Office Equipment Company (Oec)

Study Case Summary

Office Equipment Company (OEC) manufactures a wide variety of office equipments such as copying machines, recording machines, mail scales and paper shredders in eight different countries and distributes and sells products worldwide. It has no manufacturing facilities in Peru but has been selling and servicing there since the early 1970s. OEC first tried selling in Peru through independent importers but quickly became convinced that in order to make sufficient sales it needed to have its own staff there.

Despite Peru's political turmoil, OEC'S operation enjoyed good and improving sales and profitability. OEC’s first factory in Peru was scheduled to begin early 1999. This plant will be supervised by a U.S technical team and a U.S expatriate will be assigned to direct the production. This director will report directly to OEC's U.S. headquarters on all production and quality-control matters but will report to the managing director in Peru on all other matters, such as accounting, finance, and labor relations.

In 1997, the managing director of OEC (who is U.S national) of the Office Equipment Company (OEC) in Lima, Peru announced suddenly that he would leave the company within one month. The company needs to find a replacement to fill the vacant position in short period. OEC, by policy, will replace the exiting managing director with an internal candidate. The company employs a combination of home-, host-, and third-country nationals in top positions in foreign countries, and managers commonly rotate among foreign and U.S. locations. OEC deems that international experience is crucial in top corporate position appointments. OEC does not have much time to fill in the position of the managing director. The sales and service facility in Peru reports to a Latin American regional office located in Coral Gables, Florida. A committee at this office, charged with selecting the new managing director, quickly narrowed its choice to five...