leadership of human resources is not the only part of the whole that is included in

decision making; all organizational leaders must understand how the company’s most

competitive advantage, its people and how they fit into the working environment and provide

creative solutions to sustain and grow the business. Business metrics will be an important aspect

of determining the future of WeaveTech.

Business Metrics

Business metrics can be the numbers that will give the important information about the

many processes that are going on in WeaveTech. Accurate measurements about the workings of

the company and often the essential point for predicting the success of the new venture. There

are two kinds of metrics; operational and financial both important for accurate forecasting.

Operational can determine how WeaveTech’s performance is through production and turnaround

time. For example, WeaveTech is producing high end athletic wear and should have a customer

base to support the amount of clothing produced is the inventory is larger than shipment then this

can present a problem for cash flow. Financially WeaveTech will need to track profit, ratio, and

sales; this can determine how the organization is converting operation and performance into

financial goals. There are many kinds of business metrics and WeaveTech will need to examine

each one to remain a competitor in the field of athletic wear.

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Business metrics can be categorized into eight sections including: sales revenue,

customer loyalty, cost of customer acquisition, operating productivity, size and gross margin,

monthly profit and loss, overhead cost, and variable cost percentage. Sales revenue is income

from customers purchases minus the cost of things like returned or undeliverable merchandise.

For WeaveTech this can include their military clothing and the new high end fitness clothing.

The issue may be the high inventory or those clothes and the new line waiting for a customer

base. Customer loyalty will be the acquisition of new customers for the new clothes; this may

include encouraging the military clothing stores to carry the athletic wear. The acceptance of the

line can be judged by customer surveys, employee feedback and sales analysis (Zinder 2015 in

Noe pg 60). According to Richeld, “five percent improvement in customer retention will yield

twenty to one hundred percent increase in profits. (Richeld, 2015). Cost of customer accusation

is measured by the total cost associated with acquiring a new customer marking and sales. This is

determined by dividing total accusation expense by total of new customers. Over time the cost of

acquisition should go down as growth of brans image goes up (Forbes Magazine). Operating

productivity, this can let a business know of the inner workings of the company’s employees and

their satisfaction. WeaveTech can measure staff productivity and this may show their satisfaction

with their job. The production of the new athletic wear may take time to take on a life of their

own, meaning the employees will be satisfied in manufacturing them. Size and gross margin is

the total sales revenue minus cost of goods sold divided by total sales revenue expressed as a

percent. The higher the percentage the more the company retains each dollar of sales to service

its other costs and enjoy profits (Forbes 2015). Monthly profit and loss should include fixed and

variable costs; these include rent or mortgage, outstanding bills and the amount that will be
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charged for the new clothing. Overhead costs can be the fixed costs such as closing plants,

changing manufacturing sites, or switching from gas to solar energy. Inventory and hours

worked in production will need to be measured helping to determine profit. The business metrics

may have an influence in the workforce plan.

Workforce Plan

WeaveTech’s strategic workforce plan should include: forecasting future demands,

supply and labor surplus or shortage; goal setting and strategic planning, and program

implementation. It will be important to understand that the employees are the heart of the

company and an asset and the “most important driver of business success” (Schweyer 2004). To

accomplish this the following questions will need to be addressed: what are the strategic

objectives set by WeaveTech’s leadership, strategic challenges and opportunities facing the

company, and the performance metrics needed to track for organizational goals? WeaveTech has

challenges and opportunities that should be considered. The challenges include: it is changing its

mission and may need new employees to fill the positions, the existing workforce may need

training, scarcity of resources, and changing demographics. The opportunities include: The

President is willing to bring manufacturing back to the United States (2017 Inauguration

Address) and there could be a monetary stipend given to existing companies, the new clothing

line has probably been researched and the need is evident, the employees may be motivated by

the change and be willing to be more creative and innovative and a future with a new customer

base. A workforce plan will be needed at WeaveTech for the company to survive in a world

where manufacturing is done outside of the United States. Preparing a three-year plan to assist

WeaveTech in reaching and sustaining their mission, vision and goals should include business
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metrics that will be used to measure the achievement of the organization’s strategic goals and

objectives and a workforce plan.

Three Year Plan

Developing a three-year human resource plan is important in the success and possible

longevity of the future of WeaveTech. Forecasting future demands, supply, labor surplus and

shortage, goals setting and strategic planning and programs implementation. There are business

metrics that are used including: performance indicators, scorecards, employee talent and supply,

sourcing recruitment, hiring, talent, management, and planning retention. WeaveTech’s motto

was “the right people, in the right job, at the right time” (Beer, Swiercz 2015). The

company is changing its strategic orientation gearing the clothing to high end performance from

a military customer base. In developing this plan, it will be important to focusing on forecasting

future staffing requirements and competencies, this can be based on anticipated attrition,

resources, trends, diversity, goals, and top management work goals. The existing employees

were hired to perform in a setting where military clothing was the main commodity (Beer,

Swiercz 2015). Many of the managers had military backgrounds therefore having a working

knowledge of clothing and protective equipment that worked. There are two options that can be

considered; either train the existing employees or hire an entirely new group that will need

specialized training. This will assist in developing strategies and actions to implement a

competent workforce. Monitoring the progress and success at one year intervals can allow for

any changes that may be necessary. For example, advanced training for employees, adjustments

in bonuses, need for new equipment, and customer satisfaction (Vivek, Richards, 2013).
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Human resources will need to become familiar with all the hiring and discharge policies

of Weavetech this may prevent any litigation and cost of lawsuits that may be filed by workers or

management. Frank Jennings had been given been given a hand-written memo from the former

CEO and reminded that there was a “no lay-off policy. This could be an issue for all employed

by the company. Developing a workforce plan can be a problem solver.

Organizational Operations

Developing a workforce plan requires many steps all important for the product. The plan

will address the workforce profile of WeaveTEch, the training and development of programs.

The plan will include: strategic objectives, examining the internal and external environment, the

current and future workforce profile, gap analysis and periodic reviews. WeaveTech is planning

to change their manufacturing from a military based clothing industry to that of “high-end

performance” (Beer. Swiercz 2015). This will require a change in customer base as well as skills

needed to market, produce, and sell the clothing. The external and internal environment will be

changing as well. Externally the military clothing will be phased out and possibly the employees

who were hired to produce this line. The high-end performance clothes may need a new skill set

to design and manufacture; This may mean hiring new employees or retraining the existing ones.

This will be a challenging process because of the “no lay-off” policy. The internal environment

can change as well; the business plan may need to gain new resources, raw material and the link

between it and the workforce. The gap analysis can show where the company wants to be in the

future and how it needs to operate to get there. The change to performance clothing and shifting

away from military is a risk and changing the workforce either by training or hiring a new staff

can be a challenge with legal issues.

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Federal and Legal Issues

WeaveTech had a no lay-off policy and this issue could be grounds for a personal or class

action lawsuit. Manager Jennings had been given a “hand written note” regarding the Lay-off to

be accomplished, this could have some internal complications (Beer, Swiercz 2015). It will be

important for HR to become familiar with the federal and state laws regarding hiring, discharge,

reorganization, benefit package, retirement, and all general legal issues. One important aspect of

the legal issues facing w WeaveTech is the policies that are in place for the hiring process,

background checks, letters of recommendations, ability testing, and drug testing. It will be

important to make sure that all employees are who they say they are, in the right position and

that managers are the same. The process of eliminating twenty percent of them will need to be

done so that there will be no course for any legal actions (Noe, Hollenbeck, Gerhart, Wright

2017). Ultimately the company will need to comply with all rules and regulations assuring that

there is no discrimination of any kind and that all insurance, benefit and bonus packages are in

writing for all to see and that they are equitable and transparent. The specific laws concerning

discrimination, ageism, race, and the Employment Act. These can be grounds for lawsuits that

will eventually cause the company to pay hundreds of thousands of dollars. Looking at the issues

and having the knowledge to prevent them will be key.

Discrimination of any kind is wrong. Today’s population is growing older and with this

phenomenon organizations may have to look for the older employee to hire or fill vacancies

(Wren 1995). With age also comes some physical disabilities that may also have to be considered

when hiring. It will be important for HR to be familiar with all rules and regulations, Equal
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Opportunity, Title VII and Civil Rights. Understanding and complying could save WeaveTech in

the end.

The reason for creating and implementing a workforce plan is economically driven and

involves looking at the big picture; past, present and future (Adkins 2014). It can increase

productivity, decrease labor costs because the “right people are in the right place at the right

time” (Beer, Swiercz 2015). Providing succession planning, making sure key positions are filled

by the qualified people; leadership development, coaching and mentoring with feedback,

providing employees a positive approach to job improvement; recruiting the right people,

retaining the long time loyal productive employees, and making sure that there is a contingent

workforce.

It will be important that CEO’s, management, and workers are involved in feedback. This

is an ongoing process that will allow the company to continue to move forward. It also can foster

learning for all including the new products success and employee satisfaction. Tracking financial

results will required for continued success. This strategic change in a clothing line may put the

company in high demand for outsourcing to other companies and have the ability for them to

manufacture the clothing of part of it for them.

Performance Management Systems

Performance management is a concept and a system that companies use to ensure that

employees’ activities and outputs are congruent with the organization’s goals (Noe, Hollenbeck,

Gerhart, and Wright 2017). This system may have the opportunity for an organization to gain

and maintain a competitive advantage in the business world. The process of performance
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management has several parts that work together including: defining the performance outcomes

for the company, developing goal, behavior, and actions to achieve outcomes, provide support

and ongoing performance discussions, evaluate performance, identify improvements, and

provide consequences for performance results Noe, Hollenbeck, Gerhart, and Wright 2017). This

should be accomplished while following federal and state rules and regulation. WeaveTech’s

mission is to continue to produce high quality, high performance clothing a change from military

goods; it is committed to ensuring that the employees are taken care of through benefits and

compensation plans and long term success for the stakeholders. Performance management

systems (PMS) can attract, retain, and created innovative employees who can deliver the best

quality products.

Flaws of Weavetech’s PMS

Currently WeaveTech has an appraisal plan that uses a score from one to five, five being

the best. This system has a couple of flaws. The first one is that it is subjective and depends on

the person who is rating the employee. The person could be having a difficult day family issues

or may not like the employee. For example, a manager may be an ex-husband or one who

dislikes the employee for some reason. Secondly, the numerical system may not be accurate in

that if a person rated a four how much better is four point one? Is that amount enough to apply

more compensation; once again it is subjective.

Creating Changes for WeaveTech’s PMS

Changing the PMS of WeaveTech to enhance the organizations strategy, mission and

support the employees will be important for growth and productivity. Although the process may
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be difficult because the company has had a long successful run as WeaveTech the producer of

military clothing and a reward system that has been in place for years. However, with total

participation of all employees, management, and the owners it could run smoothly. The mission

of the company is “to produce high quality, high performance apparel to meet customer’s

demands” (Beer, Swiercz 2015). The employees had been producing high quality gear for years

with a satisfied customer base. The change to producing the new apparel would require training,

individual and group with feedback and continuing education. One thing is for certain there will

always be change and with communication and participation the entire company should be able

to adapt; it will take time. WeaveTech is “committed to the well-being of our employees”, this

should be every company’s philosophy. The commitment should remain foremost in the mind of

CVX Partners and managers as they may have to change some of their incentive package,

bonuses, comp, and healthcare. Once again communication will be instrumental is this process;

“communication is essential in gaining support for change” (Newstrom 2015). Commitment to

shareholders may require that they understand that until the company is producing at the same

rate and the new clothing line is fully accepted and generating the same revenue that their bonus

payout may need to wait or be less. “A fundamental way to build support for change is through

participation”; it encourages all involved to discuss, communicate, and make suggestions Ford

and Ford 2009).

Meeting Organizational Goals

The behavioral approach can be used to assist the employees in meeting individual and

organizational goals. This system will define the behaviors an employee must exhibit to be

effective in the job (Noe, Hollenbeck, Gerhart, and Wright 2017). Determining what set of
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measurements will successful will trial and error, using what works best for the employees and

management. Specifically, the competency model will identify and provide what will work f or

the manufacturing occupation, organization’s culture, job, family, or any other specifics.

Performance appraisal methods can measure this.

Performance Appraisal Methods

WeaveTEch had used total quality management (TQM), a “customer focused data driven

production system. Also, the performance based pay(PBP), an incentive based form of

compensation that gives money rewards that are linked to performance outcomes (Beer, Swiercz

2015). Initially the new clothing line may not be as successful as the military clothing and

changing the way in which a bonus is paid out. A plan that includes, a special employee parking

place, a day off, a recognition lunch for the creation of a new design or way to cut manufacturing

time could work and have a positive effect on employee morale. It has the capability to foster

creativity in all employees. There are some legal and regulatory issues that may need addressing.

Legal and Regulatory Issues

This can be costly for any organization and it I important for CVX, WeaveTEch,

managers and employees to understand legal guidelines. Discrimination and dismissing

employees are two lawsuits that can be filed. Discrimination can be race, religion, age, disability,

and other issues and because measuring performance is subjective it will be important to

consider all of them. Firing an employee can be another reason for a lawsuit and the court will

rely on the written performance measurement system, black and white. Some steps that can be

taken to prevent any legal issues include: precise documentation, several people who are
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appraising, upper management involvement, and employee clarification (Noe, Hollenbeck,

Gerhart, and Wright 2017). Adjusting a rewards program to encourage the behaviors to reward

employees will be important, making sure that they are legal and employees are informed.

WeaveTech Total Rewards Program

WeaveTech can use the total rewards program to encourage proper behavior and reward

its employees. Many people have an emotional attachment to their job; they care about the

organization, people who work there and what the public likes and wants; they have a personal

stake. The company can make sure that employees are rewarded in some manor, time off,

monetary bonus, and employee security. Employee benefits should be protected, healthcare,

continuing education, and other compensation. Making sure that employees are rewarded shows

that a company cares.

Self Service Technology

Human resources is a challenging and changing position that may require people to

constantly update information. It will be important for employees to access to their information

to check for accuracy or update. This can be accomplished through a computer program or phone

system that has voice recognition (Anheier, Doherty 2000). The computer system can generate

forms, update payroll, and provide any organizational newsletters. The phone can provide access

to Human Resources and the ability to speak to a person with any questions and concerns. Both

can allow for cost saving, employees can answer question independently; cost avoidance, no

increase in HR personnel; and revenue generating, allowing employees to obtain items from

Amazon or other companies (Anheier, Doherty 2000).

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Performance Management System for Weavetech

WeaveTech’s strategic mission is to “produce high quality, high performance apparel to

meet the demands of the customers “Beer, Swiercz 2015). To maintain this the company could

use the following system: goals setting, performance evaluation, align performance results with

other HR programs, identify trends and make data driven decisions. The purpose of establishing

objectives is to identify a limited number of highly important results that will have an impact on

the success of the organization. These are statements of important and measure outcomes, which

help employees understand that they are doing the right thing. Supervisors could create their

goals and objectives, submit them to the managers and then they are passed on to the employees.

Managers can incorporate the objectives and meet with the employees to coach them ensuring

that all are understanding what is being done and through feedback there can be a better

understanding (Park 2013). Management and employees can review the performance result at

the end of the year based on the objectives.

Evaluation of Plan Laws and Regulations

Evaluating this plan for legalities, federal and state will be accomplished through

understanding discrimination and dismissal laws, also by have the employees know their rights

and company policy (Noe, Hollenbeck, Gerhart, and Wright 2017). This may prevent any loss of

time from work and settling a lawsuit for a great deal of money. This could put the company in
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Meeting Individual Needs

Employees want to recognized for a job well done however, it will be important for them to

understand and know how to achieve the goals. Goals setting, coaching and feedback are tools

that can be used to accomplish this. Through communication and yearly plan evaluations

employees can become comfortable with the system, understanding what is expected of them

will enhance performance. When individual needs are met, it can make for satisfied employees

who will work to achieve their personal goals thus benefiting the company. Maslow’s hierarchy

of needs allows for the employees to satisfy their personal goals and needs making them more

creative and innovative (Maslow 1974).

Appropriate Performance Appraisals

There are many different appraisal measures that can be used; benchmarking, key

performance indicators and mission and vision statement. The mission and vision statement are

important to the company and employees; all efforts to improve performance should be headed

in the same direction for all employees (Stone 2012) Key performance can enable the data that is

collected to be discussed and reviewed by all involved. This information can assist in developing

a reward system for all employees.

Reward System

Developing a reward system may require that the company be transparent in that all

monetary rewards are equitable for each job category and or title. Managers may receive a

different bonus scale than hourly earners because of the position and what is expected of them.
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This may have ties to the education and experience that they have. Hourly workers bonus may

be related to pieces of clothing manufacture, creativity, and innovation. An across the board

bonus could be paid for a yearly increase in sales and customer satisfaction. There can be not

discrimination and should follow nay federal and state laws and guidelines.

Compensation and Benefits

The design process is started by identifying desired outcomes and goals for your

organization, your compensation philosophy. The philosophy is formed by considering several

factors; the balance of direct and indirect rewards, the complexity and responsibility of an

employee filling it, as well as focusing on internal versus external equity. The success of the plan

and organization will be to achieve the best results (Newstrom 2015). Job evaluation can be

graph for an accurate picture, easy to read and compare year to year and with other employees.

Pay programs can be leveled with job categories such as managers, hourly employees, ancillary

employees; this will be a comprmible amount of pay related to skills, experience, and longevity.

All his information can be shared with stakeholders through a computer program and written

information. As the business grows and changes the plan may need to as well.

Developing a reward and benefit package that is equitable for all comparable employees

will be needed for the company to survive any legal issues that may arise. The goal of this

process is to ensure the employees are valued and then they will want to achieve more, be

creative and innovative for the company and themselves. Conflict in the workplace is common;

there can be issues related to personal issues, work misunderstandings and other issues however

handling it is the part where all involved, the company, managers, and employees will need to
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understand the process of acknowledging that there is a conflict and the process to resolving it.

There are several programs that can be used and the organization’s culture, mission, and value

system may determine this also if there is a union presence the process will be different. There

are three parts to consider in the program including the complaint procedure, discipline process

and conflict resolution (Newstrom 2015).

Complaint Process

The complaint procedure should begin with a discussion; talking to the supervisor, or

manager about the problem, considering all the issues, what is involved, with who, a and any

other specifics. The supervisor should have this in writing and use communication skills. It will

be important for the supervisor to listen and hear what the employee is saying. The next step

should include a written response in a timely fashion; a week would be appropriate; this would

give the supervisor time to look at the facts, gather information, and make a judgement. A

meeting should be scheduled to discuss the issues with the employee and an impartial person

could sit in. If there is an issue with this plan, then the employee could request the assistance of

the Human Resource department (HR). The HR department can assist the employee as well as

management if there are issues that cannot be resolve; the problem and the date when the

incident occurred. Suggestion can be made to resolve any issues with a copy of a written report

of findings and managements solutions. It will be important for all involved to have their name

on any documentation; this will decrease the need for further investigation should there be any

legal actions. Usually HR has a major step in the process. Sometimes the employee complaint

deals with their supervisor ((Noe, Hollenbeck. Garratt, Wright 2017).

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Employer Labor Relations Programs

Employers want their employees satisfied with their job however there are times when issues

arise and they should be addressed by management. First there should be a written policy for

this and employees would be given this upon hire. WeaveTech is like any other company that

is facing a change in their business?

WeaveTech is changing its changing its manufacturing from military to high end exercise

clothing. This change has also deemed a reduction in management and employee skill set.

The company should be prepared for complaints or grievances. The rules and regulations

should be clear and the company prepared to solve the problems through an informal and

formal process making sure that federal laws are not being violated and rules and regulations

are followed (Venditti 204). This change can have other effects on WeaveTech. A plan to

institute immediate downsizing can include:

WeaveTech will be losing twenty percent of management this change may trigger the

loss of employees. This may occur because of loyalty or the change in manufacturing

processes. Approaching this downsizing with some specific steps may include” approach the

process as a long-term strategy, use it as an asset, and an opportunity for organizational

improvement (Buch 2002). This can be facilitated through communication and support for all

involved. Following a process that allows for long term effects on the manufacturing process

may let employees know that the company will still be manufacturing however a new and

improved line of clothing. Using this as an asset can lead to retention of employees who

share the mission, goals, and values of the WeaveTech (Koslowski, Choa, Smith, Headlund

2003).
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The downsizing process at WeaveTech is an issue with psychological effects on the company.

Discipline Process

WeaveTech has been manufacturing for many years in Upstate New York. It has

employed over 1800 and 315 managers. This is a large number of people from a small area;

the company had intentionally kept a low profile (Beer, Swiercz 2015). It will be important

for all employees to understand the corporate culture this mat prevent any misunderstanding

when it comes to the discipline process. Because the company is changing its product a shift

away from military issue may change the atmosphere. This possible alteration of workforce

values may change how the employees feel about hard work (Campbell, Flemming, Crote

1995). The company has run smoothly however the change in goods being produced may

make for a change in disciplining any employees for infraction of rules and regulations. This

plan can include: discipline without punishment, providing consistency, fairness and more

than anything else a learning event for the company (Campbell, Flemming, Crote 1006).

Aplan for WeaveTech should incorporate a continued learning process of corporate culture.

This may involve learning why the company needs to lay-off managers, change

manufacturing processes a md the discipline process for all infractions.

The first offense can include an oral warning. Management or HR can discuss any

employee behavior that is unacceptable or that a rule or procedure has been violated. This

can be accomplished face to face or through some medium. The second offense can be an

oral or written warning through the same process. The third the same way however this may

be more complicated with managers, HR and some written warning given. WeaveTech can

determine if this fits in with their culture. The fourth offense may mean a more more sever
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discipline including suspension from work and discussion about why the continued violations

may be occurring; are the rules not clear, is there a problem at home or some other difficulty.

If a fifth violation occurs termination may occur. The company will need to document all

warnings, keep all documents, and make sure that all laws are being followed (Noe,

Hollenbeck, Gerhart, and Wright.2017). WeaveTech should develop a learning process from

the conflict resolution and discipline process that can include training for managers and HR.

Conflict Resolution Training

Conflict can be a learning process for any company however training the appropriate

people to manage this will be important. It can produce one of four conclusions; win, lose,

win, win, lose, lose, and lose win. Choosing the right people to train and support a conflict

resolution program will be important as well as the program. WeaveTech is about to be in

transition; losing twenty percent of the managers means that there will be more responsibility

placed on the remaining ones and they will need learn how to handle the company in a new

culture. Building a traing program for the managers will improve the company values,

mission, and culture.

Training can help to ensure that everyone is on the same page, especially in this time of

change. The training program can include several or all the managers however choosing a team

that will take responsibility of conflict resolution would be appropriate. They will handle all the

issues including legal aspects. The team will need to understand the root of common

workplace conflicts or disputes, this will include the culture of the workplace and the

personalities of the employees. WeaveTech has had a stable workforce one that is loyal.

Facing the conflicts and not dismissing them no matter how small they seem, this can assist
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in determining how to identify strengths and weaknesses especially when the new

manufacturing process begins. Learning how to mediate and negotiate will be important. This

can mean the difference of warnings, suspensions, or terminations. This problem solving may

avoid any legal issues that may occur. Unresolved workplace issues can cost thousands in

fees and alter the confidence and trust of employees (Buch 2002). This is an ongoing process

with continual learning.

Conflict should not be ignored; it can be a learning process. For WeaveTech it will be a

new beginning for the employees, management, and the owners. Communication will be

instrumental in accepting that conflict is part of the business and employees however what is

accomplished with the resolution is what will be important. With all adjusting to the new

culture, production, emotions of the employees, the customer base will be satisfied and

business. should thrive. Managers should be aware of the competitive operating environment.

Consequently, this forms a need to implement change to maintain as well as develop an

enterprises’ competitive advantage. It necessities changing people’s behavior regarding their

attitude in the workplace. The genesis of these change would change in functional direction,

structures, responsibilities, performance assessment, redesigned processes, or inventions in

technology. All of these need to be managed (Cartwright & Cooper, 2013). This involves

motivating the staff so that they can facilitate competence in the transformation path. For it to be

effective, it involves some processes: Change readiness as well as risk assessment, setting out the

map of management change and execution of the changing plane. It’s achieved through,

identification of government structures, effective change communication, and appropriate change

sensitization.
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In analyzing the risk management programs and procedures implemented at WeaveTech

will be crucial in the formulation of organization change strategy. This helps understand the

potential legal risks associated with downsizing. CEO Ron Gilford required that 20% of

WeaveTech managers be cut from the company’s payroll. This was embracing the new change

insisting that a high-performance past does not guarantee a high-performance future. Even if they

are justified if there isn’t enough work or when used as a cost-cutting measure, if not well

integrated they can result in a significant legal cost (Cartwright & Cooper, 2013). It can as well

damage the productivity, morale, and loyalty of the workforce left.

There exist other risks too which must be addressed. Poor and inadequate

communications, disagreements in retention of competent staff, diverse opinions in matters

relating to branding, marketing and sales, a mismatch in fitting the different cultures. As a matter

of concern in this business, mergers and acquisitions have the obligation to comply with the

wage laws relating to employee termination. It’s required that mergers must pay discharged staff

their accruals as well as benefits at the termination period (Uludag, 2013). It’s clear that the staff

aren’t Actual employees of the successor entity until the relationship is official. Mergers or

acquisitions shouldn’t violate laws and the hiring decisions. They should be mindful of wage

parity issues and come up with wage decisions that are fair and non-discriminatory.

These issues in mergers and acquisitions are like those of WeaveTech Limited in that the

consequences of their actions result in increased cost, lower productivity, and morale, as well as

reduced loyalty to the existing employee, left behind. To mitigate these risks, there should be

independence in dealing with the issue both the acquired and the acquirer company unless it’s

specifically outlined in the transaction document. The policies being implemented should be
Final Project 22

mindful on the wage parity issues. Decisions about wages should be non-discriminatory and be

in a fair manner. Mergers should be thoughtful to the way it integrates new staff into existing

workforce. Haphazard treatment of this staff who are new to the changed work environment can

result in unnecessary and costly litigation (Bowles, 2012).

In acquisition and merger, strategic fitness is key. The concern here is how long the

process of integration of the workforce will take and the cost involved. It should also be

concerned about the contracts that exist between the company and the employees to know how to

handle the scenario. The key is also the employee/management issues. This will involve such as

a summary of labor disputes, employee’s benefits, deferred compensations as well as retirement

plans, employment manuals and policies and any involvement of key employees in a criminal

proceeding or significant civil litigations (Bowles, 2012).

In the case of mergers and acquisitions, the management focuses keenly on the technical

and financial details of the deal. There may erupt different changes. These would be among

others; diverse products and services, greater market share, fresher ideas and visions, innovation,

as well as greater efficiency. Fortunately, or, unfortunately, this is not a guarantee. In any case,

due diligence must come into play.

WeaveTech has the option of using several change models one, John Kotter 8-steps

process of change model. It helps identify major challenges facing modern business leaders and

how to remain in business in the highly competitive environment. With this model, the

organization can achieve its need for high-performance change. This model helps examine the

competitive markets, focus on the areas to improve, and gets the group to work as a team. It also
Final Project 23

helps in communicating the vision and strategy effectively. This is the requirement to be

successful since there’s no conflicts and resistance to changes. With this, the organization

remains relevant and survives the competitive environment (Newstron 2015). Another model

Lewin’s change model may also be useful

This model was developed by Lewin in the 1949’s and is used by many organizations

today (Ulrich 2009). This process involves unfreeze, change, and refreeze. The three separate

stages allow for employees to prepare and adjust making for a smoother transition. Change is

inevitable and with a changing economy important to understand. Unfreezing is the stage that

prepares for the change with explanations showing the employees how and why the present

system can not work any longer; this can be accomplished through, charts showing sales,

financial status, and customer needs. WeaveTech needs to change with the times; military

clothing is declining and athletic wear is becoming more popular. Challenging beliefs, values

attitudes and behaviors can accomplish this a part of the organization that has been in place from

conception. Introduction to this and getting the employees to buy into the process will be

important for the change. Change involves having the employees examine new way to get things

done (Newstrom 2015). Employees should be comfortable with the change that is taking place.

During this period, all will be involved in transitioning the company away from military clothing

to high end athletic wear. Communication will be the most important aspect in this stage.

Refreezing is the third step. Employees have “embraced the change” (Lewin 1946). The

company has reached a place of stability and there will be signs of success; employees are

comfortable with their new job description and are showing their support; a new reward system
Final Project 24

can be in place and management keeps all informed. This model may best be suited for

WeaveTech.

Risk Management and Organizational Change

Mergers and acquisitions have been used for many years to grow organizations or gain

control of other companies to incorporate them. Today’s economy has been one of the driving

forces that dictate the use of them. WeaveTech is not immune to either of these tactics in that

they are transitioning from a producer of military clothing to high end athletic wear. The 1990s

had a rise and then a period of slowing down related to economic growth and a shift in world

trading. From 2000 to 2007 the use of them declined sharply because of the banking crisis

(Sloman, Hinde and Garratt 2013). Today, still facing uncertain times, a new president who is

changing the way the economy will deal with foreign countries and trade sanctions and a shift in

business holdings may change this as well. Also, president Trump is planning on decreasing

military spending therefore affecting the production of military clothing needed (Inauguration

Speech 2017). WeaveTEch is in a period of transition with organizational changes, new policies

and procedures may need to be developed with due diligence activities and a change model that

will be effective for all.

Mergers can provide a faster means for growth; the company can: acquire new capacity

and new consumer demand” (Sloman, Hinde and Garratt2013). This process can also allow the

business to become larger and possible prevent them from being taken over, providing

geographical expansion, and build their empire. A merger is defined as a “joining of two or more

different organizations under one common owner and management structure and acquisition as a
Final Project 26

‘process of one corporate entity acquiring control of another corporate purchase or stock swap”

(Christensen, Alton, Rising and Waldeck 2011). Both processes come with benefits and risks.

The benefits can mean building a larger empire with more customers. The risks include cultural

change, new goals and mission, loss of employees and many legal challenges. The HR (Human

Risk Management and Organizational Change

Resource) department will need to prepare for all the different situation by being proactive,

identifying specific litigation risks and can interpret, apply employment laws, and develop

policies and procedures. The ability to be proactive may avoid litigation. The possibility of

WeaveTech merging with another company could be beneficial or mean disaster for the

employees.

Two risks associated with merging are loss of employees and cultural values. Merging

can mean that many employee positions could be eliminated. This could come from workers

from the other company or spending less because of finances. The culture could be lost because

the wo companies could have completely different company cultures or the merged company’s

culture could be more in tune with the new organization. Some companies weigh culture heavily

before embarking on a merger (Noe, Hollenbeck, Gerhart, and Wright 2017). This could come

with a legal price for the parent company Partners.

Employee and Organizational Data

Merging with another company require information sharing including: financial,

employee benefits and compensation customer base and product information. Any release of this

information could mean trouble. People issues may be one of the reasons the merger may fail
Final Project 27

(Fairclough (1998). There are several steps that can be taken to protect this information.HR may

face some difficulties in integrating and standardizing practices across company’s businesses

(Noe, Hollenbeck Gerhart, Wright 2017). For example, the company may decide to keep the pay

and bonus structure of WeaveTech. The health and retirement package could be a combination of

the two companies or of the merged company. Risk Management and Organizational Change

It is important for HR to explore the many possibilities when a merger or acquisition is

rumored. Identifying litigation risks, describing the role of HR in each of the major phases and

protecting against risks. The litigation risks include: securities and class action, shareholder

lawsuits and federal court lawsuits. These will need to be examined during each phase of the

merger or acquisition; identifying the buyer, securing third party service, preparing for the

transition, negotiation, valuation and final agreement and implementation (Christensen 2011).

Risk Management Policies

Today’s larger mergers aren’t about just one company gaining a new product or

technology; instead, companies are acquiring each other for their outstanding talent, including

engineers, sales team and marketers who have made a consolidated effort for greatness a good

customer base with satisfaction in production and delivery, and brand. There are several policies

that can be put in place at WeaveTech to mitigate the organizational risks including: pre-

combination, combination, solidification, and assessment. The combined companies HR

department can address the risks and make sure that steps are taken to reduce them. In stage one

HR can conduct a due diligence, looking at the company to be merged with examining potential

risks such as compensation benefits, and other policies. They can analyze agreements that are in
Final Project 28

place for example, after twenty years’ fifty percent of salary or hourly wage will be retirement.

hR can look for areas of existence to avoid litigation (Daber 2013). Stage two of the merger HR

issues can be addressed to control risk. This area is incorporating activities such as reporting

structure, employee lay off and the importance of communication. WeaveTech has a no layoff

policy the decision should be made to keep or modify. Stage three HR must work at making the

merger come together as one. This can be accomplished by addressing all concerns of all

employees and shareholders (Jackson 2012). Communication and listening skills are

essential elements of the new organization. This can build trust avoid misconceptions and ensure

that the culture, mission, and values of the companies have joined together. Discussing due

diligence issues will also build trust.

Due Diligence

Mergers and acquisitions require investigating due diligence, financial matters,

technology, customers, sales, confidentiality, and data security. Assessing the risks and

opportunities creating trust for both businesses, identifying all issues that may impact the success

will include HR involvement (Harroch, Lipkin 2013). The employee’s information will need to

be safe guarded and they will need to know how. Employees are the backbone of the

organization (Cartwright, Cooper 2013). This may increase retention and satisfaction. This data

security will build trust an avoid deceit. Technology should be used to protect them and build a

better customer data base. It can also assist in discovering and keeping track of any pending

lawsuits. This will be important in understanding the financial standing of the other company and

their bottom line. The resources of the two companies will be important to understand in that
Final Project 29

employees are the most important part incorporating them with the new company will be vital in

the new strategic plan (Beer, Swiercz 2015).

Change Management

There is one thing that is certain and that is change it can be in everyday life, family and

in the business world. Change in operations, mergers acquisitions or downsizing. It will be

important that employees, managers, and HR be prepared for it and can communicate what will

be happening. There are models of change that can be useful for companies.

WeaveTech could use John Kotter 8-steps process of change model. It helps identify

major challenges facing modern business leaders and how to remain in business in the highly

competitive environments. With this model, the organization can achieve its need for high-

performance change. This model helps examine the competitive markets, focus on the areas to

improve, and gets the group to work as a team. It also helps in communicating the vision and

strategy effectively. This is the requirement to be successful since there’s no conflicts and

resistance to changes. With this, the organization remains relevant and survives the competitive

environment.

Step one of the process is creating a sense of excitement and urgency, making sure that

all understand that the company needs to change when the opportunity is present. Identifying the

threats and opportunities, new venture and developing new athletic wear. Step two requires

forming a coalition with strong leaders, asking for commitment from all. WeaveTech had a

strong company with loyal employees and it would be important to keep that atmosphere. Step

three will create the vision for change and strategy for getting there. The company values of hard
Final Project 30

work and Ron Gifford’s five-year plan of aggressive attention to new athletic wear (Beer,

Swiercz 2015). Step four requires all to be committed to the vision, addressing concerns,

providing training, and leading by example. Step five can remove obstacles and recognize and

reward employees; Gifford’s compensation plan should be explained and make sure that

employees understand. Looking at total quality management and performance base pay and the

way that it supports culture will be important. Step six can create short term wins, special

projects involving employees and creating teams can be supportive of employees. Step seven

will build on change and success. Step eight will “anchor” the changes in corporate culture.

Continued training, providing feedback and talking about the future of WeaveTech will

encourage employees to stay excited for change. Another change model that the company could

use is

WeaveTech is experiencing a change that can put the company into the future with the

high end athletic wear that customers want. Entering the competitive environment with all

employees and management excited and ready for the change can be a model for success.

Communication will be instrumental in developing the plan, creating the vision, and conveying

the mission. Providing feedback will ensure that all are aware of their performance and what they

can do to make sure that they are secure in their job and satisfied with their work. One thing is

sure and that in today’s business world companies will need to be prepared for change to keep up

with competition (Newstrom 2015). WeaveTech saw the need for change and took the

opportunity to change with the times. For change to be effective managers should be aware of

the competitive operating environment. The genesis of these change would change in functional

direction, structures, responsibilities, performance assessment, redesigned processes, or

Final Project 31

inventions in technology. All these need to be managed (Cartwright & Cooper, 2013). This

involves motivating the staff so that they can facilitate an effective change environment.

WeaveTech is headed for the future; HR, management, and employees will need to

embed themselves in the culture, values, mission, and support customer satisfaction. (Jones,

Aquirre, and Calderone 2004). HR’s strategy will need to focus on building skills, motivation

and assisting all in building a successful business. WeaveTech has had a good reputation

affording the employees with benefits that were developed to fit their needs. Some of the goals

include; downsizing by letting twenty percent of management, promotion from within, training

for the production and customer satisfaction of high end athletic wear, and employee

engagement. The employee are the “gold” of the company and their actions affect business

success (Beer, Swiercz 2015). Employees will be key in product development and supporting the

culture of the new production.

Employees should be allowed into the decision-making process for benefits, incentives,

training, allowing for challenges to energize the atmosphere (Wright 2008). WeaveTech has

developed a five-year plan to assist in success. Ron Gifford is aggressive in his plan making sure

that resources are used appropriately, raw material and employees. The company is aware that

the new technology needed to produce the high end athletic wear is not enough; they will turn to

the “private sector” and hired a consulting group to help. The executive team will be interviewed

and all the employees should as well. This can build trust and develop a relationship among all.
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