Coach Is a Luxury Goods Case Study

Excerpt from Case Study :

For example, an employee should be categorized on his or her ability to move up the corporate ladder, and the timing of such a move. If Coach wishes to enter India in 2011, then, the company would know which among the firm's managers is able to move into one of the new roles today, and which might be able to move into such roles in the future.

The second policy implication of the integrated approach to strategic human resources management is the locus of control (Bratton, n.d.). This is the control-based component of the strategy. The locus of workplace control at Coach focuses on outcomes and the primary means of employee acquisition are internal, so the policy prescription is focused on a commitment HR strategy. This strategy emphasizes training as a means to increase employees' competencies and outcome control (Ibid). The high consistency of service standards implies that the paternalistic model may also be of use. It is recommended, therefore, that the new HR strategy incorporate a paternalistic interpretation of the commitment strategy. The company must implement training programs, including those that are designed to help the company meet specific challenges such as training on Indian customs, logistics and government interactions. The company should also take control over the career paths of key employees, by moving them into key positions. For example, a manager of Indian descent that has been identified as having the potential to help launch a flagship store in Mumbai could spend some time working with the Indian and Muslim customers in Kuala Lumpur before transferring to Mumbai to learn about the back office aspects of Indian operations. This would not only demonstrate a strong commitment to developing top candidates, but it would also be paternalistic in that the company would take a high degree of control over the process.

Outcomes-based strategies are useful for companies that can easily measure employee outcomes. Therefore, Coach should improve its data-gathering and reporting with respect to key outcomes. The company needs to adequately tie specific employee behavior with the customer-focused outcomes approach. This would mean increasing the use of customer satisfaction, returns and sales figures in company training, the rewards systems and the employee evaluation process. By placing increasing emphasis on these measures and simultaneously providing key leadership candidates with the training and support needed to improve their outcomes-based scores, the company will be able to develop leaders that are able to guide expansion in Asian and Indian markets for the coming years.

Flowing from the specific geographic expansion needs, the HR strategy will also focus on some external acquisition, in particular from the regions where the expansion is most likely to be concentrated. This creates unique challenges. Candidates can be acquired on the basis of their experience in retail or on the basis of their personality traits, but they must be properly acculturated. Coach is an American company that has succeeded on the basis of performing specific tasks in specific ways to achieve a set of desired outcomes. As it is expected that new employees from India, the Middle East and other parts of Asia will be less familiar with the expectations of Coach culture, it is recommended that new hire training be improved.

Given the opportunity for rapid expansion in India in particular, it is important that the company develop as large a pool of managerial talent as possible. The recommendation for increased new hire training will have a significant benefit in the coming years because it will allow new employees with basic managerial skills to understand the systems they are expected to implement and the outcomes that they are expected to achieve. Future managers will come from this pool of new employees, if they are able to meet the company's high standards. Thus, in addition to the company's basic new hire training program, increased funding should provide enhanced skills assessment and culture training so that future managers can more easily be identified, allowing the company to take greater control over the careers of such strong candidates. Given that managerial training programs in India and Asia are unlike those in the West, it is likely that excellent potential leaders can be found in unusual places in these countries. This necessitates the increase in paternalistic attitude taken to the career development of new employees in India and Asia.

Strategic HR Approach - Reward Management & Performance Management Elements

Reward management within this model is focused on opportunity. One of the key tenets of the model is that Coach wants to build long-term relationships with its employees, and that this cannot be achieved by orienting employees towards quick financial gain. Key employees are more likely to be retained through the paternalistic process of providing training and opportunity to the best. There are significant challenges that need to be met by this company, especially with respect to international growth, and this strategy focuses on cultivating employees that are oriented towards meeting those challenges. Intrinsic motivation is critical to the strategy, and thus the rewards system will remain unchanged from a financial perspective but will instead focus on motivating the potential leaders within the company to pursue the wealth of internal opportunities that are expected to emerge in the coming years.

The control elements of this strategic management strategy emphasize performance management. The prescription for enhanced outcomes-based measuring specifically addresses the ability of the company to exert greater degrees of control over employees. The emphasis on outcomes is important, because it reflects the need for employees to be creative when necessary to achieve ideal outcomes for our customers.

Limitations of the Model

Despite the wealth of merits to this model, there are some limitations to this particular strategic HR strategy. In particular, the model seeks to blend creativity and tight controls. While these two ideal inputs are not mutually exclusive, they are not universally compatible either. The success of this strategy, therefore, is dependent on the experience of current executives and managers to impart on the remaining employees the timing of creativity in finding solutions. Should the training, the current managers and the experienced workforce be unable to help new employees refine this process, there will be missteps in customer service and this could undermine the company. That this fine balanced between strict processes and creative solutions offers this risk is reflected in the company's understanding of the need for a high retention rate. It is hoped that the tactics contained within this HR strategy will result in the desired high rate of retention, especially for key potential leaders.

Another limitation of the model is that it does not address directly the challenges of integrating a large new workforce into the company. If growth in strong new markets like China and India meets projections, Coach could add dozens of new stores in just a few years in both nations. Middle-class cities would be targeted, something that has only happened on a limited scale thus far. While experienced senior management would lead this expansion, a considerable wealth of new staff would be required as well. The current Coach system is predicated on slow growth that can be internally driven. The new system focuses on internal development of managerial talent, but the strategy does not entirely address the need for a much larger front-line workforce in these nations. For example, the strategy provides enhanced training to new workers as a means of developing better managerial talent in these regions over the long-term, but over the short-term this training does not address the risk of higher turnover and lower customer satisfaction rates.

Another limitation of this approach is that it does not entirely address the needs specific to the People's Republic of China. While the paternalistic approach is consistent with Chinese culture, this is a happy coincidence rather than a specific, Chinese-centric strategy. The strategic approach does not take into account some of the more significant cultural differences and governmental differences that may be encountered. It is hoped that our current leaders in Greater China are able to adapt to the PRC operating environment, but this strategy does not specifically address this challenge.

Managing a Global HR Structure and System

The current organizational structure of Coach is oriented towards geography. There remains, however, an element of central control in New York because of the need for global consistency. However, the relative autonomy of Asian operations -- and the fact that these operations are going to drive the company's growth over the course of the next several years -- will make it more difficult to run the HR system at Coach on a global level. To a degree, some autonomy will be required because Chinese and other Asian consumers are different from those in the United States. This implies that the staffing approaches will also need to be at least somewhat different in order to better meet the needs of these customers. Indeed, while many current Coach consumers are globally…

Sources Used in Document:

Works Cited:

Bratton, J. (no date). Strategic human resource management. Palgrave. Retrieved October 28, 2010 from

Business Standard. (2010). KIT: The luxury products market in India. Business Standard. Retrieved October 28, 2010 from

CIA World Factbook. (2010). India. Central Intelligence Agency. Retrieved October 28, 2010 from website, various pages. (2010). Retrieved October 28, 2010 from

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