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cASe ApplicAtion 2 CHAPTER 7 • Managing Human Resources 249
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Brunello Cucinelli: Humanistic Approach to Luxury

runello Cucinelli is the founder and CEO of Brunello performance evaluation system recognizes the value of labor
Cucinelli, a leading luxury clothing line. For nearly 37 intensive jobs—artisans are paid 15 percent more than people
Byears, it has brought out some of the most sought after in administration. The company also has a school that offers a
luxurious clothing in the world, much of it cashmere and all 9-month paid training to those employees who wish to pursue
of it handmade in Italy, out of Solomeo, a hilltop village in a career in tailoring and designing. In an extra effort to en-
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Umbria, near Rome. During the recent economic crisis, the hance social relations, the management encourages long and
company did very well—the number of shareholders more relaxed lunch breaks and makes arrangement for after-hours
than doubled, from 500 in 2008 to 1,270 in 2014; the turnover social activities.
in 2013 saw a 10.9 percent increase (about €322 million); The company’s success also comes from a culture that rec-
the number of stores globally rose to 90. According to finan- ognizes and rewards talent, and encourages healthy debates in
cial analysts, the company’s the decision making process.
initial public offering (IPO) It isn’t rare that young employ-
on the Italian Stock Exchange Putting the employees back at ees in the company are pro-
in 2012 was considered to be THE HEART of the business moted quickly to managerial
simply “stellar,” increasing by positions, if they show poten-
40 percent on the first day of tial. During business meetings,
exchanges. employees, even those recently
Considered as a humanist enterprise, the philosophy ad- hired, are seen challenging the opinions of others, including
opted by the company’s management is “making work more their CEO’s. As part of this culture, Cucinelli is consistent in
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human, with people at its core.” Brunello believes in con- his strategies and puts into effect what he plans . . . to celebrate
scious capitalism and stresses the importance of being aware the success of their IPO in 2012, he decided to give a monetary
of the effects of their actions on human beings and the environ- bonus of up to €6,000 to each employee as a sign of human
ment in which they operate. In preparation for the IPO and to “gratitude” for the hard work they offered the company.
clarify his vision to potential shareholders, he revealed that his
goal was to create a “humanistic company,” one that pursues Discussion Questions
reasonable profit margins (about 9 percent each year, which is 7-18 What is your impression of this humanistic approach to HRM?
considered inferior to the average in the luxury industry), pro- Do you think that this is something pertinent also to other no-
vides long-term employment perspectives, and ensures sustain- luxury organizations? As a shareholder, how would you have
able workload for all involved. judged this management approach?
What does this company do to stand out among its com- 7-19 What can managers do to ensure that employees will not take
petitors? Quite a lot, actually! Cucinelli did not appoint a advantage of the company’s policy that does not require them to
formal Human Resource Director. Instead, he had established clock into at the start of the working day?
a team of three young managers who would be available at all 7-20 What is your opinion about the decision of the company of not
having a formalized HR Direction but then require HR skills to be
times and for everyone. Ensuring that every employee lives widespread across all managerial levels? Is this something you
to the fullest, they are not required to clock in and are given a will consider in your organization?
manageable workload so that everyone can leave the office by 7-21 What Brunello Cucinelli could do, in addition to recognize higher
5:30 p.m. The company has a generous compensation system salary than average market, to convince young people to accept
with salaries that are 20 percent higher than average. Their taking up manual jobs no longer appreciated by young people?