Peter Hanson: Building a World Class Product Development Centre for Hi-Tech Systems in China.

PETER HANSON: BUILDING A WORLD CLASS PRODUCT DEVELOPMENT CENTRE FOR HI-TECH SYSTEMS IN CHINA

A Case Analysis

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Presented to

The Faculty of Graduate School

Cor Jesu College

Digos City

In partial fulfilment of the Requirements for the Degree of

Master in Business Administration

Presented by:

Jemma Pearl R. Abasolo

Iza Mae Gomia

Remjune L. Maglupay

Maria Azel G. Manog

Kristel Joy Yamomo

PETER HANSON: BUILDING A WORLD CLASS PRODUCT DEVELOPMENT CENTRE FOR HI-TECH SYSTEMS IN CHINA

EXECUTIVE SUMMARY

This case presents the vision of Peter Hanson, US Citizen, the Head of the Product Development Centre (PDC) of Hi Tech Systems in Shanghai, which was to create a world-class PDC in Shanghai, a country that mainly was a recipient of technological know-how from abroad, and what measures should be taken to convince other parts of Hi Tech Systems to engage in joint development projects with his PDC?

More specifically, it covers the phenomenon of employee resistance to long-term staying (at least 3 years). The case also expresses issues in looking for people who are capable of doing what Hi Tech Systems is doing successfully, establishing own policy for PDC in Shanghai, and the key issue in retaining employee especially the valued one.

The analysis represented provides establishing training and development to employee and Systematic approach to recruitment and selection and the right kind of guiding hand can maximize output and reach goals individually and for the organization and the needs to provide a high return on the business’s investment. This case needs to be addressed well, thus, careful analysis of how to effectively manage human resources of PDC in China despite the cultural difference and by taking all considerations and critical decision making to arrive at the best possible action to be done.

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TABLE OF CONTENTS

                                                                                        Page

Title Page …………………………………………………………………………....        i

Executive Summary ………………………………………………………………...        ii

List of Tables ……………………………………………………………………….        iii

Background of the Study (Issues and Concerns) …………………………………...        1

Statement of the Problem ……………………………………………………………        2

Point of View ……………………………………………………………………….        2

Objectives …………………………………………………………………………..        2

Areas of Consideration ……………………………………………………………..        3

Alternative Course of Action ……………………………………………………….        3

        Alternative no. 1: Provide Training and Development...................        3

        Alternative no. 2: .......        5        

Recommendation ……………………………………………………………………        9

Plan of Action ……………………………………………………………………….        10

References …………………………………………………………………………..        12

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1. BACKGROUND: ISSUES AND CONCERNS

Human Resource is the backbone of organizations the world over and undoubtedly the most important resource. According to Yamamoto (2011), when strategically placed they can provide innovative solutions and ensure that organizations achieve competitive advantage from other organization. However, because of globalization, economic growth and shortage of labor, many organizations are finding it difficult to retain high performing employee.

Hi-Tech system is a Swedish company based in Stockholm, Sweden. Established in 1976 and later expanded its business globally in 1992, the company established a representative office in Shanghai and in the later years, created several subsidiaries in China. Hi Tech Systems has traditionally done most of its product creation in Sweden, and because to the growth of Hi Tech Systems there are not enough engineering students in the whole country to satisfy its needs and Hi Tech Systems considered that products need to be locally adapted so that it will be easier to carry out locally than in a distant PDC. China had become one of Hi Tech Systems most important markets.

In 2000, Product Development Center was established in Shanghai to expand Hi Tech Systems business opportunities because product development was seen to be the key to the success on Hi Tech Systems. Hi Tech Systems has Product Development Centers in Sweden, UK, US, Japan and HK.  Peter Hanson was chosen to head the PDC in Shanghai. He was the first person to arrive in China when Hi Tech Systems decided to established PDC. Peter Hanson envisioned that PDC in Shanghai will grow significantly over the next year. A full-grown PDC has 4-500 employees, a variety of competencies and is expected to have the capability needed to develop an entire new product. PDC Shanghai would be responsible for product creation in the Chinese language area, including Mainland China, Hong Kong, Singapore and Taiwan.

The case has found to have several key issues. When it became clear that the PDC would be established, Peter Hanson started to look for people. The issues of the case are; first, there was no established policy for people management within the global product creation organization of Hi Tech Systems. This leads to Peter’s reliance to the HR department at Hi Tech Systems group on China for support. Second, competence development would probably be the key to the success of the PDC both in terms of localizing its operations and in producing good results.