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The Case of Brunel Engine Components

The Case of Brunel Engine Components

 Brunel is an independently owned company, mass producing parts for car engines at its plant in the north-east of England. It employs 200 people in total, comprising 150 semi-skilled production workers, 15 clerical workers, 20 technical staff and 15 managers. Despite operating in an increasingly competitive market Brunel has in recent years been successful in maintaining its market share. However changes in the business environment mean that this may be difficult to sustain. Car manufacturers, who are Brunel’ customers are themselves operating in an increasingly competitive and global market and are passing these pressures down to their suppliers. Order times are getting progressively shorter, contract prices lower and quality standards higher. Furthermore, decreasing transport costs mean that the manufacturers are prepared to look further afield for their parts, particularly to the newly opened up economies of Eastern Europe. In short, Brunel will have to run faster just to stand still.

 Achieving this might prove to be difficult. Brunel have a rather old fashioned small plant and have little available capital to fund a move to a purpose-built factory. Machinery and technological systems are functional, but hardly state of the art. There is little scope for acquiring raw materials more cheaply, and overheads are rising above the rate of inflation. The workforce are regarded as loyal and committed by the senior managers, who have no complaints about the hard work that everyone puts in. Essentially Brunel’s directors find it difficult to see where they can make significant improvements.

As a LSBU HR student, you were visiting the plant on another matter and suggested in passing that attention to people issues might be one way of adding value. Brunel’s directors were receptive to this idea in principle but were at a loss to see what they could do in practice. They were happy with their staff who were working hard towards company objectives. It was true that occasionally the company accepted orders that it was very difficult or impossible for the existing staff to deliver, but Brunel’s accepted that it wasn’t really the staffs ‘fault’. The chief executive, Andy Brunel, was fond of saying that he wouldn’t swap his workers for anyone else’s. Nevertheless, Brunel decided to employ two CIPD-qualified HR managers on a project basis to have a look at this aspect. The first, Caroline O’Kane, was asked to look at the issues relating to the way people worked that might hinder the ability of the company to ‘deliver’ in the new climate. The second, Oki Adeyemi, was simply asked to report on the existing HR policies, such as they were, that were operating in the plant.

O’Kane reported that the ability to process orders quickly was hindered by a lack of flexibility on the shop floor. Staff very rarely moved between press machines, finishing machines and assembly machines, even though the demand for each varied depending on the stage of the order. As a result, some people were under-worked while others were over-burdened. This slowed things down and affected quality. This was due to the fact that when people were recruited to a particular department they tended not to move, partly because they did not have the skills to move from one job to another, and partly because it simply wasn’t expected of them; besides which there was very little incentive to do so. These problems became particularly acute given the high level of absence, running at 9 per cent averaged across the company. O’Kane found that managers maintained fairly close control over their departments, taking responsibility for decision making themselves. There was very little staff involvement, which O’Kane found puzzling, as the people she spoke to on the shopfioor seemed to have pretty clear ideas about how things could be improved. A third problem was the rapid turnover of the key technical and managerial staff, which is running at 35-40 per cent. These skills are in short supply in the local market. Not only do Brunel’s struggle in competing for them they find it difficult to retain them — they are often poached by competitors offering better terms and conditions.

 

Adeyemi found that the approach to the management of people at Brunel was largely unsophisticated. Departmental managers looked after these issues in their own way for their own staff. There was no one on the board of directors with overall responsibility for HR. although there was a personnel officer at junior management level dealing mainly with recruitment and pay administration. Turning to specific areas of HR policy, she found, for example, that there was no form of incentive pay. Individual production bonuses had fallen out of favour in the 1970s and nothing had replaced them. Performance was managed only in the sense that people were disciplined when they fell short of the required standards. Brunel were, to be fair, eager to train their workforce and substantial budgets were allocated to departmental managers, and staff were regularly dispatched on training courses when something relevant came up. Adeyemi found that recruitment was often achieved by word of mouth, and where selection procedures were employed they tended to be based around an informal interview and references. Finally, she found that 25 per cent of employees were members of the Unite, which the company recognised. Relations with the union were fair, but the union did little more than collectively negotiate the annual pay rise and deal with discipline and grievance issues as they arose.

 

Assignment tasks (

Carry out a survey of Brunel in terms of its current strategy in relation to its external and competitive environment, commenting on what may restrain and assist any proposed changes to the organization.

 Identify three major HRM practices that could have an effect on the future success of Brunel and how these might be developed or changed.

 What specific recommendations would you make for these three practices and how they support one another to achieve success for Brunel?

 

The Case of Brunel Engine Components

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