Hanover Public Systems faces critical issues at its Taiwan plant due to decreasing sales, employee discontent, and cultural clashes with the new president, James Fukuda. Fukuda's individualistic Western management style does not consider Taiwanese culture or consult employees. This has led to resignations, low morale, and financial losses. Several solutions are proposed: maintain the status quo; slow down changes; replace Fukuda; or close the plant, each with benefits and drawbacks to consider.

1. HANOVER PUBLIC SYSTEMS
Bérénice ANDRE
Charles DAY
GROUP 308

2. SUMMARY
I. OVERVIEW
II. BUSINESS FACTORS
III. STATEMENT
IV. DIFFERENT SOLUTIONS PROPOSED
V. CLASS DISCUSSION
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3. I. OVERVIEW
1. Company’s Presentation
Hanover Public System (HPS)
• American Manufacturer of Industrial Electrical Equipment
(elevators, lighting system, heating and cooling equipment
and industrial fans)
• Important Dates :
 1960 : Beginning of foreign manufacturing
 1996 : Decline and money loss in Taiwan
OVERVIEW BIZ FACTORS STATEMENT SOLUTIONS CLASS RECO.

4. Hanover Public System (HPS)
• 8 wholly owned subsidiaries around
the world
+
• 4 large domestic Plants
 The company have good financial
results except… in Taiwan.
OVERVIEW BIZ FACTORS STATEMENT SOLUTIONS CLASS RECO.
I. OVERVIEW
1. Company’s Presentation

5. Context :
• Based in the city Taipei
(Taiwan)
• Infusion of 3 million US $
from the parent
company
Still Bad
Performance, loss of
money
Consequences :
• Yang Hsiao-
Shih, President of Taipei
Plant was fired
• James Fukuda became
OVERVIEW BIZ FACTORS STATEMENT SOLUTIONS CLASS RECO.
I. OVERVIEW
2. Taiwan’s Case

6. • Howard Wolff: HPS President
• Yang Hsiao-shih: Previous Taiwan Plant President
(Terminated)
• James Fukuda: New Taiwan Plant President (Second
generation Japanese-American)
• M. Lo: Finance Director (Taiwan)
• T. Hu: Vice-President of Operations (Taiwan)
• H. Lee: Superintendent of Manufacturing (Taiwan)
OVERVIEW BIZ FACTORS STATEMENT SOLUTIONS CLASS RECO.
I. OVERVIEW
2. Main Participants
a. Different Participants

7. I. OVERVIEW
3. Main Participants
b. James Fukuda
• Nationality : Japanese-American
• Age : 38 years old
• Experience : Ex Vice-President of the
Operations at the Oakland California
• Characteristic : Seen as a Brillant
Manager
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8. I. OVERVIEW
3. Main Participants
b. James Fukuda
Actions :
Before Arriving :
Throw out useless stocks in order to offset liabilities
+1 Week :
Shut down the heating and cooling manufacturing
equipment
Lay-off 18 workers and 12 reassignment
+1 Month :
Reorganization of the management
OVERVIEW BIZ FACTORS STATEMENT SOLUTIONS CLASS RECO.

9. I. OVERVIEW
3. Main Participants
b. James Fukuda
Consequences of M. Fukuda’s actions :
• Vice-President, M. Hu resignation
• Middle and Upper Level Managers sent a letter
to the President M. Wolff
• M. Wolff starts wondering and doubting about Mr
Fukuda
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10. I. OVERVIEW
4. Exhibits
a. Dialogue
OVERVIEW BIZ FACTORS STATEMENT SOLUTIONS CLASS RECO.

11. I. OVERVIEW
4. Exhibits
a. Dialogue
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12. I. OVERVIEW
4. Exhibits
b. Exhibit 1 : Letter from M. Lo (Finance
Director) to M. Wolff (President)
complaining about M. Fukuda
1. Shut down the manufacturing of heat
and cooling equipment due to very low
prices set by competitors which are
mainly Japanese
2. Unwise Reorganization Plan :
- Sales were by equipment, M.
Fukuda wants them in one division.
- Pressure exerced on
employees who aren’t sure about there
future in the company
- Creation of a plan without
consulting
3. Lack of Communication
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13. I. OVERVIEW
4. Exhibits
b. Exhibit 2 : Present and Proposed
Organizational Charts for HPS
RESIGNED
RESIGNED
SpecializedSales
Force
OVERVIEW BIZ FACTORS STATEMENT SOLUTIONS CLASS RECO.

14. I. OVERVIEW
4. Exhibits
b. Exhibit 2 : Present and Proposed
Organizational Charts for HPS
?
?
?
?
?
?
OVERVIEW BIZ FACTORS STATEMENT SOLUTIONS CLASS RECO.

15. I. OVERVIEW
4. Exhibits
b. Exhibit 3 : HPS—Taiwan Balance Sheet
(in thousands of US$)
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16. I. OVERVIEW
4. Exhibits
b. Exhibit 4 : HPS—Taiwan Sales by Product
Line, 1993-1998 (in thousands of US$)
OVERVIEW BIZ FACTORS STATEMENT SOLUTIONS CLASS RECO.

17. II. BUSINESS FACTORS
1. Communication Problem
• Fukuda doesn’t have any
experience in Taiwan and ignore
the culture
• He took decisions before
arriving on the field
 Lack of consideration for his
collaborators
• Once in Taiwan, he put in place
measures without consulting the
Taiwanese Managers
 NO DIALOG WITH THE EMPLOYEES
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18. II. BUSINESS FACTORS
2. Intercultural Differences
FUKUDA
• Fukuda has an individualistic vision and culture
• He is only focused on the success of the subsidiary
and forget the workers
• He wants to solve problems too fastly
CHINESE
• The Chinese are attached to the group and
solidarity
• They want more cooperation
• They see M. Fukuda as an impostor (Chinese don’t
like Japanese)
OVERVIEW BIZ FACTORS STATEMENT SOLUTIONS CLASS RECO.

19. II. BUSINESS FACTORS
3. Asian Vs Western Management
Basic Values
Management StyleOrganization
Asian
Asian
AsianAsian
Westerns
Westerns
WesternsWesterns
Individual
Legal
Confrontation
Analytic
Short Term
Control
Conflict
One Product/
Service
focused
Rationality
Structured
Directive
Doint
Formal
Fragmented
Hierarchial
Competitive
Group
Trust
Compromise
Fluid
Long term
Human Resource
Collaborative
Customer
focused
Relationships
Flexible
Adaptive
Understanding
Informal
Generalist
Integrated
Co-operative
OVERVIEW BIZ FACTORS STATEMENT SOLUTIONS CLASS RECO.

20. II. BUSINESS FACTORS
4. SWOT
STRENGHTS WEAKNESSES
- Important international
company (with
subsidiaries)
- Important annual sales
- Specialized employees
- Ability of the company to
invest
- M. Lo’s influence and
knowledge on the field
(Taiwan)
- Loss of money in Taiwan
- Resignation of M. Hu and
Lee
- Bad work atmosphere
- Fukuda is narrow-minded
- Some positions are still
empty
- Western culture VS Asian
culture
OPPORTUNITIES THREATS
- Bankruptcy of the
competitors
- Good Sales = Diminution
of inventory
- Arrival of a new
Management
- Elevator’s Market
- Fukuda’s lack of
knowledge and
experience in China
- Employees’ discontent
- Sales still decrease
- Harder price competition
- Closing of HPS Taiwan
OVERVIEW BIZ FACTORS STATEMENT SOLUTIONS CLASS RECO.

21. III. STATEMENT
• Critical financial situation due to a
decrease of sales
• Bad Morale of the workers who are
discontent about the situation
• Intercultural Problem about the
Management Style
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22. IV. DIFFERENT SOLUTIONS PROPOSED
1. Status-Quo
Meaning :
Continue with Fukuda’s ideas (close the heating and
cooling equipment, follow the reoganization
plan)
- Limit the loss
- Well structured
organization
- Increase of assets
- Sales not specialized
- Workers still angry
- Takes time
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23. IV. DIFFERENT SOLUTIONS PROPOSED
2. Re-open heating and cooling equipment
Meaning :
Go against Fukuda’s policy and give a
chance to the heating and cooling
equipment department
OVERVIEW BIZ FACTORS STATEMENT SOLUTIONS CLASS RECO.
- Employees are not fired
- Employees’ morale good
- Competition possible against
Japanese
- Loss of money
- Margin will have to be
ridiculous
- Fukuda will be angry

24. IV. DIFFERENT SOLUTIONS PROPOSED
3. Slow down Fukuda’s actions
Meaning :
Slow down Fukuda’s policy, take the time
to communicate with the employees about
the gravity of the company’s situation, and
help them with a re-insertion job plan
OVERVIEW BIZ FACTORS STATEMENT SOLUTIONS CLASS RECO.
- Employees will have more
time to find another job
- Employees’ morale won’t be
too bad
- Fukuda will have what he
expected
- Managers will be able to
advice
- Loss of money
- Some workers
will still
complain

25. IV. DIFFERENT SOLUTIONS PROPOSED
4. Dismiss Fukuda
Meaning :
Dismiss Fukuda and replace him by
a confirmed Chinese/Taiwanese
Manager
OVERVIEW BIZ FACTORS STATEMENT SOLUTIONS CLASS RECO.
- Employees will be
more respectful
- Employees will listen
more easily
- Manager will know how
to react with the
workers
- More efficiency
- Fukuda will be annoyed
- Might go against the
Headquarters point of
view
- Might cause a loss of
control
- Loss of a brillant
manager

26. IV. DIFFERENT SOLUTIONS PROPOSED
5. Close HPS Taiwan
Meaning :
Close the Taiwan Subsidiary
Firm
OVERVIEW BIZ FACTORS STATEMENT SOLUTIONS CLASS RECO.
- Restart from zero
- No more loss of money
- No more debts
- Cost a lot of money
- Unemployment
- No more possibility to
create a new subsidiary in
Taiwan in the future

27. IV. CLASS DISCUSSION
Please share with us your
point of view and
recommendations
OVERVIEW BIZ FACTORS STATEMENT SOLUTIONS CLASS RECO.