Reference no: EM133169069

Paul Jones Ltd.

Paul Jones Ltd. provides a range of top designer clothes and accessories for both male and female customers. Founded in Nottingham in 1968 it has grown from its small beginnings to have an established reputation in many major fashion cities of the world including London, Milan, New York, Sydney and a particularly strong presence in Tokyo. Two years ago a retail outlet was opened in Paris after much reflection on the difficulties that French labour legislation caused, especially around issues of using part-time and temporary employees. However the business case for a presence in Paris outweighed the HR issues and concerns.

THE MARKET

The Paul Jones image is becoming a truly leading global brand and the company continue to make "healthy profits" despite the economic problems afflicting the world at present. This is seen to be due to the niche of exclusivity the brand has developed and the company continue to look for further development opportunities. Of particular interest to the company is a proposed expansion into the developing markets in the Nordic and the Baltic regions with a recent and very successful opening in Helsinki although little was known of the specialist labour market required to promote and sell top designer products in Paul Jones' niche markets.

The success in Helsinki has given the company some encouragement to open a shop in Latvia starting with Riga and possibly followed by outlets in Estonia, and Lithuania where there is an increased awareness of fashion amongst the affluent which would enable the company to make big profits. However although some ideal locations for a major retail outlet have been identified, little is known of the labour market nationally and locally in these potential countries. Typically the company would have four or five outlets in the major cities within each of the countries it operates in as well as regional manufacturing and warehousing sites: for example the U.K has retail outlets in London, Manchester, Birmingham, Edinburgh, and Nottingham with a manufacturing factory in Nottingham. There are some country variations in the company policy of manufacturing "in company" with some outsourcing conducted in Japan. However most of the manufacturing is done "in company" to ensure critical quality standards are adhered to.

STAFFING

All employees of Paul Jones from the CEO, Regional Directors through to the warehouse manual staff are expected to embrace the key organisational values especially the concept of being true innovators in fashion and associated products. A critical requirement is for the employees with direct contact with the customers to offer "exceptional customer service". This has certainly been a problem to achieve in a number of the "new markets" and has been expressed as a concern for entry into some markets by a number of the Head Office Management Team. The company are keen to ensure the ethos of "think global act local" is applied in its international operations. This is particularly relevant in an organisation that prides itself in having an innovative and creative culture. To this extent the example set by the management is vital to create the desired organisational culture.

The staffing structure is typically under the control of a Regional Director supported by a country HR Manager. Until recently, these appointments have invariably been expatriate staff from the UK, although there has been concern expressed recently that a number of the country HR managers have struggled to understand the local culture and its impact on such issues as management style

and employee behaviours. This is a real concern to Head Office as all countries are given a large degree of autonomy in their operations provided they meet required sales and profit targets. The company has taken a decision to recruit Regional Directors and HR managers within the host country but currently there is a real pressure on the availability and suitability of these people, particularly as there is limited precedence in some countries for people with the requisite knowledge of high-end fashion retailing.

As regards the selection of shop managers, this also tends to be done through local recruitment as are the sales assistants and manufacturing and warehouse operatives. There are variable levels of satisfaction amongst this group as many regard promotion opportunities to be very limited. In most of the new openings there is a tremendous demand from young well qualified applicants who want the opportunity to work in the fashion industry for a "world leader".

The company generally pays above the norm for similar fashion houses and most staff find the 50% staff discount a very attractive feature of the rewards system (eligibility is after 6 months service). The hours for all staff are long and there is little concern regarding any trade union involvement and reaction to the hours apart from in the operations in France. This means that gaining harmonisation of terms and conditions across the global operations of Paul Jones is "difficult". There is little known of the likely employment relations scenario in some regions although assumptions are being made that the company are likely to operate with little union "interference".

There is increasing enthusiasm for the company moving into new markets especially those that appear to be "doing well" economically and have a real interest in fashion. There is some nervousness about these proposed openings across the Baltics and Nordic regions, however the Director of Marketing and Sales has presented a very persuasive case which is supported by The Finance and Operations Directors.

As HR Director, you are becoming increasingly concerned about the HR issues that need addressing and integrating into the overall growth strategy of Paul Jones Ltd.

You have been asked to investigate the current state of the industry and some of the critical external/internal factors which the company should consider as it makes its business plans for the next five years.