Potential staffing issues

Maria Zettel is the CEO of a medium sized manufacturing company based in Melbourne
called Marque Value. The company has a reputation for the highest quality products, but for
some time, the company has been under heavy competition from cheaper manufacturers in
South-East Asia. The COO of the company for the past 18 months, Pham Tran, has global
experience in manufacturing and is keen to set up a high quality production plant in
Vietnam, for the company to become more competitive internationally. Although Pham was
born in Australia, he speaks fluent Vietnamese and has made several trips to Vietnam to
evaluate opportunities for the company’s future.
The staff in Melbourne are ethnically diverse, principally with Chinese, Vietnamese and Sri
Lankan backgrounds. Many staff in the company have become somewhat stressed about the
lack of certainty in the future of their jobs, and turnover by highly skilled staff has increased
dramatically in the last year. This has meant that the company has had to invest a lot of
money and time in employing and training new staff, so as to retain the company’s high
quality product reputation. Maria realised that this was becoming unsustainable, and
developed a board proposal with Pham to set up a factory in Vietnam. Their idea is not so
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much to close the Melbourne plant, but to become more competitive in the global
The Board has now approved the business case to set up an additional plant in Vietnam, and
Pham has been chosen to head the project full-time for the next 12 months. At the same
time, the Board has decided to reduce production by 30% in Melbourne over the same 12
month period. This would translate to a 35% cut in the current production workforce. Maria
has thought that she would sell the project to the staff as the only path to ongoing viability
of the company, and that there would be additional opportunities available for Melbourne
staff to be involved in setting up the Vietnam operation.
Maria has asked you as HR advisor to report on the HR issues associated with expanding
operations in Vietnam and concurrently downsizing operations in Australia. Specifically, your
report should respond to these questions:
What are some of the potential staffing issues in setting up a plant in Vietnam?
What is the best way in managing the downsizing of the workforce in Melbourne?
What factors would you use in selecting appropriate people within the Melbourne workforce
to be involved in setting up the new plant in Vietnam?
Maria has requested that you use theory from the literature on International HRM plus HR
practice sources to develop your responses, so that your report is based on evidence rather
than opinion.

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