Your role - You are a consultant that specialises in the Human Resource aspects of developing an international business focus and have been approached by Winch-It Industries Pty. Ltd to assist in analysing and, where appropriate, developing a plan to assist the company in expanding overseas. While the Board of this company is open other ideas, they are set on a direction of international expansion. However, the Board wants to adopt a cautious approach until they have a sound understanding of all the issues, including the H.R. aspects of international operations. THE SCENARIO Manufacturingin Australia It is generally acknowledged that manufacturing in the Western world, especially countries like Australia with a small base of clients and population, are having to compete on terrain that is increasingly difficult – the so called 'level playing field'. Globalisation, including the movement of vast amounts of manufacturing, from a previously robust economy, to other countries has created a broad range of difficulties for existing and intending manufacturers . Difficulties often experienced are in maintaining existing markets and products or in establishing new areas of opportunity. The state of manufacturing Faced with increasing pressures from costs, predatory practices of other manufacturers, the incessant pressure created by the 'off shoring' processes associated with globalisation and ever expanding demands by consumers for increased quality with lower pricing, many existing manufacturers are forced to either join this outward flow of manufacturing processes or become far more adept at surviving in their existing markets and in establishing new markets and outlets for their products. Cost pressures on raw materials, labour, skills shortages and a small and limited local market make it difficult for the managements of manufacturing organisations to create and maintain returns on investor capital. Management must also consider shareholder concerns as to the continued risks associated with on-going investment in local manufacturing. Consequently, many organisations have shifted their manufacturing processes 'off shore', to provide products to the market at considerably lower purchase prices than local manufacturers. Some organisations have experienced initial reduced quality problems by going 'offshore', however many organisations have been able to eventually overcome this problem. Your client Winch-It Industries Pty. Ltd. started out in the light manufacturing indu stry in Western Australia when two brothers, both mechanical engineers, decided to produce inexpensive and efficient hand powered winches for recreatio nal boating and professional fishermen during the Second World War. This need came about due to Australia's isolation from the rest of the world and the total lack of imported products. Wartime scarcity added to the problems. The brothers' design was simple and effective, using locally made materials as the source of parts and a small market niche was established. This was further aided by a number of small defence contracts to supply winches to the Navy, giving the venture a special supplier status, a relationship that would prove vital in the coming decades. Arising from the general prosperity of the post-war years, the brothers saw a continuing future for their products – this lead to the establishment of Winch-It Industries. And while the initial base in recreational and small boat requirements was established as the foundation of Winch-It manufacturing philosophy, market opportunities presented by the Cold War period where there was an intense local defence industry served to tempt Winch-It into the design of a much larger range of models with differing specifications to meet exhaustive military design rules and strict specifications to meet the needs of a much larger range of winch uses. This period saw extensive expansion of the organisation with increased manufacturing and design facilities to meet expanding demand, both military and domestic! The steady rise in recreational boating throughout the 60's and on into the 00's ensured an expanding market and the appointment by many boat trailer manufacturers of Winch-It as an OEM supplier (Original Equipment Manufacturer. This gave the organisation a credibility it had earned over the years and an expanded reputation for rugged reliability, excellent design and operational functionality. Also, throughout this period, a number of successful contracts were negotiated with various defence force departments, preeminently the Navy where the capacity of Winch-It to design and manufacture winches to demanding specifications was seen as one of the company's many value-adding capabilities. Many recreational and professional boat users felt they had a 'Navy quality' winch bolted to their 'humble tinnie' (aluminium runabout). The company reputation for quality and innovation had been hard won, but acknowledged as 'the' industry standard. Winch-It has over 200 employees working in its West Australian plant at Highgate. For the last 18 months, the original owners had wrestled with where to take the company in its future direction. This culminated with a decision to public ly float the company to raise the necessary capital to expand their operations. The share offer was over-subscribed, with many investors taking large parcels of shares. This, in turn, led to the creation of a Board of Directors whose principal task was to set the future direction for Winch-It. The Board has decided on seeking external consultant advice to guide Winch-It through the feasibility study of international operations. They are uncertain what this might mean – will it be manufacturing, sales, or some other type of organisational structure? The Board is confident Winch-It has the capacity (and the money) to consider a range of options. In reality, the company is faced with a narrow range of choice – either expanding to include overseas markets or stick with local markets. In turn, there remains the further issue of where manufacturing should take place, locally, overseas or a mix of both. While opting to 'go international', the company is mindful that it lacks any experience in establishing any form of overseas operation and, accordingly, has sought assistance in this feasibility phase of options to promote discussion at Board level. The general 'feeling' of the Board is that the company's future is strongly linked to expanding overseas. Additionally, the Board is divided on whether sending 'one of their own' senior managers to lead the possible overseas business would be the best choice. Specifically, there are several areas where the Board needs some direction via the advice you can provide. For simplicity, they have broken this down into several areas of interest that require your specific attention and ideas. THE PORTFOLIO TASK The task for you as a consultant is set out in the four areas of concern to be addressed (see below). You are required to produce a report for the Board that covers all of the four areas of concern. Further to this, the Board is more than willing to accept findings that may have not been considered in the four areas of concern. This means they are paying you to provide critical analysis of their situation and workable recommendations. Remember, you must also follow the guidelines regarding the necessary inclusions in your Portfolio Report as described earlier, such as including an Executive Summary, Introduction et c. Remember also, the Board is your client and is the decider of the usefulness of your Portfolio Report. This will help them decided whether they will engage you for future projects. You must consider the following four issues in your Portfolio: The organisational context What type of organisational structure for overseas operations would you recommend Winch-It adopt and why? The staffing context Winch-It has some interest in sending one of 'their people' overseas to run the new business. What staffing option/s would you recommend and why? Recruitment and selection Winch-It recognises that 'Recruiting and Selecting' the right person to manage the new overseas venture is crucial for overall success. What does Winch-It need to do in ensuring effective Recruitment and Selection? International compensation Winch-It is particularly concerned about some of the salaries being paid by other organisations to their overseas employees. What pay and reward strategies should be adopted and why?  Note: Students should describe any perceived problems and issues as well as advantages with the recommendations made regarding the above four issues.