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American Mining Company

Letter of Transmittal
23rd October, 2013
Tajuddin Ahmed
Faculty Member
School of Business
North South University
Dhaka- 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 have
worked with utmost enthusiasm, since the experience has augmented and assisted us
integrate 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 on
Compensation Theory during further course works. We would be delighted to furnish
you with any details, if required.
Thank You
Yours sincerely,

Group E
Hrm 380.1

Name

Id number

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

Executive Summary

signature

American Mining Company


AMC is one of the leading coal mining companies in USA that had finished moving nearly all of
its 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 providing
high quality coal, reliable delivery and excellent service. The advantage which was like icing on
the cake was that Colombian government was extremely eager to provide AMC with lucrative
investment incentives because the government was hit by enormous high public debt and 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 by Colombian
government included tax-free operations for the first ten years, extremely cheap land holding
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 exclusive
use of AMC. Over 500 soldiers of Colombian army would be continually posted for the
protection of companys operations and workers. Few investment restrictions applied to foreign
companies wishing to start business operations in Colombia. 100% foreign ownership was
permitted for most sectors with exceptions for national security, hazardous waste product, and
some 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 be
Background
Colombian national. AMC exceeded this percentage minimum.

TABLE OF CONTENT
1

President Pastrana was elected in 1998 with the mandate to bring an end to the violent clashes
between Colombian
ThemeArmy, Marxist rebel groups and right wing paramilitary forces. Despite
intense efforts of Pastrana administration to negotiate with the rebels, kidnapping, assassinations,
7 up. Colombia maintained the highest rate
and other acts of terrorism showed no signs of letting
of kidnapping compared to any other country in the world. Foreign executives as well as local
factory workers were often held for ransoms. The two largest group, FARC and ELN, controlled
more than 40% of the countrys territory. In a controversial effort to initiate negotiation President
PastranaMain
carved Issue
out 42,000 square kilometers of remote jungle to be decade as demilitarized
zone. This allowed FARC to freely train its soldiers
8 and cultivate cocaine.

In the mean time May 2000, the US congress sent Colombian government $1.3 billion aided
Analysis
packageSWOT
to confront
the rebel groups and drug problems. FARC became furious and against this
interference. Operating within one of the worlds9most volatile regions, AMCs operations were
frequently in the crossfire between the warring Marxist rebels and the paramilitaries. The
paramilitaries were another threat to AMC. 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, the rebels increased their attacks on AMC. After
Human recourse Issue
the assassinations a strike was called for three days and all productions were seized. AUC stated
21 follow the Marxist ideology.
that union leader will be their target as long as they

Recommendation
24

American Mining Company

Background

American Mining Company


This case focuses on the ethical dimensions of a decision an American-based company must
make 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 is
allowed under the Foreign Corrupt Practices Act? and (3) should a company pay fees to terrorist
organizations in order to continue to operate? Background information is given about the
company and its move to Columbia. Additional information is provided about the Colombian
business and political environments as well as the obstacles facing the company. It has been also
talked about both ethics and international business methodology. Although not the focus of the
case, the case provides information useful to the readers who desire to cover political risk issues
of 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 has
changed. Like the conquistadors, foreign companies today are seeking the fabled deposits of ores
and minerals found in the western cordillera, the Andes chain. Mining technology has
dramatically changed since the Spanish first reached South America: hand-dug tunnels have been
replaced by open pits, and pickaxes supplanted by heavy machinery, explosives, and gargantuan
dredgers. These mining methods, at times taking place in the heart of the Amazon, have had
devastating 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% of
global investment in metallurgical prospecting goes to South America, as well as 27% of all gold
exploration. The area is particularly appealing to foreign investors because it contains a huge
supply of cheap labor and because its mineral reserves are relatively untouched compared to the
rest of the world. Although metal prices slumped from 2006 to 2009, they have since surged and
we are now witnessing mining companies scrambling to invest. Analysts predict that in 2011 and
2012 alone, at least USD 29 billion of mining investment will be funneled into the two mining
leaders of the area, Chile and Peru. In Colombia, the mining sector constituted 4.5% of GDP and
provided 24.8% of the countrys total exports, or USD 7.3 billion dollars, in 2009. Mining
continues to be a significant source of foreign investment and resource development for
Colombia 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 processes
practiced by both domestic and foreign-owned operations. Former President lvaro Uribe
encouraged Seguridad Democrtica, a policy that sought to lower crime and to dismantle the
Fuerzas Armadas Revolucionarias de Colombia (FARC) guerillas as well as the former rightwing vigilante organization, Autodefensas Unidas de Colombia (AUC). As it turned out, the
decrease in crime rates, while impressive, pertained mainly to the population living in urban

American Mining Company


areas. As paramilitary groups and guerrilla fighters were pushed out of urban streets, they
subsequently 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 assassinations
and 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 regulations
and the land is often forcefully taken before it is exploited. Since Santos came into office, the
government has shut down 56 illegal mines and 573 people have been arrested, but the problem
persists 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 of
its 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 providing
high quality coal, reliable delivery and excellent service. By moving to Colombia, Mine
Company provided three of numerous advantages for AMC such as type of payment for worker
where lower wages provided for worker in Colombia rather than US mine workers, Colombia the
worlds largest coal reserve and the government offered for protection of the company operation
and its employees. However, established the company in Colombia so many obstacles that
American mining Company faced such as business and political environment problems such as
security, attack the company , worker and foreigner investor for growth the development
prospects.

In Colombia, workers were willing to work for much longer hours and in more dangerous
conditions. Another advantage for AMC to move its operations to Colombia was that the country
held worlds third largest reserve of coal. Its natural resources generated some of the highest
quality thermal coal compared to anywhere in the world. Finally, the advantage which was like
icing on the cake was that Colombian government was extremely eager to provide AMC with
lucrative investment incentives because the government was hit by enormous high public debt
and 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 by
Colombian government included tax-free operations for the first ten years, extremely cheap land
holding 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 exclusive
use of AMC. Over 500 soldiers of Colombian army would be continually posted for the
protection of companys operations and workers. With these incentives, AMC began construction
on its Colombian mine in 1994. By 1995, the company began initial production capacity of 3
million tons per year. AMC controlled every step of the production and shipment process.

American Mining Company


Planned expansion by the year 2004 would increase production to more than 10 million tons 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 in
Colombia. 100% foreign ownership was permitted for most sectors with exceptions for national
security, hazardous waste product, and some real estate developments. State-owned industries
were being privatized significantly since the early 1990s. Noteworthy changes to the countrys
accounting and legal procedures had also taken place, making business transactions relatively
more transparent.

In addition, Colombian President Andres Pastrana was pro-U.S. investment. Under Colombian
law, 80% of a companys employees were required to be Colombian national. AMC exceeded
this percentage minimum. The mine and seaport workers were exclusively locals. Coal was
Colombias 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 fully
privatized by 2006. Carbocol had a 50% stake in the Cerrejon Norte Project, which was Latin
Americas 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 the
country.

President Pastrana was elected in 1998 with the mandate to bring an end to the violent clashes
between Colombian Army, Marxist rebel groups and right wing paramilitary forces. Despite
intense 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 common
to have violent and disruptive acts on companies operations and it was significantly
discouraging to foreign investors. Rebel guerilla groups dominated Colombias drug trafficking
and kidnapping business. The two largest group, FARC and ELN, controlled more than 40% of
the countrys territory.

Colombias largest and most dominant rebel group was the Fuerzas Armadas Revolutionaries de
Colombia (FARC) with an estimated 15,000 troops. FARC pursued Marxist ideology through

American Mining Company


violent measures and strongly advocated redistribution of wealth, land reforms, and expulsion of
foreign multinational corporations. Using profit from kidnapping and drug trafficking FARC
provided its troops with better training, better equipments, etc and they were far better off than
government soldiers who were reluctant to fight against these rebel troops.

In a controversial effort to initiate negotiation President Pastrana carved out 42,000 square
kilometers 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 nomans 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, but
primarily activities involved kidnapping and attacking countrys energy and petroleum
infrastructure. It relied on guerilla tactics to blow-up oil pipelines and power lines, in addition to
blackmailing multinationals. The government also gave ELN a demilitarized zone of 5,000
square kilometers to initiate peace talk. One month after the plane incident, ELN kidnapped over
100 churchgoers from the central city of Cali. Negotiations in Geneva, Switzerland, throughout
the summer of 2000, however, failed to secure the release of ELN hostages. It wasnt until
months later, after government antiterrorist troops closed in on the group, that the hostages were
released. 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 suspected
sympathizers by brutal tactics. AUC did not target multinationals directly. In fact opposite groups
contended that US companied actually benefitted from paramilitary actions. Although AUC was
officially illegal, the paramilitary were believed to unofficially coordinate attacks with the
Colombian army. Para membership was estimated to range between 5,000 to 11,000 highly
disciplined soldiers led by the charismatic but elusive leader, Carlos Castano. Although the AUC
was officially illegal, the paramilitaries were believed to unofficially coordinate attacks with the
Colombian army. President Pastrana cut all official government ties to the AUC, but the
paramilitary group remained a primary source of intelligence for the Colombian Army. Castano
publicly stated that the AUC depends on a 60% tax imposed on cocaine producers to finance its
war against the rebels. Like FARC and ELN, the paramilitaries were better equipped, better
trained and motivated than their government army counterparts.

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

American Mining Company


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

President Pastrana 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 passed with the objective of reducing cocaine production. US Congress
members also acknowledged that American companies would directly benefit, as they had a
strategic interest in a stable Colombia. AMCs very public support of US military aid and that of
Pastranas administration further aggravated the FARC rebels. The rebels viewed the US and
foreign corporations as imperialists that sought to dominate the Colombian worker.

Operating within one of the worlds most volatile regions, AMCs operations were frequently in
the crossfire between the warring Marxist rebels and the paramilitaries. FARC attacked AMCs
railroad 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 these
attacks. The company was forced to operate only during the day as night operations were too
dangerous. Kidnapping remained a major fear as well. Approximately 400 Colombian army
soldiers guarded AMCs operations to increase protection. The paramilitaries were another threat
to AMC. 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, the rebels increased their attacks on AMC. Additionally, the leader of FARC said
that it would take strategic actions against AMC in response to the companys strong support for
US 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 that
refused to pay.

Two more union leaders were assassinated by the AUC in October of 2001. The company
continued to refuse to house its workers and relations with its union employees were reaching a
critical 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 completely from
Colombia, stressing that the company was putting its employees in danger by operating in such a
volatile environment. Continuing operations in the country, the UMW stressed, would only add
to Colombias human right violations. The United Mine Workers continued to put heavy pressure
on AMC to withdraw.

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

American Mining Company

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

Theme
The American Mining Company moves to Colombia because of rising labor cost in USA which
has 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 and
problems. The war between the Rebels like FARC and the Paramilitaries like AUC created

American Mining Company


obstacles for AMC, because the union workers whom the AUC believed to be Marxist
sympathizers or indirectly FARC followers, were included in the targeted list of attack for the
AUC. With time, this turned out to be one of the major problems as the Paras were well armed
and used to kill the workers openly. Also the other problems is to such as imposing 10% tax on
AMC, 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 AMC
productions for days.

Main Issue

American Mining Company


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

SWOT ANALYSIS

American Mining Company


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

Strengths
Refer to a firm's strengths are its resources and capabilities that can be used as a basis for
developing a competitive advantage in the marketplace
Weaknesses
Are the absences of certain strengths that may
hinder organization to run successfully.
Opportunities
Refer that the external environmental analysis may
reveal certain new opportunities for profit and
growth.
Threats
Refer as changes in the external environmental that
is uncontrollable also may present threats to the
firm.

STRENGTH
Very successful Company:

American Mining Company


American Mining Company was one of the leading coal mining company in America for a long
period of time and it was among the top 300 largest private companies in America before it
shifted to Colombia.
American Mining Corporations objective is to be the acknowledged leader in the exploration
and development of U.S. base and precious metals by utilizing premium Industry experience
with advanced technologies and proven efficiencies. Our goal is to elevate standards of
responsible practices for the Resource Industry while building a profitable business. Gary
MacDonald, President, CEO. With this statement, we can understand the goal of AMC.
American Mining Corporation ("AMC) is a production oriented Mineral Exploration and
Mine Development Company that explores, acquires, and develops advanced stage properties
throughout the western United States. With an accredited technical management the company
operates from an advanced business model which it has developed for the purposes of reducing
the financial risks commonly associated with exploration and mining.

High rated company:


American Mining Company is one of the highest rated companies in the world. American
Mining Company provides high quality coal. They also provide excellent quality to their
customers.
The Companys focus begins on gold and silver, however, base metals are also among
supplementary economic objectives. It is the Companys opinion that in todays natural resource
world the utilization of advanced techniques and technologies are major components for building
a successful exploration and mining business.
American Mining Corporation is committed to environmental responsibility, safety, health, and
forthright practices while providing a rewarding work environment. Thats why they AMC is one
of the most high rated companies in the world.

Connection to the US government:


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

American Mining Company

In May 2000, the US Congress sent a $1.3 billion dollar aid package designed to
help the Colombian
government confront its security issues created by the rebels and the drug problem.
FARC, highly
agitated by the US aid, planned a series of coordinated attacks against US assets to
protest the perceived
interference.
AMC was decidedly in favor of US aid, and heavily lobbied the US Congress to
increase military
shipments, including helicopters and training. AMC company officials personally
escorted Colombian
government representatives around Washington, DC, during their lobby efforts.
Moreover, President
Pastrana 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 passed with the objective of reducing cocaine production.
US Congress members also acknowledged that American companies would directly
benefit, as they had a strategic interest in a stable Colombia. So, it can be said that
AMC had a connection with the USA government.

Connection with the Colombia


government:
Colombia has 3rd largest 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. Colombian
government has offered many lucrative propositions to AMC.

the government offered numerous attractive investment incentives to AMC,


including tax-free operations
for 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 capacity
to move 10 million tons of coal per year would be for the exclusive use of AMC. A
new 200-kilometer
rail 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 the protection of
the companys

American Mining Company


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

Experience:
AMC has vast experience in mining business. They have experience of more than half century in
this business. Experience is an important thing for the business. It has value in the market and
everywhere.
AMC is a globally experienced company in coal mining, so their experience became strength for
the management team. AMC has started their business from America and they have moved from
America and trying to emerge their business in Colombia.
The management of AMC has successfully. AMC was one of the leading coal mining companies
in the United States for the previous half century, with coal holdings of over 1.3 billion short tons
and revenues of nearly US $1 billion. Worldwide, AMC enjoyed a reputation of providing high
quality coal, reliable delivery, and excellent service.

Natural resources:
Colombia has the natural resources. It has the 3rd largest coal reserves in the world. The coals
produced in here are the best quality thermal coals.
Colombia is the world's tenth largest producer of hard coals and the fourth largest exporter of
coal, based on 2009 data. The U.S. Geological Survey states that Colombia is the largest coal
producer 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 shorter
distances and lower freight costs compared to the rapidly growing Asian markets. Colombia is
considered to be a low-cost producer with its coal highly sought after due to its low sulfur
content.

American Mining Company

Provider of high quality coal:


AMC enjoyed a reputation of providing high quality coal, trustworthy delivery, and outstanding
service, worldwide so this is also strength for the management team to achieve success easily in
a country like Colombia.
American Mining Company is one of the topmost level companies. The company is also good
with their machineries. Moreover the company is efficacious and assertive which is dynamic
forward. American Mining Company has started its journey from America and now they are
trying emerging their business in Colombia.
AMC has earned a lot of success and achieved a reputation of top private level company in
America. In Colombia, they would find high quality coal which will be better for their clients. It
will also increase their reputation in the market as the high quality coal producer.

American Mining Company

WEAKNESSES
Internal conflict:
AMC had some internal conflict with their employees in the USA. They were not happy with the
decision to move AMCs operation to Colombia. AMC told their employees that they would not
transfer their operations to other countries. So, it created problem for the AMC. Many employees
lost their job because of this move.
The management team of AMC was not responsible and loyal enough with their US worker
which is a weakness of them. AMC has started their business from America and they have
moved from America and trying to emerge their business in Colombia. The management of AMC
has successfully earned their confidence. Although they were successful enough there are some
problems with them also.By the end of 2000, the American Mining Company (AMC) had
finished moving nearly all of its coal operations from the southern United States to its premier
mine in Northeast Colombia.
Despite telling its workers that the company would not transfer its operations abroad, AMC
closed nine mines over a five-year period, firing over 5,000 United Mine Workers. And this type
of behavior makes the management team irresponsible because they do even bother to tell their
workers that they are moving to another country. Moreover this kind of behavior also says that
the 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. They
kidnapped many employees and workers. Certainly, safety is a big issue.

American Mining Company


AMC faced several problems during establishing its business in Colombia.Colombia was theone
of 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 their
village.
Two leaders of AMCs mine union were taken off the bus and killed execution style. AMC
requested increased protection from the Colombian government, but President Pastranas
response was constrained by a lack of trained soldiers and the rough, isolated terrain. AMC failed
to protect their employees and workers which was a big concern for them.

Low
among
workers:
AMC workers were in
In last 5 years, AMC shut
over 5000 workers. This
among the workers.

morale
the
secured about their jobs.
down 9 mines. They fired
has created insecurity

If there is insecurity among the workers, then they are not likely to perform better in the
workplace. 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 Colombian
nationals in the top positions. It would have been better for the company, because Colombian
nationals know about their country better than the Americans. So, it created an imbalance in the
management of AMC.

American Mining Company

The management team was successful with their several works. But in some cases they faced
several problems because of their mismanagement. In Colombian several union workers were
killed by AUC. In the year 2001 two union lender of AMC were killed by AUC. For this
reasonthe assassinated leaders had previously requested that AMC allow employees to spend the
night 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 its
workers. The day after the assassinations, over 1,200 of the companys employees went on strike
for three days in protest. These problems occurred because the management failed to manage
their unions.

Less control over the workers:


AMC could not handle their workers very well. Employees and workers were kidnapped and
murdered. Workers demanded to provide housing in the mines. But, AMC refused to provide that
because 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 over the workers, then these things would not have happened.

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

American Mining Company

OPPORTUNITIES

Low labor cost/wages:


The first opportunities for American Mining Company (AMC) are low labor cost. Colombias
low wages provided a much cheaper labor force in comparison to the high hourly salaries of the
US mine workers.
Wages for Colombian mine workers, for example, ranged from $500 to $1,000 a month, while
US mine workers received over $3,000 monthly plus benefits. Additionally the company is
successful and confident which is pushing forward.
By providing low wages to the company workers AMCs management team got the opportunity
to save money for the future expense. Also earn more profitability and reserve cash by using
cheap labor force.

Worlds third largest coal reserves:


Third point is the organization member of AMC got the opportunity to have abundant reserve of
coal 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.

American Mining Company


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

Government support:
Government support or encouragement is very useful and important for any organization. It is a
great 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 the
government. When AMC moved from America and trying to emerge their business in Colombia.
The management of AMC has successfully earned their confidence. The government offered
numerous attractive investment incentives to AMC, including tax-free operations for 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 capacity
to move 10 million tons of coal per year would be for the exclusive use of AMC. A new 200kilometerrail 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 the
protection of the companys operations and its workers.
With these incentives, AMC began construction on its workers. With these incentives, AMC
began 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.

American Mining Company

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 America
and trying to emerge their business in Colombia. At some point in establishing the business in
Colombia 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 to
their 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 night
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 its workers.
The day after the assassinations, over 1,200 of the companys employees went on strike for three
days in protest. All production ceased.

Kidnapping :
Colombia maintained the highest kidnapping rates of any country in the world. Both foreign
executives 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 significant
discouragement to foreign investors.

American Mining Company


Rebel guerilla groups dominated Colombias drug trafficking and kidnapping business. Although
the rebels primarily operated in sparsely populated areas outside the urban centers, kidnapping
and 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 in
Colombias major cities.
So to defend the kidnapping AMC demanded increased protection but the President was
constrained by the lacking of trained soldiers and the rough, isolated terrain.

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 attack
destroyed an entire locomotive and its shipment. AMCs mine pits were also subject to small
raids by guerrillas.
The companys operations on its infrastructure were severely impeded by these attacks. The
company was forced to operate only during the day as night operations were deemed to be too
dangerous. 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, the
rebels increased their attacks on AMC. Its a threat for the AMC organization.

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

Marxist sympathizers.

Threats of neighboring country (Venezuela) :


American mining company faces problems or treats from in the interior of the country but also
outer surface the country. Recent developments in the neighboring country of Venezuela also
troubled the companys management .

American Mining Company


\In November 2001; Venezuelas President Hugo Chavez announced a new law that consolidated
state-control of the countrys oil industry. The government would have authority to make
strategic operational decisions and receive higher royalty payments. Private industry experts
decried the action, stating that it would deter foreign investment. Business leaders called for a
nationwide 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, AMC
would need to ponder whether it would be possible for Colombia to follow in its neighbors
path.

HR ISSUE
Human Resource management is an essential part for any organization. HR department deals
with 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 about
determining HR needs, hiring precise employees, designing work pattern, job analysis, train the
employees, analyze the work environment, rewarding employees, giving feedback, evaluating
employees performance, creating positive work environment etc. Besides, HR department
determine the salary standard considering both organization and employee sides.

Following the case, there is no integrated HR department. So, the organization lack behind on the
field of controlling, recruitment and monitoring. The organization should have HR department to
perform 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 the

American Mining Company


employees are not going to feel secure while doing their job, output wouldnt be satisfactory
enough.

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 and
instructions of Colombia Government properly. Though the organization has a diversified work
force but it does not followed by law of Colombia Government properly.

Under Colombian law, 80% of a companys employees were required to be Colombian


nationals. AMC exceeded this percentage minimum, as the company rotated high- and mid-level
executives between its US headquarters and its Colombian operations. The mine and seaport
workers 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 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 to their 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 night 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 its workers.

American Mining Company


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.

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 to
come to work because of chance of attack from the rebel groups, there is a high need of having
insurance 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 and
make them its protection force. As foreign company, AMC needs a good word of mouth and a
good image in Colombia. CSR activities can make the positive image of a company and also
they can be used as an indirect publicity of a certain company. If AMC practices CSR activities
like establishing fund, charity for poor and orphan children etc.
AMC should help the general people by doing some CSR activities, it should have a good
influence to general people and at the bad time of AMC or its employee, they should find these
general 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 work
and its not possible to give all the employee accommodation opportunity if the company wants.

American Mining Company


So, AMC need to provide transportation facility to get productivity and to care of human
resource.

RECOMMENDATION
Though AMC is a very well known and successful
organization, it has some problems regarding
management and other area. After evaluating the
HR issue, now its time for some recommendations for the wellbeing of the organization. At first,
we have identified the problems and depend on this recommendation is provided. We believe that
AMC can overcome its problems by following our suggestions.

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

Problem no: 01
There is no HR department in American Mining Company (AMC).
According to the HR issue and the case, AMC doesnt have HR department. To get rid of current
problems 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 an
organization to have a HRD and consider it as assets. All most every organization nowadays

American Mining Company


have HR department. Moreover, to get the right employees for the organization, the need of HR
is like blood for human body. So, AMC should have HR department to cope up with the
situation.

Justification
Human resource is the most essential resource for an organization because its assured
profitability and HRD deal with it. HRD recruit, select, train employee and also assist them what
need 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 run
business in a systematic way.

Under the HRD, AMC can recruit, select and train the right, responsible and loyal employees for
the 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. AMC
does not provide employees security of their life even. This can be a major cause for AMC
because if employees of this company do not get sufficient protection, they might leave the job
and look for the other one.

Recommendation no: 02
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 modern
technology to enhance its protection and privacy more. Top management should take proper
steps 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 company
in a safe territory or make the company area a military zone. They can also ask help to the US

American Mining Company


govt. to solve the problem. Besides, AMC can talk with the rebel groups to come up with a
mutual 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 working
schedule and after that a 5 or 1 week holiday.

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 do
that, 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 should
introduce sufficient rules and regulations and take necessary steps to enhance the protection of
their employees.
As it is the matter of terrorism, they must consult this matter with Colombian Government. It can
ask for Colombian govt. to make the company area under military zone and take necessary steps
to prevent this kind of attack. AMC can also take the help of Unicef and Interpol to solve this
problem. It can also set their personal security force to have an extra protection for their
employees. 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 the
attack 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 be
Colombian nationals. AMC exceeded this percentage minimum, as the company rotated highand mid-level executives between its US headquarters and its Colombian operations. The mine
and seaport workers were exclusively locals. To have a proper diversified work environment its
an issue to be considered.

Recommendation no: 03
AMC should follow the rules and instructions of Colombia Government properly to have
diversified work force.

American Mining Company


Diversified work force means combination of different employees in the work place. Having
diversified work force is advantageous for AMC because its create opportunity for the
organization. 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 the
government.

Justification
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 a
part 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 and
rest of the 20% from the other nationals.
On the other hand, if any company remain successful to control the diversified workforce, it is
obvious that the company will earn success because an organization with multi-cultural value is
already rich in ideas and creativity. So, AMC should set up an effective diversified workforce but
following the law of Colombian Govt.

Problem no: 04
AMC doesnt have any accommodation facility.
From the case, we get to know that six union leaders killed by the AUC within three years
because union leaders followed the communist ideology and rebel groups follows Marxist
ideology, union leaders held one of the most dangerous occupations in Colombia. Union leaders
asked for an accommodation only at the night time because it becomes so dangerous to travel
after dark. But AMC refused to give them this right.

Recommendation no: 04
AMC should have accommodation facility.
AMC should provide their employee with the accommodation facility to stay at night because its
the duty of the organization to protect its employee from any harm which is connected with the
company image.

Justification
Its not possible to give residential facility to all the employees but the company can at least give
this 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 company

American Mining Company


and to save its employee from the offensive rebel group, AMC should provide an
accommodation facility to its employees.

Problem no: 05
AMC doesnt have any insurance policy for the employees.

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

Recommendation no: 05
AMC should have insurance policy for the employees.
AMC should introduce insurance policy for the employees not only to ensure their future but
also 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 the
employees 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 offensive
activities of rebel groups, not only the life of employees of AMC is getting worse, but also the
productivity and other financial and business issues are facing obstacles. The unwanted activities
of the rebel groups are becoming the major cause of disturbance in a maintaining a healthy
business for AMC.

American Mining Company

Recommendation no: 06
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 provide
sufficient safety to its employees. AMC should personally hire security people for their
protection. 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 can
make a deal with the Colombian government. They might ask to the Colombian Government for
the 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 survival
and do their job in a good environment is the major responsibilities for a company. If any
company does not do that, it might be a cause of employee turnover which is a negative feature
for an organization. So, for the betterment of the organization, AMC should introduce sufficient
policy 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 stop
this 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 to
provide highest security among AMCs employees. So, AMC can take these steps as soon as
possible and save its employees and the company.

American Mining Company

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.

Recommendation no: 07
AMC should have any transportation facility for the employees.
As its not possible to give all the employees transportation facility, AMC should have
transportation 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 because
of absence of transportation facility, company may face shortage of employees in near future.
That why, AMC need to provide transportation facility to the employees.

American Mining Company

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

What is the problem?


There is no HR department in American Mining Company (AMC).
According to the HR issue and the case, AMC doesnt have HR department. To get rid of current
problems like unprotected work environment, lack of proper management structure, less
concern 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 assured
profitability and HRD deal with it. HRD recruit, select, train employee and also assist them what
need 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 run business in a systematic way.

Under the HRD, AMC can recruit, select and train the right, responsible and loyal employees for
the 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.

American Mining Company

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 if
not then they need to identify areas of which Human Resources work on:

American Mining Company

Recruitment Pre & Post Recruitment Manpower Management


Payment & Benefit Increments Payment Payroll Management
Pension Management Overtime Payments Attendance Management
Training & Development,
Identifying Training requirement
Finding vendors for training External & Internal & in house Assessing
vendors Assessing Training Identifying Training Needs of employees Identifying
competences Creating individual development plans
Performance Appraisal Management, Creating Suitable Performance Appraisal
System for the organization Ensuring Educating employees on it
Managing the process i.e. distribution, completion of the appraisal, sending
appropriate reminders, holding appraisal meeting, Managing Grievances
HR Administration,
Arranging for employee travels internal & external
Arranging Visa
Arranging approvals with labor law
Arranging training Registrations
Arranging for hotel accommodations
Arranging HR Events (presentations, meetings, conferences)
Ensure Policy Development

AMC need have a job description of their eoployees and cascade the content therein for the
others incorporating their main areas & duties contained in the above list. Which will also
contain 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 own
country border. We strongly recommend the company to develop this strategy in Colombia at
their company main office at first as soon as possible.

Who should implement this?


Creating a well organized HR department is a part of the company decisions, thus would be
implemented by the company owners itself. We all know that for implementing any plan into the
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 as
per the authorization of the directors.

American Mining Company


When should it be implemented?
Time is another crucial factor in the implementation process. Implementing any plan without
proper timing has no value. So the AMC must implement the plan within a specific period of
time. They must target a date within which they will create their HR department. We suggest that
it 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.
What is the problem?
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 not
provide employees security of their life even. This can be a major cause for AMC because if employees of
this company do not get sufficient protection, they might leave the job and look for the other one.

What is the solution?


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 do
that, 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 should
introduce sufficient rules and regulations and take necessary steps to enhance the protection of
their employees.

American Mining Company

As it is the matter of terrorism, they must consult this matter with Colombian Government. It can
ask for Colombian govt. to make the company area under military zone and take necessary steps
to prevent this kind of attack. AMC can also take the help of Unicef and Interpol to solve this
problem. It can also set their personal security force to have an extra protection for their
employees. 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 the
attack of the rebel groups without hampering the productivity of the company.

How should the implementation take place?


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 can
not grow bigger. But when a worker work in a company he want his life safety. AMC can
give them life insurance so that they might feel safe. So the first step is when hiring a
employee AMC will give insurance facility in the agreement.

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

Where to implement it?


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

Who should implement this?


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 action
professionals, and other staff in their efforts to develop and promote safety policies and programs
throughout the organization. Colombian Government also can implement this problem by
making the company area under military zone and take necessary steps to prevent this kind of
attack

American Mining Company

When should it be implemented?


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 be
Colombian nationals. AMC exceeded this percentage minimum, as the company rotated highand mid-level executives between its US headquarters and its Colombian operations. The mine
and seaport workers were exclusively locals. To have a proper diversified work environment its
an issue to be considered.

What is the solution?


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 a
part 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 and
rest of the 20% from the other nationals.

American Mining Company


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

How should the implementation take place?

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

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

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

Where to implement it?


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

Who should implement this?


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

When should it be implemented?


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.

American Mining Company


What is the problem?
AMC doesnt have any accommodation facility.
From the case, we get to know that six union leaders killed by the AUC within three years
because union leaders followed the communist ideology and rebel groups follows Marxist
ideology, union leaders held one of the most dangerous occupations in Colombia. Union leaders
asked for an accommodation only at the night time because it becomes so dangerous to travel
after dark. But AMC refused to give them this right.

What is the solution?


Its not possible to give residential facility to all the employees but the company can at least give
this 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 company
and to save its employee from the offensive rebel group, AMC should provide an
accommodation facility to its employees.

How should the implementation take place?


Businesses that evaluate their employment practices according to the following guidelines can
ensure they develop and implement the accommodation problem of the employee.
The company can make them building inside the company area. A mining sight is very
big. If the employees can be accommodated inside the area so they can feel safe, they can
take rest is their home and can work well for the company.

Where to implement it?


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

Who should implement this?


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

When should it be implemented?

American Mining Company


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

5. AMC should have insurance policy for the


employees.
What is the problem?
AMC doesnt have any insurance policy for the employees.
There is less security to come to work for AMC because of chance of attack from the rebel
groups. So, there is a high need of having insurance strategy for AMC.

What is the solution?


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

How should the implementation take place?


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 the
consent and knowledge of the employees concerned. Employees all ranks and class absolutely
detest anything related to a decrease in their compansation. What the management needs to do is
to communicate their problems and justify the cause reason for such an action. If the employees
can be convinced that in the long run these steps are going to be beneficial to them then they will
co-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 conflicts

American Mining Company


The junior level staffs are always more or less defensive towards life insurance or any such
measures. What the company can do is, introduce this plan first on the higher level management
and then gradually move down the hierarchy. In that way the lower level managers wont feel
exploited 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 insurance
opportunity 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.

Where to implement it?


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 it
should be implemented throughout the organization so that nobody feels that other was treated
more favorably.

Who should implement this?


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 the
AMC must choose the right person for the implementation. The CEO along with the help of the
top management and the HR department must implement this plan.

When should it be implemented?


Time is another crucial factor in the implementation process. Implementing any plan without
proper timing has no value. So the AMC must implement the plan within a specific time. They
must 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 the
plan might not be effective anyway.

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