Rafael Felices Huarte, general manager of PERI Spain, had to make some big decisions but was facing many challenges. The company was growing and had undergone a strategy change. He needed to fill the new positions but the construction managers were hard to find. He also needed to ensure that the values of the organization, its high quality standards and low accident rates would be maintained during the rapid expansion. In order to help readers understand what was at stake, the case tells the history of the company, emphasizing its success as a world leader in the development of new products in its field and explaining how it has managed to keep its accident rate so low compared to the industry’s average due to its strict policies and training. Because of the job security offered by PERI, the case explains how it has also managed to achieve low rates of voluntary staff turnover. The case then delves into the culture at PERI Spain which is characterized by its values of self-discipline, responsibility, communication and learning and also into the company’s structure and organization. It explains how two new divisions (civil engineering and industrial scaffolding) were created to change the company’s strategy and brings up one of the greatest challenges involved in the strategy change: recruiting new foremen. At the end of the case, Felices Huarte ponders the future. There had been a recent wave of accidents at other construction companies, so he was wondering if accidents at PERI would increase if the workforce were to increase. He also had to decide what strategy to follow to fill foremen vacancies. Should they promote employees internally who were unfamiliar with the work of the two new divisions or recruit from the outside job market and face the challenge of maintaining the organization’s culture? In addition, he reflected on the pressing need to hire construction workers and whether they should be employed directly or subcontracted.

The case wraps up by asking readers what they think Felices Huarte should do.

This case is an interview with Gerhard Hexel, the managing director of PERI Spain, about the company’s management philosophy. Firstly, Hexel explains the staff training and occupational safety policies that exist at PERI such as driving courses. He emphasizes that although they are involved in a dangerous business, they are the safest company in the industry and have an annual accident rate of zero. He then boasts that staff rotation is very low due to the great training they provide and that people who do leave usually end up coming back. In order to motivate employees, he describes how the company organizes lots of activities such as sports, English classes, and parties. Regarding his management philosophy, he believes in delegating work, giving people freedom and getting work done more efficiently, not spending more time at work. He also believes that people should like to work and explains how it can be like a hobby. Although the company is now an example in the industry, Hexal explains that PERI Spain went through tough times and had to confront a crisis in 1992-1993 that it got through by cutting the employees’ salaries. Lastly, he discusses the future of PERI Spain and how the company plans to continue growing.