SWOT Analysis:
Pac resources, Inc: A case study in HR practices
Team 1: Mohammad Zafar Durani
Gombojav Otgonbayar
Elis Agolli
Srdjan Višnjevac
Faculty of Economics and Administration
Masaryk University
2016
1. Strengths:
1.1 - Focusing on core business:
For any business surviving in the market is not just a word to say, in such an 1
economic
downturn time, while many organizations are struggling to stay in market. Therefore, “basic
strategy for weathering an economic downturn involves focusing on your core business and
strengths, reigning in unnecessary costs and doing more with less. The same has been practiced
by the PAC Resource, Inc. in an economic downturn.
1.2 - Competitive salary and compensation programs
Generally, the motivation is not about the compensations, but the compensation should support
motivation framework in the organization. “Even the best managers in the world are not able to
keep highly motivated teams, when the compensation strategy is not in line with the job market.
The employees usually know the common levels of salaries in the industry and when the
organization is below the median or the average, it has to compensate the difference in other
area.
In addition, “The current competitive conditions in the business world make it difficult to acquire
and retain the top talents. Hence, the compensation strategy is the extremely important piece of
the overall HR strategy to keep the company competitive and successful2
.
1.3 -Beneficiary Training programs
As is obvious that any employee who receives the necessary training is better able to perform
his/her job. They become more aware of safety practices and proper procedures for basic tasks.
The training may also build the employee’s confident because one has a stronger understanding
of the responsibility of his/her job. This confidence may push him/her to perform even better and
think of new ideas that help them excel. Continuous training also keeps the employees on the
cutting edge of industry developments3
. Moreover, as its technologies era, telecommute is the
better way to overcome the distance working problem and ease the work to be done at home.
1
Talent management practices to help you survive a downturn
http://www.halogensoftware.com/uk/learn/how-to/7-talent-management-practices-to-help-you-survive-a-downturn
2
Why is compensation strategy important?
http://www.simplehrguide.com/why-is-compensation-strategy-important.html
3
The Importance of Training & Development in the Workplace, by Shelley Frost, studio
http://smallbusiness.chron.com/importance-training-development-workplace-10321.html
1.4-Good management practices
Several examples of good managers can be shown in PAC. They were promoting innovation,
creativity, experience sharing and communication skills for betterment of employees.
2. Weaknesses:
2.1 - Small customer base and lack of R&D department
Current major dependence on one customer (83% of total revenues) may bring significant future
risks such as negative impact on innovation by responding only to customer needs. Likewise,
possible stumble of their business consequently induces domino effect for PAC Resources and
that level of customer concentration makes company highly vulnerable. Company should take
into consideration creation of R&D department in order to prepare for product diversification.
2.2 - Poor management skills
Another problem to be addressed is poor management with a history of inconsistency of enforced
policies, abused system of reward and inequitable treatment with regard to employee carrier
possibilities. Lack of equitable incentives and recognition usually leads to poor performance.
According to U.S. researchers, from the University of Iowa, 4
workers who took part in training
were more likely to stay only if they saw attractive advancement opportunities. If not, they felt
little loyalty to their company and their new skills made them more attractive to other firms.
2.3 - High level of employees’ compensation claims
Ergonomic injuries and illnesses contain important ratio of costs for company’s health issues. A
community-based study of workers with CTS in Maine 5
indicated that 20% of workers were out
of work for 6-month period, and 14% at the 18-month follow-up, because of CTS symptoms.
2.4 - Employee unrest
Frightening atmosphere in general concerning future layoff and misuse of policies triggered
possible union creation by workers in order to secure their jobs and find collective strength. This
would lead to potential low productivity, strike actions and difficulties for dismissing employee
for contract violation.
4
Antecedents and Outcomes of Organizational Support for Development: The Critical Role of Career Opportunities.
Maria L. Kraimer, Scott E. Seibert, Sandy J Wayne, Robert C. Liden, Jesus Bravo, Journal of Applied Psychology,
2011, vol 96, 485-500
5
Katz JN, Lew RA, Bessette L et al. Prevalence and predictors of long-term work disability due to carpal tunnel
syndrome. Am J Ind Med 1998; 33:543–550.
2.5 - Poor communication, weak impact of HR department. Inflexibility
There is a huge discrepancy regarding communication between managers and workers due to
no input from HRM (annual goals set up without influence of workers). This obstructs efficiency
and causes lack of enthusiasm and motivation and even production of poor quality. Also
company didn’t develop flexible basic plan for potential downsizing.
3. Opportunities:
3.1 - Exploring new markets
The economy of our new age, is based on services and everything is computerized, so you can
totally say that a high tech company like PAC may take the opportunity to spread itself in Europe
and Asia, where their technology can get credits, and unavoidable new profits.
3.2 - Made in America products
To be part of the greatest economy has it virtues. American culture in the way we do business
would affect everyone. And Pac philosophy in producing Made in USA products has its great
advantage. You are guaranteed for the quality of American products and lots of regulations aim
for that6
. You will get a step closer in getting your deal everywhere in the world because of the
good name of creating “Made in America way”7
.
3.3 - Niche market
The best thing of niche marketing, it is that it’s focused in a special and concentrated target of a
market. It is probably part of a product that is poorly supplied and maybe not even at all8
. Pac
has an opportunity to focus on such a market because of its special electronic part of computers.
It may be a source of success if you get to cover a specific niche market uncovered before, in the
same time you can get to be a monopoly in supplying.
6
FTC- “Federal Trade Commission” regulations
7
Made in America quality, Connectronics http://www.connectronicscorp.com/blog/the-benefits-of-products-made-
in-the-usa/
8
Why is Niche Market important – Track Maven integrated marketing analytics platform.
4. Threats:
Good times are far behind and PAC resources is facing the threats and experiencing the pain of
'falling from the sky'. Once successful and aggressive business is now facing the challenges that
they should've been prepared for since latest downturns in the industry. According to Ten areas
that threat can arise9
, we emphasize on industry trends, economic trends and labor market.
4.1 - Industry trends
Computer industry is characterized by its fast-paced and ever-changing nature. US R&D
spending in Computing and Electronics sector was the biggest (55 billion USD) compared to
other Chemicals and Energy (10 billion USD) or Consumer (5 billion USD)10
in 2010. So there
is always risk of the product to be outdated.
4.2 - Economic trends
Economic downturn is affecting overall industry. Because PAC resources is in B2B business,
they are more sensitive to it, thus more risk.
4.3 - Keeping up with the quality
Another result of the tension among workers was decrease in quality. While Cliff said "it is
quality of our workforce that garnered our success", on the other hand "product damage is up,
and production's hitting the skids".
4.4 - Talent or Knowledge
Lay-off is forcing the PAC resources to choose from Talent, which the company put much
resource to find and recruit, or Knowledge of long-time employees.
4.5 - Company reputation
There are several cases that can affect company reputation. Two lawsuits, for now. And layingoff
the newly hired employees could also harm reputation.
9
Definitive business plan: Revised 2nd edition, Richard Stutely, 2002
10
The Global Innovation 1000: Comparison of R&D Spending by Regions and Industries, PwC
Literature and electronic sources overview:
1) Talent management practices to help you survive a downturn
http://www.halogensoftware.com/uk/learn/how-to/7-talent-management-practices-to-help-you-
survive-a-downturn
2) Why is compensation strategy important?
http://www.simplehrguide.com/why-is-compensation-strategy-important.html
3) The Importance of Training & Development in the Workplace, by Shelley Frost, studio
http://smallbusiness.chron.com/importance-training-development-workplace-10321.html
4) Antecedents and Outcomes of Organizational Support for Development: The Critical Role of
Career Opportunities. Maria L. Kraimer, Scott E. Seibert, Sandy J Wayne, Robert C. Liden,
Jesus Bravo, Journal of Applied Psychology, 2011, vol 96, 485-500
5) Katz JN, Lew RA, Bessette L et al. Prevalence and predictors of long-term work disability due
to carpal tunnel syndrome. Am J Ind Med 1998; 33:543–550.
6) FTC- “Federal Trade Commission” regulations
7)Made in America quality, Connectronics http://www.connectronicscorp.com/blog/the-benefits-
of-products-made-in-the-usa/
8) Why is Niche Market important – Track Maven integrated marketing analytics platform.
9) Definitive business plan: Revised 2nd edition, Richard Stutely, 2002
10) The Global Innovation 1000: Comparison of R&D Spending by Regions and Industries, PwC