Comprehensive Case Scenario

Human Resources Management

The Wilson Brothers Limited Case

Case Scenario Written By Charles Purchase, Seneca/Canadore Colleges
(Case Fictional)
History
In 1960 the Wilson Brothers, Bob and John, started Wilson Brothers
Limited. This Canadian company manufactures and distributes various lines
of prepared food products for the Canadian market from a number of plants,
with the head office located in Brandon, Manitoba. Bob was just 23 years
old at the time and John was 21. In the first year of operations the sales
volume for Wilson Brothers Limited was $300,000. By 2000 Wilson
Brothers Limited had 6 operating plants in Canada. They had also expanded
to the western US market and had a number of plants in Europe. Wilson
Export Division was responsible for exporting product to Japan and China.
In 2000 the total sales volume of the Company was over 6 billion dollars.
The company was a Canadian business success story, both at home and
abroad. In addition to the spectacular volume increases, the company was
very well managed financially. It had no reason to go public to raise capital
as it financed all of its expansion through earnings.
There were a number of reasons for the Companys exponential growth.
First and foremost, the brothers valued hard work. They each worked ten to
twelve hours per day, even in the latter stages of their careers.
Consequently, their senior and middle management group worked similar
hours. Secondly, each brother was a skilled salesman in the traditional
sense. Their handshake was their bond. Thirdly, they had tremendous
cultural sensitivity. Whenever they expanded to foreign markets they
recruited a local executive to be CEO at that location so that the local culture
was respected and integrated to business practices (fostered). They assigned
a Canadian executive to be VP Finance so that financial reporting was
consistent across all Company operations.
The brothers were proud of the exponential growth of the Company and
were particularly proud of their Canadian roots. This pride and work ethic
permeated through the organization from top management to the line

employees in the plants. The success of this Canadian organization attracted

executive and management talent from across Canada.
Setting them apart from their competitors was the speed with which strategic
decisions were made and the flexibility by which these strategies could be
implemented. Strategic decisions were made only by the brothers. From the
Vice Presidential level down, all operational choices made were in support
of the implementation of the plans developed by the brothers. Employees
from coast-to-coast were extremely proud that the Company could go from
conception of a new product idea to launch of the product in the marketplace
in a matter of weeks. Similar decisions made by their competitors could
take months or even years.
The brothers controlled as many elements of the food supply business as
they could. For example: they ensured that the plants always had an
adequate supply of ingredients on hand for production. They also formed
their own trucking firm, Able Distribution Limited, a wholly owned
subsidiary of Wilson Brothers Limited. In this way they were able to
guarantee on-time deliveries to customers. More than 70% of the demand for
the trucking firm came directly from food business deliveries, independently
operated out of Truro, Nova Scotia.
Threats to the Business
Today the Wilson brothers know that regardless of the success their
company has enjoyed over the years and their attempts to control aspects of
the business, it faces significant threats to profits on a daily basis.
General Canadian Economic Conditions
Over the last decade the Canadian economy has seen a major deterioration in
its manufacturing base which in turn has increased unemployment and
depressed real wages. So, even though inflation hasnt been a huge factor in
the equation, it has risen at a level greater than general wage increases. One
could argue that this should have little impact on the food business as food
is food and everyone has to eat, but consumers have become increasingly
more price and health conscious. In terms of the percentage of overall
family budget devoted to food acquisition, the average family spends less
now than it did five years ago. The trend to shopping at big box wholesale or
discount stores such as Costco and Walmart, or the popularity of generic

brands at Sobeys or Food Basics, impact the profitability of brand name

products competing for the same market.
Competition
Significant competition exists in Canada from major companies with similar
product lines. In the juice business for example Wilson Bros would compete
with Coca-Cola through its Minute Maid Division. There are a number of
other American firms that have penetrated the Canadian market attempting
to decrease Wilson Brothers Limited market share. Some of the US
competition is dependent on the value of the Canadian dollar. Competition
has also stiffened overseas, particularly in Europe. Early on Wilson Bros
was often first to market with their products in many European countries,
but as the market matured, local companies saw the success of prepared
foods, gauged the opportunity and began to compete directly with Wilson
products.
Pricing
The Canadian market for food producers is split into two avenues: retail
sales, selling the product through major grocery chain stores such as Sobeys;
and food service sales, such as McDonalds or Swiss Chalet. On the retail
side, major grocery chains have developed their own housebrands to
compete on price against Wilson Brothers products in many of their food
lines. On the food service side, Wilson Brothers is only able to maintain the
business primarily on best price so that over time, regardless of volume
increases, profit margins tend to decrease.
Consumer Preference
In the early years the Wilson Brothers products were extremely popular,
solely based on the convenience of prepared food. Recently however,
consumers are being more discerning about purchasing convenience foods,
paying close attention to such health concerns as transfats, unsaturated fats,
salt, and sugars. Wilson Brothers desserts in particular have suffered. In
Quebec the market has always been softer than other markets in Canada, and
continues to deteriorate because of the preference for home cooking.

Transportation
Able Distribution Limited, (the wholly owned subsidiary of Wilson Brothers
Limited) transports raw product to its plants for manufacture and inventory
to its customers to market. However, the global cost increases in petroleum
products have been significant and with the need to keep product prices low,
transportation cost is a major area of concern for the Company.
Recruitment
Wilson Brothers has been an attractive company for Canadian executives,
managers and plant personnel to seek employment because of its Canadian
roots, culture and success. However, they have had significant issues
recruiting in the Vancouver market in recent years since the cost of living in
that market far exceeds real income.
Unionization
Most of Wilson Brothers Canadian operations are non-union and for
competitive reasons the brothers tend to prefer it that way. They have
always felt that any issues with an employee could and should be dealt with
directly, on a one-to-one basis. The brothers believe they need to operate
with flexibility in order to make quick strategic decisions; to develop a new
product idea; and take it to launch as quickly as they do. Labour agreements
can add a level of structure and time consuming protocol that creates a less
flexible operational environment.
The Current Situation
You are brought in to the organization as Director of Human Resources for
the Canadian operations. The Company has manager-level HR
representation in each plant in Canada, but no one coordinates the overall
effort. Your job, as described, is to develop and implement HR policies so
that the company can apply them consistently throughout the Canadian
organization. Subsequently, you will introduce policy to international
operations, ensuring that where currently the company has non-union status,
it is maintained. In that capacity, you report to Ron Abrams, Vice President
of Operations, Canada. You work from the corporate offices in Brandon.

You discover a number of HR issues that need to be addressed. Executives

and managers are hired at starting salaries that were set primarily by their
ability to negotiate their own salary rather than on any specific salary range
criteria. No policies regarding Employment Equity or Pay Equity exist. The
company has no job description, nor any job evaluation processes in place.
Performance appraisals are nonexistent below senior management, and even
at that level, appraisals are informal and totally based on an Management By
Objectives style of management. Bottom line results are paramount
regardless of the behaviours exhibited by the executives and managers to get
those results.
There are no bonuses in the organization except for the sales and marketing
staff and they are paid solely on sales target achievement and market share
improvement. Succession management has not been considered.
Historically, if a brother determined a vacancy he would offer that position,
based only on an employees ability to implement a strategic objective.
Often that judgment was based on a fleeting impression. Even the brothers
themselves have no plan with respect to who will replace them should they
retire.
Along with the pride of working for the company there is also a pervasive
fear. At the head office and plants in Brandon for example, employees are
very afraid of losing their jobs as Wilson Brothers Limited is the one major
employer in the area. Since there are no consistent policies on any employee
relations issues; any employee at any level could be terminated at any time if
he/she fell out of favour with the owners.
The brothers attend two noteworthy team meetings. The team that includes
the CEOs from all of the European and Asian subsidiaries meets once every
three months at the corporate office in Brandon. The purpose of this team
meeting is to discuss and improve profit results. The brothers also meet
once a month with the senior executive team in Canada including the VP
Sales-Retail, the VP Sales-Food Service, the Executive VP Marketing, the
VP Engineering, the VP Finance and the VP Operations. No other formal
team meetings are held in the company. There are groups that meet on an
ad-hoc basis to manage new product implementation; these employees come
from Sales, Marketing, Finance and Operations.
As the newly appointed Director of Human Resources for Wilson Brothers
Limited, you recognize that there is substantial work ahead. You know that

while changes are required, you are very aware that the company has been a
huge success. How will you help move the company forward? Bob, John
and the other members of the executive team will have projects and
assignments for you to do in the near term. You will gain knowledge and
experience as you offer your leadership in the field of Human Resources
Management. Good luck and have fun!!

Company Details
Wilson Brothers Limited Executive Team-Canada
Bob Wilson:
Co-Owner-CEO
John Wilson:
Co-Owner-President
Murray Brown: Executive MP Marketing
Ron Abrams:
VP Operations
Dave English:
VP Engineering
John French:
VP Finance
Gayle Robillard: VP Sales Retail
Diane Ouellette: VP Sales Food Service
Canadian Plant Operations
Vancouver, British Columbia (220 employees)
Old Facility and Equipment
Residential Area
No Room to Expand as Plant right on the Shoreline
Only 1 Product Produced at Location
Union Operation-IBT (Teamsters)
Average Hourly Wage Rate
Total Benefit Rate
Total Compensation Rate

$ 38.02
$ 9.51
$47.53 (hourly only)

Calgary, Alberta (410 employees)

Large Facility, New Equipment
Industrial Area
Room to Expand
All Products Produced at Location
Non Union

Average Hourly Wage Rate

Total Benefit Rate
Total Compensation Rate

$32.10
$ 8.03
$40.13 (hourly only)

Brandon, Manitoba (860 employees)

Large Facility, New Equipment, Head Office
Industrial Area
Room to Expand
All Products Produced at Location
Non Union
Average Hourly Wage Rate
Total Benefit Rate
Total Compensation Rate

$30.05
$ 7.51
$37.56 (hourly only)

Toronto, Ontario (1035 employees)

Retail and Food Service Sales Office Location
Separate Plant Location-Industrial Area
Room to Expand
One Product Produced at Location
Unionized-UFCW-United Food and Commercial Workers
Average Hourly Wage Rate
Total Benefit Rate
Total Compensation Rate

$34.10
$ 8.53
$42.63 (hourly only)

Montreal, Quebec (300 employees)

Medium Sized Facility, Industrial Area
Room to Expand
Two Lines Produced
Non Union
Average Hourly Wage Rate
Total Benefit Rate
Total Compensation Rate

$30.05
$ 7.51
$37.56 (hourly only)

Halifax/Dartmouth, Nova Scotia (280 employees)

Medium Sized Facility, Industrial Area
Room to Expand
Two Lines Produced
Non Union
Average Hourly Wage Rate
Total Benefit Rate
Total Compensation Rate

$30.00
$ 7.50
$37.50 (hourly only)