International Business Case Study: Maple Leaf Shoes

Over the course of the company’s lifetime, there have been numerous changes within Maple Leaf Shoes and its environment that demand a change in the strategy the company employs. Some of these issues are from the ever-evolving economic environment, particularly with the help of globalization, other issues are a direct result of the corporate atmosphere that has been created since the takeover.
Maple Leaf Shoes found its niche in being a low-cost provider, but production costs have been steadily rising. Not only is productivity an issue, but the company is faced with high labour costs. Compounding these issues is the fact that the price advantage was a critical aspect of the company’s marketing strategy, but competition from overseas has become a problem with high, quality shoes being made at a cheaper price due to the cessation of international trade barriers.
Unfortunately, there are numerous challenges that surround employee relations. Labour costs account for 45% of the manufacturing costs, and have been steadily rising. Due to this increase in costs, Maple Leaf Shoes has begun to automate its manufacturing process. This has caused a negative reaction from workers. In addition, Maple Leaf Shoes has sold some of their nonperforming
assets and facilities, and contracted out some services. This has also added to the unease that workers are currently feeling. The company also employs many part time and contract workers, which is likely to be an issue in the upcoming union negotiation.
In eight months, two of the four union contracts will need to be renegotiated, the outcome of these two conferences will have a large impact on future negotiations.
Looming over the upcoming meetings is the fear that a strike may coming if talks do not go as the union hopes. Furthermore, Maple Leaf Shoes would be crippled by the strike, and would be unable to recovery for a long period, which has upped the stakes. In addition, there is the threat that the remaining nonmanagerial staff are about to unionize, and management is worried that it will reduce already limited autonomy it processes in hiring, terminating and managing employees. Rapid unionization has some members of the company pointing their fingers towards the tone at the
top.
Management cannot afford to be expanded, but personnel is needed to fulfill currently empty roles. There is an attempt to fill managerial positions from within, but it is unlikely that there is an organized place to see skills of the personnel. Recently, two complains of sex discrimination from women has triggered the need for updated practices to protect both the employees and the company.
Coupled with the rise in international competitions and cheaper prices, Maple Leaf Shoes has attempted to create joint venture partnerships in Indonesia, India and Mexico. The partnerships in India and Mexico are proceeding as planned, but the Indonesian deal ran into issues, and Maple Leaf Shoes are searching for a new partner. These new expeditions have exposed the company to risks that are exclusive to international operations.
Finally, the lack of human resource personnel has the company ill suited to deal with many internal threats. Individuals that work in the human resources department are improperly trained to be in the position, and therefore are unable to adequately handle what the job requires.