Hrm380 Tua Amc Case

8/13/2019 Hrm380 Tua Amc Case

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American Mining Company

Letter of Transmittal

23rd October, 2013Tajuddin AhmedFaculty Member

School of BusinessNorth South UniversityDhaka- 1213

Subject: Submission of Case Analysis on American Mining Company in Colombia.

Dear Sir,

Here we have the case solved as a requirement for the HRM 380 course. We haveworked with utmost enthusiasm, since the experience has augmented and assisted usintegrate our knowledge about elucidation and execution of the approaches we have

been taught so far and implement them accordingly.

We anticipate learning some real life lessons and first handing knowledge onCompensation Theory during further course works. We would be delighted to furnishyou with any details, if required.

Thank YouYours sincerely,

Group E

Hrm 380.1

Name Id number signature

Md Golam Mohiuddin

Bhuiyan

103 0035 030

Safa Khan 102 0187 030

Rakibul Kabir 093 0733 030

Anzabin Hassan 102 0195 030

Mumu Benzir Alam 101 1189 030


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Executive Summary

AMC is one of the leading coal mining companies in USA that had finished moving nearly all ofits coal operation from the southern united state to premier mine in Northeast Colombia. Before

move to Colombia.AMC was one of the top 300 largest private companies in USA that providinghigh quality coal, reliable delivery and excellent service. The advantage which was like icing onthe cake was that Colombian government was extremely eager to provide AMC with lucrativeinvestment incentives because the government was hit by enormous high public debt and wasfeeling pressured to privatize its national industries and attract foreign investment in order tomeet International Monetary Fund (IMF) loan conditions. The incentives offered by Colombiangovernment included tax-free operations for the first ten years, extremely cheap land holdingColombias best coal reserves, and subsidized infrastructure development.

The seaport with capacity to move 10 million tons of coal per year would be for the exclusive

use of AMC. Over 500 soldiers of Colombian army would be continually posted for theprotection of companys operations and workers.Few investment restrictions applied to foreigncompanies wishing to start business operations in Colombia. 100% foreign ownership waspermitted for most sectors with exceptions for national security, hazardous waste product, andsome real estate developments. In addition, Colombian President Andres Pastrana was pro-U.S.investment. Under Colombian law, 80% of a companys employees were required to beColombian national. AMC exceeded this percentage minimum.

President Pastrana was elected in 1998 with the mandate to bring an end to the violent clashesbetween Colombian Army, Marxist rebel groups and right wing paramilitary forces. Despiteintense efforts of Pastrana administration to negotiate with the rebels, kidnapping, assassinations,and other acts of terrorism showed no signs of letting up. Colombia maintained the highest rateof kidnapping compared to any other country in the world. Foreign executives as well as localfactory workers were often held for ransoms. The two largest group, FARC and ELN, controlledmore than 40% of the countrys territory.In a controversial effort to initiate negotiation PresidentPastrana carved out 42,000 square kilometers of remote jungle to be decade as demilitarizedzone. This allowed FARC to freely train its soldiers and cultivate cocaine.

In the mean timeMay 2000, the US congress sent Colombian government $1.3 billion aided

package to confront the rebel groups and drug problems. FARC became furious and against thisinterference. Operating within one of the worlds most volatile regions, AMCs operations werefrequently in the crossfire between the warring Marxist rebels and the paramilitaries. Theparamilitaries were another threat to AMC. FARC announced plans to impose a 10% tax oncompanies operating within areas within itscontrol. AMC flatly refused to make any paymentsto the rebels, calling it blackmail. In response, the rebels increased their attacks on AMC. Afterthe assassinations a strike was called for three days and all productions were seized. AUC statedthat union leader will be their target as long as they follow the Marxist ideology.


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TABLE OF CONTENT

Background 1

Theme 7

Main Issue 8

SWOT Analysis 9

Human recourse Issue 21

Recommendation 24

Implementation 31


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Background

This case focuses on the ethical dimensions of a decision an American-based company mustmake in order to survive in a country experiencing civil war. Major issues addressed include: (1)

what is a company's obligation for the protection if its employees? (2) what type of payment isallowed under the Foreign Corrupt Practices Act? and (3) should a company pay fees to terroristorganizations in order to continue to operate? Background information is given about thecompany and its move to Columbia. Additional information is provided about the Colombianbusiness and political environments as well as the obstacles facing the company. It has been alsotalked about both ethics and international business methodology. Although not the focus of thecase, the case provides information useful to the readers who desire to cover political risk issuesof international operations.

In the 16th century, the Spanish conquistadors were drawn to the Americas by a quest for riches;

in their pursuit they were soon exploiting the land of its resources. Today, remarkably little haschanged. Like the conquistadors, foreign companies today are seeking the fabled deposits of oresand minerals found in the western cordillera, the Andes chain. Mining technology hasdramatically changed since the Spanish first reached South America: hand-dug tunnels have beenreplaced by open pits, and pickaxes supplanted by heavy machinery, explosives, and gargantuandredgers. These mining methods, at times taking place in the heart of the Amazon, have haddevastating consequences for the surrounding environment and local populations. In this respect,Colombia has become a poster child for irresponsible mining practices.

Currently, South America has more mining exploration than any other area in the world. 38% ofglobal investment in metallurgical prospecting goes to South America, as well as 27% of all goldexploration. The area is particularly appealing to foreign investors because it contains a hugesupply of cheap labor and because its mineral reserves are relatively untouched compared to therest of the world. Although metal prices slumped from 2006 to 2009, they have since surged andwe are now witnessing mining companies scrambling to invest. Analysts predict that in 2011 and2012 alone, at least USD 29 billion of mining investment will be funneled into the two miningleaders of the area, Chile and Peru. In Colombia, the mining sector constituted 4.5% of GDP andprovided 24.8% of the countrys total exports, or USD 7.3 billion dollars, in 2009. Miningcontinues to be a significant source of foreign investment and resource development forColombia and the South America region.

Colombias rural population has been born into a system that continuously places their lives and

welfare at a disadvantage and has perpetuated predictable intergenerational bouts of poverty.This system is being exacerbated by a longstanding tradition of questionable mining processespracticed by both domestic and foreign-owned operations. Former President lvaro Uribeencouraged Seguridad Democrtica, a policy that sought to lower crime and to dismantle the


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Fuerzas Armadas Revolucionarias de Colombia (FARC) guerillas as well as the former right-wing vigilante organization, Autodefensas Unidas de Colombia (AUC). As it turned out, thedecrease in crime rates, while impressive, pertained mainly to the population living in urbanareas. As paramilitary groups and guerrilla fighters were pushed out of urban streets, theysubsequently relocated to the relatively un-policed, dirt roads of rural Colombia.

Despite a 63% drop in kidnappings during Uribes first term and a 40% decline in assassinationsand disappearances at the hands of the AUC, the rural population remains at high risk.

Nowadays, illegal gold mining is helping to fund the FARC and surviving vigilante groups,fueling the plight of rural people. These illegal mines do not follow worker safety regulationsand the land is often forcefully taken before it is exploited. Since Santos came into office, thegovernment has shut down 56 illegal mines and 573 people have been arrested, but the problempersists and lawmakers are still investigating strategies to counteract illicit operations.

AMC is one of the leading coal mining companies in USA that had finished moving nearly all ofits coal operation from the southern united state to premier mine in Northeast Colombia. Beforemove to Colombia.AMC was one of the top 300 largest private companies in USA that providinghigh quality coal, reliable delivery and excellent service. By moving to Colombia, MineCompany provided three of numerous advantages for AMC such as type of payment for workerwhere lower wages provided for worker in Colombia rather than US mine workers, Colombia theworlds largest coal reserve and the government offered for protection of the company operationand its employees. However, established the company in Colombia so many obstacles thatAmerican mining Company faced such as business and political environment problems such assecurity, attack the company , worker and foreigner investor for growth the developmentprospects.

In Colombia, workers were willing to work for much longer hours and in more dangerousconditions. Another advantage for AMC to move its operations to Colombia was that the countryheld worlds third largest reserve of coal. Its natural resources generated some of the highestquality thermal coal compared to anywhere in the world. Finally, the advantage which was likeicing on the cake was that Colombian government was extremely eager to provide AMC withlucrative investment incentives because the government was hit by enormous high public debtand was feeling pressured to privatize its national industries and attract foreign investment in

order to meet International Monetary Fund (IMF) loan conditions. The incentives offered byColombian government included tax-free operations for the first ten years, extremely cheap landholding Colombias best coal reserves, and subsidized infrastructure development.

The seaport with capacity to move 10 million tons of coal per year would be for the exclusiveuse of AMC. Over 500 soldiers of Colombian army would be continually posted for the


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protection of companys operations and workers.With these incentives, AMC beganconstruction on its Colombian mine in 1994. By 1995, the company began initial productioncapacity of 3 million tons per year. AMC controlled every step of the production and shipmentprocess. Planned expansion by the year 2004 would increase production to more than 10 milliontons per year. Reserves proved to be plentiful and allowed AMCs significant expansion plans.

Few investment restrictions applied to foreign companies wishing to start business operations inColombia. 100% foreign ownership was permitted for most sectors with exceptions for nationalsecurity, hazardous waste product, and some real estate developments. State-owned industrieswere being privatized significantly since the early 1990s. Noteworthy changes to the countrysaccounting and legal procedures had also taken place, making business transactions relativelymore transparent.

In addition, Colombian President Andres Pastrana was pro-U.S. investment. Under Colombianlaw, 80% of a companys employees were required to be Colombian national. AMC exceededthis percentage minimum. The mine and seaport workers were exclusively locals. Coal wasColombias third largest export in terms of revenue. The government expected private

investment within its coal industry to reach U.S. $2 billion by 2006.

The majority of the countrys coal deposit lay within the Guajira Peninsula on the Caribbean

coast. The state owned coal company Carbons de Colombia (Carbocol), was expected to be fullyprivatized by 2006. Carbocol had a 50% stake in the Cerrejon Norte Project, which was LatinAmericas largest mining operations and one of the worlds largest pit mines. AMC expressed

interest in acquiring Carbocols 50% equity in the project.For the thirty years previous to 2000,Colombia went through a bitter civil war between various rebel groups spread throughout thecountry.

President Pastrana was elected in 1998 with the mandate to bring an end to the violent clashesbetween Colombian Army, Marxist rebel groups and right wing paramilitary forces. Despiteintense efforts of Pastrana administration to negotiate with the rebels, kidnapping, assassinations,and other acts of terrorism showed no signs of letting up.

Colombia maintained the highest rate of kidnapping compared to any other country in the world.Foreign executives as well as local factory workers were often held for ransoms. It was commonto have violent and disruptive acts on companies operations and it was significantlydiscouraging to foreign investors. Rebel guerilla groups dominated Colombias drug trafficking

and kidnapping business. The two largest group, FARC and ELN, controlled more than 40% ofthe countrys territory.


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Colombias largest and most dominant rebel group was the Fuerzas Armadas Revolutionaries deColombia (FARC) with an estimated 15,000 troops. FARC pursued Marxist ideology throughviolent measures and strongly advocated redistribution of wealth, land reforms, and expulsion offoreign multinational corporations. Using profit from kidnapping and drug trafficking FARCprovided its troops with better training, better equipments, etc and they were far better off thangovernment soldiers who were reluctant to fight against these rebel troops.

In a controversial effort to initiate negotiation President Pastrana carved out 42,000 squarekilometers of remote jungle to be decade as demilitarized zone. This allowed FARC to freely

train its soldiers and cultivate cocaine. Several multinationals operated in this resource rich no-mans land. AMCs principal mine lay within territories contested by FARC, ELN and the

Paramilitary.

The Ejercito de LiberacionNacional (ELN) comprise Colombias second largest rebel group,

with almost 5,000 armed members. Like, FARC, ELN also followed Marxist ideology, butprimarily activities involved kidnapping and attacking countrys energy and petroleuminfrastructure. It relied on guerilla tactics to blow-up oil pipelines and power lines, in addition toblackmailing multinationals. The government also gave ELN a demilitarized zone of 5,000square kilometers to initiate peace talk. One month after the plane incident, ELN kidnapped over100 churchgoers from the central cityof Cali. Negotiations in Geneva, Switzerland, throughoutthe summer of 2000, however, failed to secure the release of ELN hostages. It wasnt untilmonths later, after government antiterrorist troops closed in on the group, that the hostages werereleased. Several hostages died during the ordeal.

AutodefensasUnidas de Colombia (AUC), Colombias renegade paramilitary faction, was a

highly controversial group determined to combat the Marxist rebel groups and any suspectedsympathizers by brutal tactics. AUC did not target multinationals directly. In fact oppositegroups contended that US companied actually benefitted from paramilitary actions. AlthoughAUC was officially illegal, the paramilitary were believed to unofficially coordinate attacks withthe Colombian army. Para membership was estimated to range between 5,000 to 11,000 highlydisciplined soldiers ledby the charismatic but elusive leader, Carlos Castano. Although the AUCwas officially illegal, theparamilitaries were believed to unofficially coordinate attacks with the

Colombian army. President Pastranacut all official government ties to the AUC, but theparamilitary group remained a primary source ofintelligence for the Colombian Army. Castanopublicly stated that the AUC depends on a 60% taximposed on cocaine producers to finance itswar against the rebels. Like FARC and ELN, the paramilitarieswere better equipped, bettertrained and motivated than their government army counterparts.


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In the mean timeMay 2000, the US congress sent Colombian government $1.3 billion aidedpackage to confront the rebel groups and drug problems. FARC was extremely furious about theUS aid and planned a series of coordinated attacks against US assets to protest against theinterference. AMC was decidedly in favor of US aid, and heavily lobbied the US Congress toincrease military shipments, including helicopters and training. AMC company officials

personally escorted Colombian government representatives around Washington, DC, during theirlobby efforts.

President Pastrana stressed to the US Congress that American corporations such as AMC thatoperated in Colombiasvolatile demilitarized zone would significantly benefit from such aid.The aid package passed with the objective of reducing cocaine production. US Congressmembers also acknowledged that American companies would directly benefit, as they had astrategic interest in a stable Colombia. AMCs very public support of US military aid and that ofPastranas administration further aggravatedthe FARC rebels. The rebels viewed the US andforeign corporations as imperialists that sought to dominate the Colombian worker.

Operating within one of the worlds most volatile regions, AMCs operations were frequently inthe crossfire between the warring Marxist rebels and the paramilitaries. FARC attacked AMCsrailroad a half dozen times within 1999 and 2000. AMCs mine pits were also subject to small

raids by guerillas. the companys operations on its infrastructure were severely impeded by theseattacks. The company was forced to operate only during the day as night operations were toodangerous. Kidnapping remained a major fear as well. Approximately 400 Colombian armysoldiers guarded AMCs operations to increase protection. The paramilitaries were another threatto AMC. FARC announced plans to impose a 10% tax on companies operating within areaswithin itscontrol. AMC flatly refused to make any payments to the rebels, calling it blackmail.In response, the rebels increased their attacks on AMC. Additionally, the leader of FARC saidthat it would take strategic actions against AMC in response to the companys strong support forUS military aid and Plan Colombia. Both FARC and ELN imposed similar taxes on other

multinationals. Oil pipelines, for instance, were favorite targets against oil companies thatrefused to pay.

Two more union leaders were assassinated by the AUC in October of 2001. The companycontinued to refuse to house its workers and relations with its union employees were reaching acritical point. The United Mine Workers of America publicly condemned AMC for not taking

the necessary precautions to protect its employees. It called for AMC to withdraw completelyfrom Colombia, stressing that the company was putting its employees in danger by operating insuch a volatile environment. Continuing operations in the country, the UMW stressed, wouldonly add to Colombias human right violations.The United Mine Workers continued to putheavy pressure on AMC to withdraw.


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Although AUC did not attack the company directly, the paramilitaries targeted the companysunion workers whom the AUC thought to be Marxist sympathizer. AUC killed six union leaderswithin 3 years. These assassinated union leaders previously requested AMC management toallow employees to spend the night at the mine but the management refused the proposal.

After the assassinations a strike was called for three days and all productions were seized. AUCstated that union leader will be their target as long as they follow the Marxist ideology. AUCconducted 2 more assassinations still the AMC management refuse to provide housing for itsworkers. United Mine Workers (UMW) of America publicly accused the company for not takingnecessary actions for protecting its employees. UMW stressed AMC to withdraw operationsfrom Colombia as a whole.


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Theme

The American Mining Company moves to Colombia because of rising labor cost in USA whichhas to cutting their profit. The labor cost of Colombia is very low that time and AMC can easily

make huge profit in a very short time. But after some years AMC facing many obstacles andproblems. The war between the Rebels like FARC and the Paramilitaries like AUC createdobstacles for AMC, because the union workers whom the AUC believed to be Marxistsympathizers or indirectly FARC followers, were included in the targeted list of attack for theAUC. With time, this turned out to be one of the major problems as the Paras were well armedand used to kill the workers openly. Also the other problems is to such as imposing 10% tax onAMC, attacking the transports carrying coal, harming the workers, kidnapping the executives,etc. As a result of continued attacks on workers, they started to strike and stopped AMCproductions for days.


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Main Issue

How American Mining Company (AMC) can overcome the security issue in Colombia to ensurethe successful operation of their HR management and resources as well as to survive thecompany from the political and assassinations obstacles in order to secure future growth?


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SWOT ANALYSISSWOT analysis is a simple framework for generating strategic alternatives from a situationanalysis. It is applicable to either the corporate level or the business unit level and frequentlyappears in marketing plans. Such an analysis of the strategic environment is referred to as aSWOT analysis. As the internal and external environment is an important part of the strategicplanning process. Environmental factors internal to the firm usually can be classified as strengthsor weaknesses, and those external to the firm can be classified as opportunities or threats. TheSWOT analysis provides information that is helpful in matching the firm's resources andcapabilities to the competitive environment in which it operates. As such, it is instrumental instrategy formulation and selection. The following diagram shows how a SWOT analysis fits intoan environmental scan

Strengths

Refer to a firm's strengths are its resources andcapabilities that can be used as a basis fordeveloping a competitive advantage in themarketplace

Weaknesses

Are the absences of certain strengths that may

hinder organization to run successfully.Opportunities

Refer that the external environmental analysis mayreveal certain new opportunities for profit andgrowth.

Threats

Refer as changes in the external environmental that is uncontrollable also may present threats tothe firm.


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STRENGTH

Very successful Company:American Mining Company was one of the leading coal mining company in America for a longperiod of time and it was among the top 300 largest private companies in America before itshifted to Colombia.

American Mining Corporations objective is to be the acknowledged leader in the explorationand development of U.S. base and precious metals by utilizing premium Industry experiencewith advanced technologies and proven efficiencies. Our goal is to elevate standards ofresponsible practices for the Resource Industry while building a profitable business. GaryMacDonald, President, CEO. With this statement, we can understand the goal of AMC.

American Mining Corporation ("AMC) is a production oriented Mineral Exploration andMine Development Company that explores, acquires, and develops advanced stage propertiesthroughout the western United States. With an accredited technical management the companyoperates from an advanced business model which it has developed for the purposes of reducingthe financial risks commonly associated with exploration and mining.

High rated company:American Mining Company is one of the highest rated companies in the world. AmericanMining Company provides high quality coal. They also provide excellent quality to theircustomers.

The Companys focus begins on gold and silver, however, base metals are also amongsupplementary economic objectives. It is the Companys opinion that in todays natural resourceworld the utilization of advanced techniques and technologies are major components for buildinga successful exploration and mining business.

American Mining Corporation is committed to environmental responsibility, safety, health, andforthright practices while providing a rewarding work environment. Thats why they AMC is oneof the most high rated companies in the world.


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Connection to the US government:AMC has a connection with the US government. It is really important to have the support of theircountries. United States of America is the most powerful country in the world. So, it is anadvantage for the American Mining Company.

In May 2000, the US Congress sent a $1.3 billion dollar aid package designed to help the Colombiangovernment confront its security issues created by the rebels and the drug problem. FARC, highlyagitated by the US aid, planned a series of coordinated attacks against US assets to protest the perceivedinterference.

AMC was decidedly in favor of US aid, and heavily lobbied the US Congress to increase militaryshipments, including helicopters and training. AMC company officials personally escorted Colombiangovernment representatives around Washington, DC, during their lobby efforts. Moreover, PresidentPastrana stressed to the US Congress that American corporations such as AMC that operated in

Colombias volatile demilitarized zone would significantly benefit from such aid. The aid package passedwith the objective of reducing cocaine production. US Congress members also acknowledged thatAmerican companies would directly benefit, as they had a strategic interest in a stable Colombia. So, itcan be said that AMC had a connection with the USA government.

Connection with the Colombia government:Colombia has 3rdlargest coal reserves of the world. High quality coals are found in Colombia.So, it is a good thing to have a connection with the Colombian government. Colombiangovernment has offered many lucrative propositions to AMC.

the government offered numerous attractive investment incentives to AMC, including tax-free operationsfor the first ten years, extremely cheap land holding Colombias best coal reserves, and subsidized infrastructure development. The construction of a modern seaport on the Caribbean coast, for example,would allow coal exports to be shipped to the United States within two days. The seaport with capacityto move 10 million tons of coal per year would be for the exclusive use of AMC. A new 200-kilometerrail link connecting the mine within the mainland to the coast would also be constructed. Over 500soldiers from the Colombia army would be continually posted for the protection of the companys operations and its workers.

With these incentives, AMC began construction on its Colombian mine in 1994.


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Experience:AMC has vast experience in mining business. They have experience of more than half century inthis business. Experience is an important thing for the business. It has value in the market andeverywhere.

AMC is a globally experienced company in coal mining, so their experience became strength forthe management team. AMC has started their business from America and they have moved fromAmerica and trying to emerge their business in Colombia.

The management of AMC has successfully. AMC was one of the leading coal mining companiesin the United States for the previous half century, with coal holdings of over 1.3 billion shorttons and revenues of nearly US $1 billion. Worldwide, AMC enjoyed a reputation of providinghigh quality coal, reliable delivery, and excellent service.

Natural resources:Colombia has the natural resources. It has the 3rdlargest coal reserves in the world. The coalsproduced in here are the best quality thermal coals.

Colombia is the world's tenth largest producer of hard coals and the fourth largest exporter ofcoal, based on 2009 data. The U.S. Geological Survey states that Colombia is the largest coalproducer in South America and has the largest reserves in the region. It also states that coal

mining for export is booming in Colombia, with production having increased by 80% since 1999.

The majority of Colombia's coal exports are shipped to European markets due to shorterdistances and lower freight costs compared to the rapidly growing Asian markets. Colombia isconsidered to be a low-cost producer with its coal highly sought after due to its low sulfurcontent.


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Provider of high quality coal:AMC enjoyed a reputation of providing high quality coal, trustworthy delivery, and outstandingservice, worldwide so this is also strength for the management team to achieve success easily ina country like Colombia.

American Mining Company is one of the topmost level companies. The company is also goodwith their machineries. Moreover the company is efficacious and assertive which is dynamicforward. American Mining Company has started its journey from America and now they aretrying emerging their business in Colombia.

AMC has earned a lot of success and achieved a reputation of top private level company inAmerica. In Colombia, they would find high quality coal which will be better for their clients. Itwill also increase their reputation in the market as the high quality coal producer.


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WE KNESSESInternal conflict:

AMC had some internal conflict with their employees in the USA. They were not happy with thedecision to move AMCs operation to Colombia. AMC told their employees that they would nottransfer their operations to other countries. So, it created problem for the AMC. Many employeeslost their job because of this move.

The management team of AMC was not responsible and loyal enough with their US workerwhich is a weakness of them. AMC has started their business from America and they havemoved from America and trying to emerge their business in Colombia. The management ofAMC has successfully earned their confidence. Although they were successful enough there aresome problems with them also.By the end of 2000, the American Mining Company (AMC) hadfinished moving nearly all of its coal operations from the southern United States to its premiermine in Northeast Colombia.

Despite telling its workers that the company would not transfer its operations abroad, AMCclosed nine mines over a five-year period, firing over 5,000 United Mine Workers. And this typeof behavior makes the management team irresponsible because they do even bother to tell theirworkers that they are moving to another country. Moreover this kind of behavior also says thatthe management team is not trustworthy to work with

Safety:AMC wanted to transfer their operation to Colombia, because they will have higher profits.There are risks too involving the decision. Colombia was in political disharmony at that time.Many factions like FARC, ELN, AUC, created problems for the foreign companies. Theykidnapped many employees and workers. Certainly, safety is a big issue.

AMC faced several problems during establishing its business in Colombia.Colombia was theoneof the worlds most volatile regions. A retable group called AUC killed several union leaders of

AMC.In 2001, the AUC stopped an AMC company bus transporting mine workers to theirvillage.

Two leaders of AMCs mine union were taken off the bus and killed execution style. AMCrequested increased protection from the Colombian government, but President Pastranas

response was constrained by a lack of trained soldiers and the rough, isolated terrain. AMCfailed to protect their employees and workers which was a big concern for them.


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Low morale among the workers:AMC workers were in secured about their jobs. In last 5 years, AMC shut down 9 mines. They

fired over 5000 workers. This has created insecurity among the workers.

If there is insecurity among the workers, then they are not likely to perform better in theworkplace. They will always think that they can be fired at any time.

Imbalance in the management of AMC:Although AMC was operating in Colombia, the top positions of AMC were held by the

Americans. As the company was operating in Colombia, they should have had some Colombiannationals in the top positions. It would have been better for the company, because Colombiannationals know about their country better than the Americans. So, it created an imbalance in themanagement of AMC.

The management team was successful with their several works. But in some cases they facedseveral problems because of their mismanagement. In Colombian several union workers werekilled by AUC. In the year 2001 two union lender of AMC were killed by AUC. For thisreasonthe assassinated leaders had previously requested that AMC allow employees to spend thenight at the mine, due to the dangerous traveling conditions after dark.

AMC refused to make this accommodation, stating that the mine was not equipped to house itsworkers. The day after the assassinations, over 1,200 of the companys employeeswent on strikefor three days in protest. These problems occurred because the management failed to managetheir unions.


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Less control over the workers:AMC could not handle their workers very well. Employees and workers were kidnapped andmurdered. Workers demanded to provide housing in the mines. But, AMC refused to providethatbecause the mine was not equipped to house its workers.

So, the workers went on strike for 3 days which hampered their production. If they had much control overthe workers, then these things would not have happened.

This a weakness for the company because the management needed to control their workers. But, theyfailed to do so.


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OPPORTUNITIES

Low labor cost/wages:The first opportunities for American Mining Company (AMC) are low labor cost. Colombiaslow wages provided a much cheaper labor force in comparison to the high hourly salaries of theUS mine workers.

Wages for Colombian mine workers, for example, ranged from $500 to $1,000 a month, whileUS mine workers received over $3,000 monthly plus benefits. Additionally the company issuccessful and confident which is pushing forward.

By providing low wages to the company workers AMCs management team got the opportunityto save money for the future expense.Also earn more profitability and reserve cash by usingcheap labor force.

orl sthird largest coal reserves:Third point is the organization member of AMC got the opportunity to have abundant reserve ofcoal from the country of Colombia. Since, Colombia held the worlds third largest coal reserves.

Its natural resources generated some of the highest quality thermal coal anywhere in the world.

The average composite of Colombia coal, for instance, had a heat value of 11,800 BTU perpound (6550 Kcal/kg), among the highest in the world. Its sulfur and ash content also exceededglobal standards.


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Government support:Government support or encouragement is very useful and important for any organization. It is agreat opportunities for any organization to extend their business not only within the country but

also outside the country. Here American Mining Company had those opportunities from thegovernment.When AMC moved from America and trying to emerge their business in Colombia.

The management of AMC has successfully earned their confidence. The government offerednumerous attractive investment incentives to AMC, including tax-free operations for the first tenyears, extremely cheap land holding Colombias best coal reserves, and subsidized infrastructuredevelopment. The construction of a modern seaport on the Caribbean coast, for example, wouldallow coal exports to be shipped to the United States within two days. The seaport with capacityto move 10 million tons of coal per year would be for the exclusive use of AMC. A new 200-kilometerrail link connecting the mine within the mainland to the coast would also be

constructed. Over 500 soldiers from the Colombia army would be continually posted for theprotection of the companysoperations and its workers.

With these incentives, AMC began construction on its workers. With these incentives, AMCbegan construction on its Colombian mine in 1994.

Advance Technology :American Mining Company is one of the top level companies. The company is also good with

their technologies.By using different type of technology AMC creates opportunities for higher

profit and sales.


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Threats

There are more than a few types of threats in American Mining Company. Those are

Violence :American Mining Company is one of the top level companies. They have moved from Americaand trying to emerge their business in Colombia.At some point in establishing the business inColombia the organization had to go through with some problem which became threat for them.Colombia is a violated place to work. Six union leaders killed by the AUC within three years,union leaders held one of the most dangerous occupations in Colombia.

In the spring of 2001, the AUC stopped an AMC company bus transporting mine workers totheir village. Two leaders of AMCs mine union were taken off the bus and killed execution

style.

The assassinated leaders had previously requested that AMC allow employees to spend the nightat the mine, due to the dangerous traveling conditions after dark. AMC refused to make thisaccommodation, stating that the mine was not equipped to house its workers.

The day after the assassinations, over 1,200 of the companys employees went on stri ke for threedays in protest. All production ceased.

Kidnapping :Colombia maintained the highest kidnapping rates of any country in the world. Both foreignexecutives and local factory workers were frequently held for ransom, often up to years at a time.Violent and disruptive acts on companies operations were commonplace and a significantdiscouragement to foreign investors.

Rebel guerilla groups dominated Colombias drug trafficking and kidnapping business. Although

the rebels primarily operated in sparsely populated areas outside the urban centers, kidnappingand other violent attack were routine in city centers. One tactic employed by the rebels was to

subcontract the kidnapping of foreigners and high profile executives to local street gangs inColombias major cities.

So to defend the kidnapping AMC demanded increased protection but the President wasconstrained by the lacking of trained soldiers and the rough, isolated terrain.


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Fuerzas Armadas Revolucionarias de Colombia FARC) attacks:

FRAC was Colombias largest and most dominant rebel groups, with an estimated 15,000 troops.

FARC attacked AMCs railroad a half dozen times within 1999 and 2000. The most recent attackdestroyed an entire locomotive and its shipment. AMCs mine pits were also subject to smallraids by guerrillas.

The companys operations on its infrastructure were severely impeded by these attacks. Thecompany was forced to operate only during the day as night operations were deemed to be toodangerous. FARC announced plans to impose a 10% tax on companies operating within areas

within its control.

AMC flatly refused to make any payments to the rebels, calling it blackmail. In response, therebels increased their attacks on AMC. Its athreat for the AMC organization.

Paramilitaries threats:Another threat to AMCs is paramilitaries.Although they didnt attack the company directly, theparamilitaries targeted the companys union workers in an effort to eradicate any potentialMarxist sympathizers.

Threats of neighboring country Venezuela) :American mining company faces problems or treats from in the interior of the country but alsoouter surface the country.Recent developments in the neighboring country of Venezuela alsotroubled the companys management .

\In November 2001; Venezuelas President Hugo Chavez announceda new law that consolidatedstate-control of the countrys oil industry. The government would have authority to makestrategic operational decisions and receive higher royalty payments. Private industry expertsdecried the action, stating that it would deter foreign investment. Business leaders called for anationwide strike to protest the law, and most businesses closed for one day to honor the strike.

FARC and ELN goals also included land redistribution and opposition to multinationals, AMCwould need to ponder whether it would be possible for Colombia to follow in its neighborspath.


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HR ISSUE

Human Resource management is an essential part for any organization. HR department dealswith the HR issue. Here, we will discuss about the HR issue of American Mining Company(AMC) and then we will talk about the reason behind to give focus on it.

Issue 1

There is no HR department in American Mining Company (AMC).

HR issues are particularly elementary factors for any organization. HR issues are aboutdetermining HR needs, hiring precise employees, designing work pattern, job analysis, train the

employees, analyze the work environment, rewarding employees, giving feedback, evaluatingemployees performance, creating positive work environment etc. Besides, HR departmentdetermine the salary standard considering both organization and employee sides.

Following the case, there is no integrated HR department. So, the organization lack behind on thefield of controlling, recruitment and monitoring. The organization should have HR department toperform better, increase productivity and deal with the human resource properly.

Issue 2

AMC should protect their employees on the working area from the attack of the rebel

groups.

Union leaders and employees are facing so many attacks and troubles from rebel groups. So,AMC should take proper steps to protect their employees from the attacks of the rebel groups.Its a HR issue because for a company employees are considered as an asset. Besides, if theemployees are not going to feel secure while doing their job, output wouldnt be satisfactory

enough.


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Issue 3

AMC should follow the rules and instructions of Colombia Government properly.

To have a well organized and effective diversified workplace, AMC should follow the rules andinstructions of Colombia Government properly. Though the organization has a diversified workforce but it does not followed by law of Colombia Government properly.

Under Colombian law, 80% of a companys employees were required to be Colombiannationals. AMC exceeded this percentage minimum, as the company rotated high- and mid-levelexecutives between its US headquarters and its Colombian operations. The mine and seaportworkers were exclusively locals. So, AMC should change it and must follow the government

law. And to have a proper diversified work environment its an issue to be considered.

Issue 4

AMC doesnt have any accommodation facility.

Following the case, With six union leaders killed by the AUC within three years. Union leadersheld one of the most dangerous occupations in Colombia. In the spring of 2001, the AUCstopped an AMC company bus transporting mine workers to their village. Two leaders ofAMCs mine union were taken off the bus andkilled execution style. The assassinated leadershad previously requested that AMC allow employees to spend the night at the mine, due to thedangerous traveling conditions after dark. AMC refused to make this accommodation, statingthat the mine was not equipped to house its workers.

According HRM rule, AMC is bound to take care of their employees safety and for that

considering the risky environment of the country, the organization is better to have

accommodation facility for the union members and other employees.


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Issue 5

AMC doesnt have any insurance policy for the employees.

Every organization should have insurance policy for employees. As there is a less security tocome to work because of chance of attack from the rebel groups, there is a high need of havinginsurance strategy for AMC.

Issue 6

There is no mention about any CSR (corporate social responsibility) activity in AMC.

Company can do so many CSR activities to make a bond with general people of Colombia andmake them its protection force. As foreign company, AMC needs a good word of mouth and agood image in Colombia. CSR activities can make the positive image of a company and alsothey can be used as an indirect publicity of a certain company. If AMC practices CSR activitieslike establishing fund, charity for poor and orphan children etc.

AMC should help the general people by doing some CSR activities, it should have a goodinfluence to general people and at the bad time of AMC or its employee, they should find thesegeneral people by their side. General people should be in support of AMC in future and protect

them from any unexpected issue as they can. So, AMC should involve itself in CSR activities.

Issue 7

AMC should have transportation facility.

AMC doesnt have any transportation facility. Its very risky for the employees to come to workand its not possible to give all the employee accommodation opportunity if the company wants.So, AMC need to provide transportation facility to get productivity and to care of human

resource.


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RECOMMENDATION

Though AMC is a very well known and successful organization, it has some problems regardingmanagement and other area. After evaluating the

HR issue, now its time for somerecommendations for the wellbeing of theorganization. At first, we have identified theproblems and depend on this recommendation isprovided. We believe that AMC can overcome itsproblems by following our suggestions.

In this section, first we mention WHAT are theexact problems we have identified and then wetalk about what our recommendations to solve theproblems one by one. We have also clarified WHY our given solutions are vital for thebetterment of the organization.

Problem no: 01


According to the HR issue and the case, AMC doesnt have HR department. To get rid of currentproblems like unprotected work environment, lack of proper management structure, less concern

on HRM etc the organization is in a need of HR department.

Recommendation no: 01

AMC should establish a well-organized and effective HR department.

HRM is the heart of an organization nowadays. Its become a fundamental thing for anorganization to have a HRD and consider it as assets. All most every organization nowadayshave HR department. Moreover, to get the right employees for the organization, the need of HRis like blood for human body. So, AMC should have HR department to cope up with thesituation.


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Justification

Human resource is the most essential resource for an organization because its assuredprofitability and HRD deal with it. HRD recruit, select, train employee and also assist them whatneed to do. Besides, monitor and evaluate employees performance time to time for better output.

For AMC being in multi-cultural situations, the organization requires to have strong HRD to runbusiness in a systematic way.

Under the HRD, AMC can recruit, select and train the right, responsible and loyal employees forthe company to deal with any sort of issue immediately and also with the current situation.Besides, HRD understand better how to utilize human resource and to deal with it.

Problem no: 02

AMC doesnt have satisfactory protection for their employees on the working area from

the attack of the rebel groups.

The employees of AMC suffered a lot from the destructive activities of the rebel groups. AMCdoes not provide employees security of their life even. This can be a major cause for AMCbecause if employees of this company do not get sufficient protection, they might leave the joband look for the other one.


AMC should take sufficient steps to protect their employees during working time from the

attack of the rebel groups. AMC can introduce policy like that there will be long fifteen

days working schedule without any holiday and then five days holiday.

AMC should personally hire security people for their protection. It should take help of moderntechnology to enhance its protection and privacy more. Top management should take propersteps to look after the safety of the company. They can make a deal with the Colombian

government. They might ask to the Colombian Government for the replacement of the companyin a safe territory or make the company area a military zone. They can also ask help to the USgovt. to solve the problem. Besides, AMC can talk with the rebel groups to come up with amutual understanding agreement to protect the employees from the attacks of the rebel groups.Moreover, AMC need to be strategic more to handle the situation such as long day workingschedule and after that a 5 or 1 week holiday.


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Justification

For any organization, its the responsibility to keep their employees in safety and provide them

with the protection they need to survive and do their job properly. If any company does not dothat, it might be a cause of employee turnover. And as we know that, employee turnover is anegative aspect for an organization. So, for the betterment of the organization, AMC shouldintroduce sufficient rules and regulations and take necessary steps to enhance the protection oftheir employees.

As it is the matter of terrorism, they must consult this matter with Colombian Government. It canask for Colombian govt. to make the company area under military zone and take necessary stepsto prevent this kind of attack. AMC can also take the help of Unicef and Interpol to solve thisproblem. It can also set their personal security force to have an extra protection for theiremployees. So, AMC can take these steps as soon as possible and save its employees and the

company.

AMC can strategically handle the situation which is the best way to save the employees from theattack of the rebel groups without hampering the productivity of the company.

Problem no: 03

AMC doesnt follow the rules and instructions of Colombia Government properly.

In the case, Under Colombian laws, 80% of a companys employees were required to beColombian nationals. AMC exceeded this percentage minimum, as the company rotated high-and mid-level executives between its US headquarters and its Colombian operations. The mineand seaport workers were exclusively locals. To have a proper diversified work environmentits an issue to be considered.


AMC should follow the rules and instructions of Colombia Government properly to have

diversified work force.

Diversified work force means combination of different employees in the work place. Havingdiversified work force is advantageous for AMC because its create opportunity for theorganization. Though AMC has diversified work force, it doesnt followed by the law of the

Colombia govt. properly. So, the company should follow the rules and regulation fully of thegovernment.


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Justification

For any country, government establishes laws to keep their nationals in a discipline. So, this isvery vital to maintain these laws for the wellbeing of the country as well as the nationals. So, as apart of Colombia, AMC should establish its workforce by following the rule of Colombian

Government. They should take 80% of a companys employees from Colombian national andrest of the 20% from the other nationals.

On the other hand, if any company remain successful to control the diversified workforce, it isobvious that the company will earn success because an organization with multi-cultural value isalready rich in ideas and creativity. So, AMC should set up an effective diversified workforcebut following the law of Colombian Govt.

Problem no: 04


From the case, we get to know that six union leaders killed by the AUC within three yearsbecause union leaders followed the communist ideology and rebel groups follows Marxistideology, union leaders held one of the most dangerous occupations in Colombia. Union leadersasked for an accommodation only at the night time because it becomes so dangerous to travelafter dark. But AMC refused to give them this right.


AMC should have accommodation facility.

AMC should provide their employee with the accommodation facility to stay at night becauseits the duty of the organization to protect its employee from any harm which is connected withthe company image.

Justification

Its not possible to give residential facility to all the employees but the company can at least givethis facility to the top level employees and the union members. If the company does not do that,it may face problem regarding getting qualified employees. So, for the welfare of the companyand to save its employee from the offensive rebel group, AMC should provide anaccommodation facility to its employees.


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Problem no: 05


There is less security to come to work for AMC because of chance of attack from the rebelgroups. So, there is a high need of having insurance strategy for AMC.


AMC should have insurance policy for the employees.

AMC should introduce insurance policy for the employees not only to ensure their future butalso to prove that the company care for their employees.

Justification

As the working circumstances of AMC is not save enough so to ensure the presence of theemployees in the work place company must have insurance policy. Besides, for any company,having insurance policy becomes fundamental thing nowadays.

Problem no: 06

The resources and assets are often attacked by the rebel groups.

AMC is suffering from the problems created by the rebel group. For the unlawful and offensiveactivities of rebel groups, not only the life of employees of AMC is getting worse, but also theproductivity and other financial and business issues are facing obstacles. The unwanted activitiesof the rebel groups are becoming the major cause of disturbance in a maintaining a healthybusiness for AMC.


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AMC can discuss with the rebel groups. And also can ask protection from the Colombian

govt. and US authority.

AMC may talk with the rebel groups to come with a better solution. AMC should providesufficient safety to its employees. AMC should personally hire security people for theirprotection. It should take help of modern technology to enhance its protection and privacy more.Top management should take proper steps to look after the safety of the company. They canmake a deal with the Colombian government. They might ask to the Colombian Government forthe replacement of the company in a safe territory or make the company area a military zone.They can also ask help to the US Government to solve the problem.

Justification

To keep employees safe and to provide maximum protection what they need for their survivaland do their job in a good environment is the major responsibilities for a company. If anycompany does not do that, it might be a cause of employee turnover which is a negative featurefor an organization. So, for the betterment of the organization, AMC should introduce sufficientpolicy and set of laws and take necessary steps to enhance the protection of their employees.AMC must consult this matter with Colombian Government. Organization can request

Colombian govt. to keep the company area under military zone and take necessary steps to stopthis kind of attack. AMC can also take the help of UNICEF and INTERPOL to solve this crisis.AMC should set their personal security force to have an extra protection for their employees.They can request Colombian Government to select some military officer and order them toprovide highest security among AMCs employees. So, AMC can take these steps as soon aspossible and save its employees and the company.


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Problem no: 07

AMC doesnt have any transportation facility for the employees.

According to the case, the political environment and working area of Colombia is risky. So, for

the employees security, AMC should have transportation facility for the employees.


AMC should have any transportation facility for the employees.

As itsnot possible to give all the employees transportation facility, AMC should havetransportation facility. Besides, AMC can ask for govt. support on this purpose. It can be

financial.

Justification

Employees are assets for any organization. If AMC failed to protect their employees as becauseof absence of transportation facility, company may face shortage of employees in near future.That why, AMC need to provide transportation facility to the employees.


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mplementation1. AMC should establish a well-organized and

effective HR department.

What is the problem?


According to the HR issue and the case, AMC doesnt have HR department. To get rid ofcurrent problems like unprotected work environment, lack of proper management structure, lessconcern on HRM etc the organization is in a need of HR department.

What is the solution?

Human resource is the most essential resource for an organization because its assuredprofitability and HRD deal with it. HRD recruit, select, train employee and also assist them whatneed to do. Besides, monitor and evaluate employees performance time to time for betteroutput. For AMC being in multi-cultural situations, the organization requires to have strong HRDto run business in a systematic way.

Under the HRD, AMC can recruit, select and train the right, responsible and loyal employees forthe company to deal with any sort of issue immediately and also with the current situation.Besides, HRD understand better how to utilize human resource and to deal with it.


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How should the implementation take place?

Premise 1: Define the basic organization design choices

For the last 30 years, organizations have been designed along two dimensions that go by a

number of names: centralized, decentralized, matrix.

When AMC will start a HR department then they have to make sure they have an HR Policy ifnot then they need to identify areas of which Human Resources work on:

Recruitment Pre & Post Recruitment Manpower ManagementPayment & Benefit Increments Payment Payroll ManagementPension Management Overtime Payments Attendance ManagementTraining & Development,

Identifying Training requirementFinding vendors for training External & Internal & in house Assessingvendors Assessing Training Identifying Training Needs of employees Identifyingcompetences Creating individual development plansPerformance Appraisal Management, Creating Suitable Performance AppraisalSystem for the organization Ensuring Educating employees on itManaging the process i.e. distribution, completion of the appraisal, sendingappropriate reminders, holding appraisal meeting, Managing GrievancesHR Administration,Arranging for employee travels internal & external

Arranging VisaArranging approvals with labor lawArranging training RegistrationsArranging for hotel accommodationsArranging HR Events (presentations, meetings, conferences)Ensure Policy Development

AMC need have a job description of their eoployees and cascade the content therein for theothers incorporating their main areas & duties contained in the above list. Which will alsocontain educational requirement ,their grade, their salary

Where to implement it?Place is particularly very important factor for the AMC as they are not operating beyond its owncountry border. We strongly recommend the company to develop this strategy in Colombia attheir company main office at first as soon as possible.


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Who should implement this?

Creating a well organized HR department is a part of the company decisions, thus would beimplemented by the company owners itself. We all know that for implementing any plan intothe reality the person plays the vital role for its success. No plan can be successful if it is not

implemented in proper manner by the right person. It will be best implemented by the CEO asper the authorization of the directors.

When should it be implemented?

Time is another crucial factor in the implementation process. Implementing any plan withoutproper timing has no value. So the AMC must implement the plan within a specific period oftime. They must target a date within which they will create their HR department. We suggest thatit should be done as soon as possible. They need it for their survival and good image.

2. AMC should take sufficient steps to protect their

employees during working time from the attack of the

rebel groups. AMC can introduce policy like that there

will be long fifteen days working schedule without any

holiday and then five days holiday.


AMC doesnt have satisfactory protection for their employees on the working area from

the attack of the rebel groups.

The employees of AMC suffered a lot from the destructive activities of the rebel groups. AMC does notprovide employees security of their life even. This can be a major cause for AMC because if employeesof this company do not get sufficient protection, they might leave the job and look for the other one.


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For any organization, its the responsibility to keep their employees in safety and provide them

with the protection they need to survive and do their job properly. If any company does not dothat, it might be a cause of employee turnover. And as we know that, employee turnover is a

negative aspect for an organization. So, for the betterment of the organization, AMC shouldintroduce sufficient rules and regulations and take necessary steps to enhance the protection oftheir employees.

As it is the matter of terrorism, they must consult this matter with Colombian Government. It canask for Colombian govt. to make the company area under military zone and take necessary stepsto prevent this kind of attack. AMC can also take the help of Unicef and Interpol to solve thisproblem. It can also set their personal security force to have an extra protection for theiremployees. So, AMC can take these steps as soon as possible and save its employees and thecompany.

AMC can strategically handle the situation which is the best way to save the employees from theattack of the rebel groups without hampering the productivity of the company.


the solution requires the safety of their employee. They can take some several steps to get rid

of terrorism. Which can ensure their employee a safe working environment.

Workers are the most important part of a company. If they dont work the company cannot grow bigger. But when a worker work in a company he want his life safety. AMC cangive them life insurance so that they might feel safe. So the first step is when hiring aemployee AMC will give insurance facility in the agreement.

Then AMC will get help from Colombian govt and then bring militaries so that theterrorists can not attack their employee.

Where to implement it?

As AMC is facing security problem in Colombia. So they should implement it in their Colombiamining sight.


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The CEO along with the help of the HR department must implement this plan. All employee

needs to participate in it. Support managers, supervisors, human resources and affirmative actionprofessionals, and other staff in their efforts to develop and promote safety policies and programsthroughout the organization. Colombian Government also can implement this problem bymaking the company area under military zone and take necessary steps to prevent this kind ofattack


As this problem can cost them of high turnover of their employee. So we recommend that AMC

should take action immediately.

3. AMC should follow the rules and instructions of

Colombia Government properly to have diversified

work force.

What is the problem?AMC doesnt follow the rules and instructions of Colombia Government properly.

In the case, Under Colombian laws, 80% of a companys employees were required to beColombian nationals. AMC exceeded this percentage minimum, as the company rotated high-and mid-level executives between its US headquarters and its Colombian operations. The mineand seaport workers were exclusively locals. To have a proper diversified work environment

its an issue to be considered.


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For any country, government establishes laws to keep their nationals in a discipline. So, this is

very vital to maintain these laws for the wellbeing of the country as well as the nationals. So, as apart of Colombia, AMC should establish its workforce by following the rule of ColombianGovernment. They should take 80% of a companys employees from Colombian national and

rest of the 20% from the other nationals.

On the other hand, if any company remain successful to control the diversified workforce, it isobvious that the company will earn success because an organization with multi-cultural value isalready rich in ideas and creativity. So, AMC should set up an effective diversified workforcebut following the law of Colombian Govt.


The company can rehire employee. As 80% of the employee of a company should followColombian law. So company can hire 80% of their employee from Colombian nation. Andanother 20% from other nation.

AMC can train their old other nations employees from Colombian employees about the laws ofColombia govt. so all of the employee will follow Colombian law.

They can call Colombian militaries for the safety of their employee.


Place is particularly very important factor for the AMC as they operate beyond colombiancountry border. We strongly recommend the company to develop this strategy in colombia attheir company at first as soon as possible.


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The HR department of the company, the CEO and all other employees should do this worktogether to implement it.


When working in a other country companies should follow the rules of the country government.AMC is not following Colombian govt rules, so they should implement it as soon as possible

4. AMC should have accommodation facility.



From the case, we get to know that six union leaders killed by the AUC within three yearsbecause union leaders followed the communist ideology and rebel groups follows Marxistideology, union leaders held one of the most dangerous occupations in Colombia. Union leadersasked for an accommodation only at the night time because it becomes so dangerous to travelafter dark. But AMC refused to give them this right.


Its not possible to give residential facility to all the employees but the company can at least givethis facility to the top level employees and the union members. If the company does not do that,it may face problem regarding getting qualified employees. So, for the welfare of the companyand to save its employee from the offensive rebel group, AMC should provide anaccommodation facility to its employees.


Businesses that evaluate their employment practices according to the following guidelines canensure they develop and implement the accommodation problem of the employee.

The company can make them building inside the company area. A mining sight is verybig. If the employees can be accommodated inside the area so they can feel safe, they cantake rest is their home and can work well for the company.


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It should be implemented throughout the organization unless the issue of dissatisfied employeesis resolved the company might risk losing their competitive advantage


Every plan should be implemented by the right person, because no plan can be successful if it isnot implemented in proper manner by the right person.

The CEO of the company with the help of the top management can implement this problem.


The plan should be implemented on the existing and previous employees as soon as possiblebecause of the rising dissatisfaction of the employees regarding the sudden downsizing maycause great harm to the company image.

5. AMC should have insurance policy for the

employees.



There is less security to come to work for AMC because of chance of attack from the rebelgroups. So, there is a high need of having insurance strategy for AMC.


As the working circumstances of AMC is not save enough so to ensure the presence of theemployees in the work place company must have insurance policy. Besides, for any company,having insurance policy becomes fundamental thing nowadays.


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The recommendation should be implemented in following way:

Communicate the decision

The first step to the implementation of such a sensitive and important decision requires theconsent and knowledge of the employees concerned. Employees all ranks and class absolutelydetest anything related to a decrease in their compansation. What the management needs to do isto communicate their problems and justify the cause reason for such an action. If the employeescan be convinced that in the long run these steps are going to be beneficial to them then they willco-operate with the authority more readily.

It is better to implement the plan first on the top management and then after a few

months on the low paid staffs to avoid any discriminatory conflictsThe junior level staffs are always more or less defensive towards life insurance or any suchmeasures. What the company can do is, introduce this plan first on the higher level managementand then gradually move down the hierarchy. In that way the lower level managers wont feelexploited as they can well perceive it as a company emergency situation.

Assure the employees going through insurance can make their future secure

Assure the employees that if they are not feeling safe in AMC company but the life insuranceopportunity that the company is giving them as a compensation can secure their future. If they

face problem in their safety the insurance company will give them their full money back.


The place where the plan would be implemented is also an important issue for the AMC.However, insurance is a very important consideration when it comes to such a decision. Thus itshould be implemented throughout the organization so that nobody feels that other was treatedmore favorably.


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Every plan should be implemented by the right person, because no plan can be successful if it is

not implemented in proper manner by the right person.

Giving insurance as a compensation is a HR department issue. Before starting the process theAMC must choose the right person for the implementation. The CEO along with the help of thetop management and the HR department must implement this plan.


Time is another crucial factor in the implementation process. Implementing any plan withoutproper timing has no value. So the AMC must implement the plan within a specific time. Theymust target a date within which they will operate. We suggest that it is done as soon as possible.They need it for their survival in the economic crisis the world is facing today. If it is too late theplan might not be effective anyway.

Documents

Hrm380 Tua Amc Case