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Review the SHRM case, “PAC Resources, Inc.”Prepare a 4–6-page case analysis on the topic of strategic management and why it is critical to the success of an organization in meeting its goals and mission. In your analysis, respond to the following question: What is strategic management and why is it critical to the success of an organization in meeting its goals and mission? Your analysis of this case and your written submission should reflect an understanding of the critical issues of the case, integrating the material covered in the text, and present concise and well-reasoned justifications for the stance that you take. Case analysis criteria: Your case analysis should consist of:A brief analysis of the situation and pending decision problem, as presented in the case, and as relevant to your answer. This should be exceptionally brief and you should assume the person reading the Assignment is familiar with the details of the case.Identification of the major issues surrounding the organization or individuals involved with the organization.Identification of alternate courses of action to address the issues identified.The decision or recommendation for action, with the appropriate supporting arguments.The case question is designed to guide the direction of your analysis in the case. Your analysis should address and ultimately answer the question.You may discuss your case analysis Assignment with the class, but you must submit your own original work. Case analysis tips: Avoid common errors in case analyses, such as: Focusing too heavily on minor issues.Lamenting because of insufficient data in the case and ignoring creative alternatives.Rehashing of case data — you should assume the reader knows the case.Not appropriately evaluating the quality of the case’s data.Obscuring the quantitative analysis or making it difficult to understand. Typical “minus (–)” grades result from submissions that: Are late.Are not well integrated and lack clarity.Do not address timing issues.Do not recognize the cost implications or are not practical.Get carried away with personal biases and are not pertinent to the key issues.Are not thoroughly proofread and corrected. Make sure your document includes: Your name Date Course name and section number Unit number Case name Page numbersThe case analysis should be a minimum of 4–6 pages long, double spaced. Check for correct spelling, grammar, punctuation, mechanics, and usage. Citations should be in APA style.


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Student Workbook
PAC Resources, Inc.:
A Case Study in HR Practices
By Myrna L. Gusdorf, MBA, SPHR
This case study has been adapted from the
original version of the case study found at The submission instruction is
the portion that has been adapted.
Project team
Myrna L. Gusdorf, MBA, SPHR
SHRM project contributor:
Bill Schaefer, SPHR, CEBS
Copy editing:
Katya Scanlan, copy editor
External contributor:
Sharon H. Leonard
Jihee Lombardi, senior design specialist
© 2011 Society for Human Resource Management. Myrna L. Gusdorf, MBA, SPHR
For more information, please contact:
SHRM Academic Initiatives
1800 Duke Street, Alexandria, VA 22314, USA
Phone: (800) 283-7476 Fax: (703) 535-6432
Case Overview
Although PAC Resources is a fictional organization, it experiences many of the
difficulties common in today’s business climate. In response to declining sales, PAC
Resources must transform itself from a strategy of expansion and high profit to one
of cost containment and staff reductions.
The case is presented in two parts. Part I lays the groundwork for the case, with
discussion of the organization and details of the human resource department. Part
II is presented in e-mails from various staff members. The e-mails identify specific
problems that need to be addressed by the HR department and give the reader an
understanding of PAC’s overall culture.
In this case, you will:
1. Recognize the link between organization strategy and human resource activities.
2. Conduct a SWOT analysis of the organization with emphasis on the HR
3. Indentify problem areas in each of these five functional areas of HR Management:
Human resource development.
Safety and security.
Compensation and benefits.
Employee relations.
© 2011 Society for Human Resource Management. Myrna L. gusdorf, MBA, SPHR 1
4. Design solutions to the strategic problems identified in the five functional HR
5. Develop solutions to the policy and people management problems identified in
the e-mails.
6. Present their solutions of the issues involved in their assigned functional area of
Working through the case
This case requires you to decipher the problems at PAC Resources and then suggest
solutions for the organization. As an HR professional, you must recognize the
interrelationship of organizational issues and HR activities. In the case of
PAC Resources, you will address the strategic challenges facing the organization
while concurrently resolving issues within the HR department and managing the
dilemmas of individual managers and staff.
2 © 2011 Society for Human Resource Management. Myrna L. gusdorf, MBA, SPHR
PAC Resources, Inc.:
A Case Study in HR Practices
The organization
PAC Resources is a small manufacturing company located in a mid-sized city in
the upper Midwest. PAC manufactures high-quality specialty components for
the computer industry. The company was founded in 2004 by current CEO,
David Dukakis. Dukakis was a talented young engineer in Silicon Valley. When
the industry hit the skids in the early 2000’s, he found himself out the door with
little more than an entrepreneurial spirit and a small severance package. Dukakis
left California, moved back to his home state and used his severance package to
finance PAC Resources, starting the company in small rented quarters in a
nearly vacant strip mall. He brought in Cliff McNamara early on as chief financial
Dukakis was smart enough to know that he had no head for figures, but McNamara
did. McNamara was an old college buddy, a super accounting wiz, and somebody
Dukakis could trust to squeeze as much mileage as possible out of his severance
money. It was a good match. McNamara managed the business, and Dukakis was
the idea man and designer of the specialty components, patents of which were the
backbone of PAC’s success. Today, the low-rent strip mall is a part of company
history, and PAC employs 835 full-time workers in its own contemporary facility
built in 2012.
So far, PAC has not been significantly affected by the latest downturn in the
industry. Its market niche continues to be high-quality, specialized equipment.
The company is proud that its products continue to be made in the United States
and of its ISO quality certification granted by the International Organization for
Standardization. Dukakis believes this is what has kept his company in business
while others in the industry shipped jobs offshore or went by the wayside.
PAC sells its own products and has a small customer base scattered throughout the
United States and Asia, but this generates only a small percentage of PAC’s
revenue. Eighty-three percent of PAC’s sales come from building original specialty
components for one manufacturer. This has been a steady income source for PAC,
but heavy reliance on one customer is a significant source of worry for PAC’s
management team, especially because sales of finished products are down for this
customer and cutbacks are expected. If the rumor proves true, PAC will not escape
unscathed. Consequently, the push is on for belt-tightening in the organization.
PAC instituted a hiring freeze, and marketing and sales budgets were directed
to increasing the company customer base. Canadian and European markets are
being explored, and while there is some interest, there are no solid contracts. PAC
employees are understandably jittery.
© 2011 Society for Human Resource Management. Myrna L. gusdorf, MBA, SPHR 3
Though PAC remains non-union, three years ago the organization went through
a difficult period of employee unrest. There were complaints of poor management,
inconsistently enforced policies and unfair practices regarding job changes and
movement of employees within the organization. Because of the company’s standing
as a respected employer in the community, it was significant public relations
black eye when an anonymous employee wrote a scathing letter to the editor of
the local paper. This brought in union organizers who distributed leaflets and
circulated authorization cards. To address employee concerns, PAC responded with
management training and reorganization of lower-level supervisory positions. A
companywide “Talk-to-the-Boss” program was implemented, allowing employees to
bring issues to any level of management without fear of reprisal. It seemed to help.
The authorization cards failed to generate enough interest for an election, and things
settled down. Unrest, though, never goes away entirely. Employees became cynical
about “Talk-to-the-Boss,” and “the union buzzards”, as Dukakis calls them, never
completely went away.
Things have certainly changed for PAC from the old days of the store-front location
and a handful of employees. Dukakis remains the CEO, but he no longer manages
the day-to-day operations, spending his time instead at his family’s summer
retreat on the Maine coast or in the Caribbean during the winter months. Decisionmaking is primarily in the hands of McNamara, who is now the organization’s
senior vice president, and a second vice president, Mark Schilling. Schilling came
to PAC eight years ago with an honors degree in human resources and a successful
military career.
With a history that has known only growth and strong revenue, it will be a major
culture change for PAC to respond to the eroding economy and a possible decline
in sales. In addition to the hiring freeze, McNamara directed managers to cut waste
and improve productivity across the board. Employees were reminded that every
department would be affected and that nothing was sacred.
The Human Resources Department
Patricia Harris was HR director at PAC for eight years before her departure in 2014.
The official word was that she had taken early retirement to spend more time with
her family, but what everyone really believed was that Schilling finally got fed up and
gave her the boot. Of course, there was the official retirement party where everyone
said how much they would miss her, but really, most employees in the department
raised a toast to her departure and gave a collective sigh of relief. Her management
style—when she managed at all—was divisive. She had her favorites, especially
Kathy Davis, PAC’s benefits coordinator, for whom no perks were ever too many.
Consequently, the compensation and benefits staff fared well under Harris because it
was Davis’s area. Other employees in the HR department found Harris to be unfair
and abrasive even on the best ofdays.
With approval from McNamara and Schilling, Harris and compensation manager,
John Culbertson, had established a merit bonus plan early in Harris’s tenure at PAC.
Though Harris continued to champion the bonus plan as a success in accomplishing
4 © 2011 Society for Human Resource Management. Myrna L. gusdorf, MBA, SPHR
objectives and controlling costs, it has been a bone of contention across the
organization, particularly in the HR department. The bonus plan required everyone
to have annual performance goals. Harris allowed Culbertson’s compensation and
benefits staff to set their own goals, but for everyone else in the department, Harris
alone set the goals with no input from those expected to carry out the activities.
The result was hard feelings and perceived inequity that continues today. There
is grumbling that even with Harris’s departure, things never changed. Davis still
off loads most of her work on others and is never dependable for project completion,
yet she and her staff members receive top-tier bonuses year after year. Even
Culbertson seems to look the other way. Other HR department employees feel their
work is not supported by management and that there is little feedback on progress
toward goals. For them, bonuses, if paid at all, are based on unknowns controlled
arbitrarily by Culbertson. As a result, the HR department is rife with animosity
and there is little cooperation across functional areas. Certainly things couldn’t get
When Harris retired, Schilling promoted Ben Trudeau, manager of safety and
security, into the director’s position, even though he had only been with PAC for
a year before his promotion. Though Trudeau had reported directly to Harris, his
good track record at safety and security kept him below the radar of many
of the problems in the HR department. As manager of safety and security, he
focused primarily on increasing wellness activities. Establishing an active wellness
team across the organization, he became the most visible member of the HR
department, and with his positive upbeat attitude, many employees thought of him
as the organization’s “cheerleader.” Best of all, his management style was the polar
opposite of Harris’s. Where she micromanaged and criticized, Trudeau believed in
encouragement and responsibility. Schilling thought Trudeau would bring a breath
of fresh air to the HR department, and he gave Trudeau free reign to make the
changes necessary to turn the department around.
When Trudeau moved into Harris’s old office, he set a big jar of candy on the desk and
invited everyone to stop by and chat with him whenever they wanted. Of course,
Davis was first in the door.
© 2011 Society for Human Resource Management. Myrna L. gusdorf, MBA, SPHR 5
Pac resources, Inc.
David Dukakis
Human Resource
Vice Pres.
Sr. Vice Pres.
Mark Schilling
Cliff McNamara
Human Resources
and Benefits
Sales and
Safety and
Ben Trudeau
HR Director: Ben Trudeau
HRD Manager: Kellie Stephens
Compensation and Benefits Manager: John Culbertson
Benefits Coordinator: Kathy Davis
Staffing Manager: Kim Wong
Safety and Security Manager: Jose Vasquez
Employee Relations Manager: Steve Wilson
Human Resource Development
The HRD division is managed by training director Kellie Stephens, who supervises
two other employees: a trainer and an administrative assistant, who coordinate the
logistics of PAC’s training programs. Recognizing the continuous dynamics of the
high-tech industry, PAC has been a strong supporter of employee development.
With approval of the immediate supervisor, PAC encourages employees to attend
training seminars, and tuition reimbursement is available for college-level courses
that are related to the employee’s job. In-house training is conducted regularly to
ensure all employees are up-to-date on sexual harassment and safety procedures.
Other training is made available as the need arises. Whenever possible, training
programs are developed and facilitated by in-house staff members. When that is not
practicable, a request for proposal is generated and PAC hires outside facilitators.
Since the labor problem a few years back, Stephens aggressively trained management
employees with particular emphasis on skills for first-line supervisors. She wants
to see improvement in people skills and consistent implementation of PAC policies
across department lines. Unfortunately, her efforts are not universally well received.
Some managers grumble that HR just gets in the way and ties their hands when
dealing with difficult employees. All too often Stephens hears managers say that
there is the “classroom way” and the “shop floor way.” She sees training for PAC
managers as an ongoing process.
6 © 2011 Society for Human Resource Management. Myrna L. gusdorf, MBA, SPHR
Last year’s strategic planning process identified knowledge management as an area
for organization wide improvement. PAC has a history of employees working in silos,
with little communication across functions. Hoping to bridge the gap and encourage
collaborative exchange, Stephens established “communities of practice,” where
individuals could meet to problem solve and exchange ideas. Her first community-ofpractice group consisted of individuals from research and development, engineering
and production. A number of other communities have since been established. More
informally, Stephens encourages “snack and chat” meetings on Friday afternoons,
where employees can drop by for a snack and talk about their work.
To increase information exchange with employees working off-site, an idea blog
was added to the company’s intranet, where staff could share information about
their successes and failures on various projects. At first, people were reluctant to
comment, and it took some time before they were willing to share their knowledge
and ideas. Stephens had not anticipated how proprietary some individuals would be
about their work methods. Progress has been made; with increasing postings, the
blog is becoming a source of ideas and information sharing. To manage the volume
of information generated by the blog and to make it easier for more employees to
use the system, Stephens submitted in a budget request to add enhanced knowledge
software to the intranet.
To capture knowledge that might be leaving the organization, Stephens worked
with Steve Wilson to improve the exit interview process. Departing employees are
encouraged to talk informally about their career at PAC and to pass on information
other employees need to know. There has been some success here, but as expected,
not all exit interviews generate a positive exchange.
As part of the recent directives to “tighten up” for increased results, HRD was asked
to update and improve the company’s performance management system. In addition,
the organization is looking closely at all training expenses, and Stephens was asked
to identify the return on investment for all programs. She is worried about her
management training program and feels certain that tuition reimbursement will fall
under the ax.
Safety and Security
With Trudeau’s promotion to HR director, management of safety and security fell
to his assistant, Jose Vasquez. Vasquez is a recent college graduate with a degree in
ergonomics. He came to PAC as an intern during his senior year of college. Trudeau
was impressed with Vasquez’s attitude and enthusiasm and hired him right after
graduation. Vasquez worked with Trudeau on wellness activities and conducted
safety training, but his real forté is his ongoing ergonomics audit. PAC has had high
instances of workers’ compensation claims, particularly carpal tunnel syndrome
claims, and Vasquez expects that his emphasis on ergonomics will help alleviate
the problem. His goal is to check every workstation in the organization and either
approve or recommend ergonomic changes. He has developed an elaborate database
to track the project.
© 2011 Society for Human Resource Management. Myrna L. gusdorf, MBA, SPHR 7
Besides ergonomics, PAC has an active wellness program. In partnership with a local
hospital, PAC conducts an annual on-site health fair providing employees with free
immunizations and voluntary health-risk assessments. Since maintaining a healthy
weight and not smoking are especially important, PAC reimburses employees for
50 percent of the cost of weight loss and smoking cessation programs. PAC also
maintains an employee assistance program.
Schilling asked Vasquez to take on a greater role in risk management. Schilling is
concerned about the increasing rate of workers’ compensation claims and asked
Vasquez to conduct a job-hazards analysis and report the results to him, identifying
which jobs, departments and people are most likely to incur a workers’ compensation
claim. From that information, it is expected that Vasquez will work with the finance
department to develop a cost-saving risk allocation plan.
Unfortunately, the ergonomics audit is so involved that Vasquez is seldom available
for anything else. He is either out in production checking workstations or mired in
spreadsheet tracking. He created an extensive spreadsheet to track the results of the
hazard analysis that Schilling asked for, but so far, little else has been done and the
completed analysis was due on Shilling’s desk lastFriday.
With his short tenure at PAC and his focus on ergonomics, Vasquez seems illprepared to manage the entire safety department. Trudeau knew this when
he promoted Vasquez, but with the hiring freeze, he couldn’t go outside the
organization, and there was no one else with the safety background needed for the
position. Trudeau felt sure that if he worked closely with Vasquez, he could keep
safety and security on the right track.
Kim Wong has managed staffing at PAC since the early years when the company
had less than 100 employees. Wong runs a tight ship and manages the department
with only one other recruiter and an administrative assistant, who maintains all job
postings, including a telephone employment hotline and the company’s job line
web site. Wong is well-respected across the organization for his strict adherence to
ensuring equity in hiring and job placement that goes well beyond equal opportunity
Wong recently completed an aggressive hiring drive at major universities, hiring
several new engineers and CAD specialists. These new hires barely squeaked in
before the hiring freeze, but with the downturn in sales, the atmosphere has
changed dramatically. The staffing department has known only hiring; they never
had to plan for a layoff. Wong worries that a layoff of newly hired employees will
seriously harm the company’s reputation in the community and make recruiting
difficult when the economy gets better.
Wong received a confidential memo from Schilling and Trudeau requiring a 10
percent reduction in labor costs by the end of the fiscal year. He wonders if there
is some way to cut labor expenses while saving as many jobs as possible. He also
8 © 2011 Society for Human Resource Management. Myrna L. gusdorf, MBA, SPHR
worries about the loss of talent and retaining the knowledge of long-time employees.
He’s got some cost-s …
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