AMOCO FINLANDBY

THE HELSINKI SCHOOL OFECONOMICS

INTERNATIONAL BBA PROGRAM

JUNE 1996

AMOCO CORPORATION

FINLAND IN FIGURES

• Population: 5 Million

• Age Structure: 0-14 yrs15-64 yrs65 yrs & over

19%67%14%

• Languages: FinnishSwedishSmall Minorities

93,5%6,3%0,2%

• Economy:- Highly Industrialized- Largely Free Market Economy

• General- EU-Member Since January 1995- Per Capita Output Two-thirds of the US Figure- Unemployment Rate Approx. 18%- Inflation Rate Approx. 1%

JOB ADVERTISEMENTS

• SHOULD INCLUDE:

- INFORMATION ABOUT AMOCO CORPORATION

- INFORMATION ABOUT AMOCO FINLAND

- REQUIREMENTS FOR EACH POSITION

- MAIN DUTIES OF EACH POSITION

• APPEARANCE

- AMOCO LOGO IN EACH AD

- OVERALL CONSISTENCE

- NOT TOO DETAILED

AMOCO CORPORATION

PERFORMANCE APPRAISAL

• PERFORMANCE APPRAISAL IN FINLAND

- NOT VERY COMMON

- GREAT EMPHASIS ON APPRAISALS IN TRAINING

- EMPLOYEES NOT USED TO PERFORMANCE APPRAISALS

• TRAINING

- START FROM THE VERY BASICS

- STRESS OBJECTIVITY FOR EVALUATOR'S

- STRESS OPENNESS TO EVALUATION FOR PEOPLE BEING EVALUATED

• METHODOLOGY

- MBO, MANAGEMENT-BY-OBJECTIVES

- COMBINATION OF CEO, SUPERVISOR, AND SUBORDINATE

APPRAISALS AS WELL AS PEER AND SELF-EVALUATIONS

AMOCO CORPORATION

PERFORMANCE APPRAISAL

• APPLICATION IN PRACTICE

- FOLLOW AMOCO USA's SYSTEM AS A GUIDELINE

- FORMAL EVALUATIONS IN 6 MONTH INTERVALS

- DAILY FEEDBACK

- UPDATE JOB DESCRIPTIONS

- SET SPECIFIC OBJECTIVES

• MOTIVATING EMPLOYEES

- COMMITMENT

- APPROVAL

- PREPAREDNESS

- TRUST

- FAIRNESS

AMOCO CORPORATION

TRAINING

• INTRODUCTION

- HUMAN RESOURCE TRAINING, ESSENTIAL PART OF SUCCESS

- TRAINING, A CONTINUOS PROCESS, SET-UP PHASE, WIN OR LOSE

- LOYALTY, COMMITMENT AND HIGH QUALITY SERVICE

- CUSTOMER SERVICE ATTITUDES VERSUS CUSTOMERS' EXPECTATIONS

• ORIENTATION

PURPOSE:

- ORGANIZED INTRODUCTION TO THE AMOCO CULTURE AND TASKS

- SOCIALIZATION:

TOP LEVEL

- FOUR (ONE) WEEK TOUR IN THE USA

MIDDLE MANAGEMENT AND ENTRY LEVEL

- FOUR (ONE) DAYS BY ONE'S SUPERIOR AND HR DEPARTMENT

- GUEST SPEAKER FROM THE USA (SET UP PHASE)

AMOCO CORPORATION

TRAINING

• ORIENTATION CONT.

FRANCHISEE

- AMOCO SPIRIT, THE COMMON GOALS BY HR MANAGER AND DISTRICT

MANAGERS

• TRAINING

- KSA OF PERSONNEL HIGH

- SIMPLE ORGANIZATION

- SMALL NUMBER OF PERSONNEL

- HR DEPARTMENT RESPONSIBLE

- SUBJECTS AGREED UPON WITH SUBORDINATES

- LIMITED RESOURCES, TRAINING OUTSOURCED

- TEAM ORIENTED TRAINING METHODS

TOP MANAGEMENT LEVEL

- FORMAL MEETING QUARTERLY

- DISCUSSION OF PROBLEMS ENCOUNTERED AND SOLUTION IDEAS

- US AMOCO ANNUAL AUDITION

AMOCO CORPORATION

TRAINING

• TRAINING CONT.

MIDDLE MANAGEMENT AND ENTRY LEVEL

- SEMIANNUAL TRAINING AFTER PERFORMANCE APPRAISAL

- EMPHSISION ON TEAM-WORK

- STARTING LEVEL TEST

- FOLLOW-UP WITH AGREED MEASURES

- THEMES VARY (CUSTOMER SURVEYS, GENERAL FEEDBACK)

FRANCHISEE

- ORGANIZED AND LEAD BY DISTRICT MANAGER AND HR DEPARTMENT

- DECIDE COMMON ACTIONS TO IMPROVE SALES AND SERVICES

AMOCO FINLAND, ONE OF A KIND

- HARD TO FIRE PEOPLE

- COSTS OF EMPLOYMENT HIGH

- SERVICE CULTURE IS POOR

- HARD TAXATION

- EXCELLENT FINNISH EDUCATION SYSTEM

AMOCO CORPORATION

COMPENSATION

TOP MANAGERS:

- SALARY GRADES 10-13- BASIC MONTHLY SALARIES PLUS A BONUS BASED ON PERFORMANCE.

CEO'S SALARY NEGOTIATED INDIVIDUALLY.

MIN. MID. MAX.

13 69000 90800 117000

12 61000 79000 98000

11 53000 69000 85000

10 47000 61000 75000

(U.S.D. ANNUAL)

AMOCO CORPORATION

COMPENSATION

MIDDLE MANAGERS :

- SALARY GRADES 8-9- BASIC MONTHLY SALARIES PLUS A BONUS BASED ON PERFORMANCE.

MIN. MID. MAX.

9 41000 53000 650008 36000 46000 57000

(U.S.D. ANNUAL)

AMOCO CORPORATION

COMPENSATION

• ENTRY LEVEL MANAGERS:

- SALARY GRADE 7

- BASIC MONTHLY SALARIES PLUS A BONUS BASED ON PERFORMANCE.

MIN. MID. MAX.7 31000 40000 50000

(U.S.D. ANNUAL)

AMOCO CORPORATION

PROMOTION POLICY

• RECRUITMENT WITHIN THE ORGANIZATION

- EMPLOYEE MOTIVATION

- COMMITMENT

- ENTHUSIASM

• PROMOTION BASED ON MERIT

- BOOST EMPLOYEE MOTIVATION

- MOST QUALIFIED PEOPLE ON THE TOP MANAGEMENT

• REGULAR PERFORMANCE APPRAISAL SYSTEM

- HOW EMPLOYYES CONDUCT THEIR WORK

- HOW EMPLOYEES CAN IMPROVE

• FEEDBACK

- RECOGNIZING WEAKNESSES

- RECOGNIZING AREAS OF IMPROVEMENT

AMOCO CORPORATION

COMPENSATION

PAY FOR PERFORMANCE

BASE SALARY PLUS A

0 – 30% BONUS

AMOCO CORPORATION

THE SELECTION PROCESS

• THE PROCESS

- APPLICATION FORM

- INITIAL INTERVIEW

- EMPLOYMENT TESTS

- BACKGROUND INVESTIGATION

- PRELIMINARY SELECTION

- SUPERVISORY INTERVIEW

- MEDICAL EXAMINATIONS

- FINAL HIRING DECISION

• QUALITIES AND SKILLS SOUGHT

- INTEGRITY AND ETHICS

- ANALYTICAL SKILLS

- COMMUNICATION SKILLS

- INTERPERSONAL SKILLS

- TEAMWORK SKILLS

- FUNCTIONAL SKILLS

AMOCO CORPORATION

CODE OF ETHICS

• PROMOTE AMOCO TEAM SPIRIT BY SUPPORTING COMMON GOALSAND OBJECTIVES.

• ENCOURAGE THE DEVELOPMENT OF SKILLS OF EACH INDIVIDUAL.

• EQUAL TREATMENT OF EMPLOYEES AND CUSTOMERS.

• ENCOURAGE ECONOMICAL AND EFFECTIVE USE OF RESOURCES.

• MAINTAIN LOYALTY TO AMOCO AND PURSUE ITS OBJECTIVES INWAYS THAT ARE CONSISTENT WITH ALL STAKEHOLDERS.

• SUSTAIN THE CONFIDENTIALITY OF BPAMOCO PRIVILEGEDINFORMATION.

• PROMOTE POSITIVE PUBLIC IMAGE BY BEHAVIOR.

AMOCO CORPORATION

ORGANIZATIONAL GOALS

• GOALS

- TO PROVIDE SERVICE WITH CONSIDERATION OF ENVIRONMENT ANDETHICS.

- TO ADOPT TO ECONOMICAL AND ENVIRONMENT DEVELOPMENT.

- TO ACQUIRE A REPUTATION FOR EXCELLENT, CUSTOMER FRIENDLYSERVICE.

- TO OFFER HIGH QUALITY PRODUCTS.

- TO GAIN COMPETITIVE MARKET SHARE IN FINLAND BY LOCALIZINGAMOCO SPIRIT BOTH INTERNALLY AND EXTERNALLY

• POLICIES

- PROMOTION OF INTRENAL RELATIONS

- PROMOTION OF EXTERNAL RELATIONS

- CRISIS MANAGEMENT

- MANAGEMENT BY OBJECTIVES

- FLUENT INFORMATION FLOW AND NETWORKING

AMOCO CORPORATION

FACILITY MANAGER

• ENSURES CUSTOMER SATISFACTION

• ENSURES AMOCO'S OPERATING POLICIES

• MONITORS ENVIRONMENT AND CLEANNESS

• ORDERS MERCHANDISE

• CONDUCTS MINOR MAINTENANCE

AMOCO CORPORATION

DISTRICT MANAGER

• QUALITY CONTROL AND SERVICE EVALUATION

• RESPONSIBLE FOR THE LOGISTICS

• LOCAL MARKETING AND ADVERTISING

• SEARCHES FOR NEW LOCATIONS AND FRANCHISEES

• TELECOMUNICATES WITH AMOCO

• HEADQUARTERS IN HELSINKI

AMOCO CORPORATION

HUMAN RESOURCE PLANNING NEEDS

Team #2 report:Seija TähtinenMinna VesterinenElisa TorkkeliMarcus GrüblMartti Luhtala

I EMPLOYMENT FORECASTING

Station workers

- High technology stations operate with minimum amount of employees- three eight-hour shifts; small stations 2 persons per shift in the morning and daytime

and 1 working the night shift; larger stations 3-5 persons per shift- double staff during weekends and rush hours- total amount of workers employed by one station four times the amount of workers

per shift due to absenteeism, vacations, and days off required by law- high turnover due to large number of young, part-time workers (2/5 of the work

force)

Franchisees

- One franchisee can own one or several stations- In case the franchisee does not operate the station, there should be a station manager who

works under the supervision of franchisee- When Finland joined to the EU the effect of this was the new law of enterprising which

provides greater freedom for entrepreneurs- In Finland the main problem is to find new, competent and motivated franchisees

District managers

- In the beginning when the amount of station is small there should be only one or twodistrict managers to coordinate the operations

- The final goal is to have one district manager for ten stations, however depending onthe organizational growth

Top level management

- President of Operations and Vice Presidents of Sales/Marketing, Finance and HRMreport to CEO

II SUPPLY ANALYSIS

Employment situation in Finland

- High unemployment rate due to recent recession (17,8 %)- Unemployment rate is highest among young and uneducated people but it also exists

among highly educated people- State subsidy for employing flill-time workers and municipal subsidy for providing

young (15 -25) unemployed people a part-time, summer job- EU subsidies for remote areas- It is expected that unemployment rate is going to remain over 15% for at least next

five years

Labor unions (Cultural Diversities Team presented this)

- About 90 % of work force are unionized in Finland- Agreements on terms of working are highly standardized- Unions have lot of power concerning layoffs, compensation and working hours

III ORGANIZATIONAL CLIMATE (Eija Tynkkynen, HRM manager covered this inher introduction)

- Amoco cares about their workers and guarantees a secure working place with goodopportunities for self-development

- Good service with Amoco smile- Create good American team spirit and style with motivating environment