Microsoft Word - June 2024 Capstone Prework RD

QUALIFICATION PROGRAMME
PARTICIPANT'S PREWORK
Hong Kong Institute of Certified Public Accountants
Capstone
June 2024
Capstone Workshop June 24: Prework
Contents
Overview 3
Workshop outline 3
HUMAN CAPITAL HK CASE STUDY 5
PREWORK ACTIVITIES 36
DAY 1 WORKSHOP
Session 1.1 Understanding the current position:
Strategic and risk analysis 37
Session 1.2 Team management and leadership: Leadership
attributes and leadership styles 40
Session 1.3 Business ethics and professional negligence 41
DAY 2 WORKSHOP
Session 2.1 Business acumen: Decision making 43
Session 2.2 Business acumen: Implementing business solutions 45
DAY 3 WORKSHOP
Session 3.1 Team management and leadership:
Creating high-performing teams 52
APPENDICES
Day 1 to Day 3 Reflection and Next Steps Handout 55
Core enabling competency skills summary 59
2
Overview
Before you attend the first Capstone Workshop Day, you should familiarise yourself
with the contents of this Prework materials. The Workshops will be highly interactive,
and you will be required to participate and contribute to the discussion and exercises.
The information in the Capstone Learning and Practice Workbook and this Prework
materials, including the suggested readings and Prework assignments, will prepare
you to fully participate in the Workshop, contribute more effectively and get more
from the Workshop.
Additionally, your completion of the Prework will be reviewed by your Workshop
facilitator at the beginning of the Workshop and will contribute to your overall result.
You may refer to the rubric in the Capstone Learning and Practice Workbook for
further details.
You should read all materials and ensure you are fully conversant with the technical
information and enabling competences. The sessions associated with this Prework
materials assume you have a full working knowledge of this material; you will be
called upon to demonstrate your mastery of the content as well as your core enabling
competences. Ensure that you complete all Prework before coming to the respective
Workshop and read the Case Study and relevant materials as required.
Workshop outline
Each Capstone Workshop Day is structured as follows:
Session Methodologies
Day 1
Introduction and icebreaker • Large-group discussion

• Small-group discussion
Technical sessions
• Case Study
(1) Business acumen
• Presentation
• Understanding the current • Individual reflection
position: Strategic analysis and • Open class sharing
financial analysis
(2) Leadership attributes and
leadership styles
(3) Business ethics and professional
negligence
(4) Business acumen
• Strategic evaluation
Reflection
3
Day 2
Reboot • Large-group discussion
Technical sessions • Small-group discussion

(1) Business acumen • Opening class sharing
• Formulate business decisions • Presentation
(2) Business acumen • Individual reflection
• Implement business solutions
(3) Effective business communications
Reflection
Day 3
Reboot • Large-group discussion
Technical sessions • Small-group discussion

(1) Leadership and team • Opening class sharing
management: • Presentation
• Creating high-performing • Individual reflection
teams
• Peer review of individual writing
(2) Integrated assignment assignment
• Individual written report
• Team presentation
Reflection
4
HUMAN CAPITAL
HK LTD CASE STUDY
5
SUMMARY OF EXHIBITS Page
EXHIBIT 1: The recruitment industry in Hong Kong 7
EXHIBIT 2: About Human Capital HK Ltd 12

EXHIBIT 3: Human Capital HK Ltd: Board of directors and
organisation 17
EXHIBIT 4: Human Capital HK Ltd management accounting for

the year ended 31 March 2024 21
EXHIBIT 5: Human Capital HK Ltd performance review for the

year ended 31 March 2024 23
EXHIBIT 6: Human Capital HK Ltd options for strategic growth 25
EXHIBIT 7: TalentHUB 28
EXHIBIT 8: New chairperson of the board of Human Capital HK 30
EXHIBIT 9: Business case for investing in cloud-based ERP

system and contractor services 32
EXHIBIT 10: Marketing proposal for digital recruitment services 34
Disclaimer: The case is based around a fictitious company, Human Capital

HK Ltd, and has been developed for the purposes of discussion during the
Workshops. It is not intended in any way to represent a real company.
However, the information about the recruitment services industry in
Hong Kong is based on facts.
6
Exhibit 1: The recruitment industry in Hong Kong

Introduction
The recruitment agency industry in Hong Kong is a significant part of the broader
human resources and staffing sector. It caters to various sectors, including finance, IT,
healthcare, manufacturing, and more.
In the highly competitive job market of Hong Kong, recruitment firms play a crucial
role in helping companies navigate the hiring landscape and secure the best talent
available. Their expertise, networks, and specialised services contribute to the overall
success of businesses by facilitating effective talent acquisition and ensuring optimal
workforce alignment.
The recruitment consultancy industry in Hong Kong is a highly competitive and

dynamic sector, driven by the nation's robust economy and its position as a regional
business hub. With a diverse range of industries and a strong demand for skilled
talent, Hong Kong offers ample opportunities for recruitment consultancies to thrive.
The industry plays a vital role in matching job seekers with employers, providing
specialised services such as talent acquisition, executive search, and HR consulting.
Key players in the market include both large multinational firms and small to
medium-sized consultancies, all vying for a competitive edge in this fast-paced
environment.
About the recruitment industry
Recruitment agencies specialise in finding qualified candidates due to their extensive

access to a large pool of candidates, knowledge of expert recruitment consultants
and advanced recruitment technology tools. Using these resources and tools,
recruitment firms can effectively identify and attract candidates with key skill sets that
align with a company's needs.
Human resource professionals and hiring managers at employer companies tend to

work with specialised recruiters to find talent with niche skills or to expand their
workforce to meet business demands. Specialist recruitment consultants have
ongoing discussions with their clients to understand their skills and experience
requirements and understand the company's employee benefits and workplace
environment to help attract interested talent.
Once a match is found based on the potential candidates' skill sets, job specialisation,
experience, qualifications and expectations, the recruiting agency manages both the
client and candidate throughout the entire recruitment process to ensure a higher
success rate.
This includes a wide range of services such as resume screening, talent screening,
interview scheduling, negotiation of job offers and assisting with employee
onboarding. A good recruiter understands what it takes to attract quality talent with
7
in-demand skills and maintains effective communication between candidates and

employers at all times.
How does a recruitment agency help job seekers find a job?
Depending on the seniority of the role as well as expectations of both the employer
and the candidate, the entire hiring process can take two weeks, or as long as
six months. Recruitment agencies can easily connect job seekers to some of the top
employers in your industry due to their extensive network of hiring managers. They
enable talented candidates to have access to numerous career opportunities to
help them achieve their career goals.
Once they find a suitable job opportunity, the recruiters will send a candidates
resume to potential employers and negotiate on their behalf, so candidates avoid
having to spend time scrolling and applying for multiple jobs online.
Key activities in the recruitment consultancy industry:
All recruitment professionals wish for one final outcome – to place candidates with an
employer the candidates would like to work for in exchange for a fee or commission.
Key chargeable services in the recruitment industry include:
• Talent acquisition: Recruitment firms assist companies in identifying and

attracting top talent for their job vacancies. This involves understanding the
client's requirements, conducting job market analysis, sourcing candidates
through various channels, and screening applicants to shortlist the most
suitable candidates for further evaluation.
• Candidate assessment and selection: Recruitment firms often conduct

assessments and evaluations to assess the suitability of candidates for specific
job roles. These assessments may include interviews, skills assessments,
psychometric tests, and reference checks. By thoroughly evaluating candidates,
recruitment firms ensure that only qualified and capable individuals are
presented to their clients.
• Executive search: Executive search services focus on finding and recruiting

high-level executives and senior management professionals to fill existing
senior positions in organisations. These specialised services involve a thorough
search process, extensive networking, and a deep understanding of the industry
to identify, and approach qualified candidates who possess the desired skill sets
and experience.
• Temporary and contract recruitment: Recruitment firms offer temporary and

contract staffing solutions to meet short-term or project-based staffing needs.
They maintain a pool of pre-screened candidates who can be deployed on a
temporary basis, providing clients with flexibility and agility in managing their
workforce requirements.
8
• Industry-specific recruitment: Many recruitment firms specialise in specific

industries or sectors, such as IT, finance, healthcare, engineering, or hospitality.
They possess in-depth knowledge of the industry and understand the unique
skill requirements and challenges faced by employers in those sectors. This
specialisation allows them to provide tailored recruitment services that align
with industry-specific needs.
• Client consultation: Consultants work closely with client organisations to
understand their staffing needs, culture, and specific requirements. This
involves regular communication and collaboration to ensure a good match
between candidates and clients.
• Candidate development: Some recruitment agencies offer services to help
candidates improve their skills and marketability. This includes resume writing,
interview coaching, and career counselling.
• Compliance and regulations: Navigating labour laws and regulations, including
work permits and immigration policies, is vital, especially when dealing with
international candidates.
Recruitment agencies will also invest considerable time and effort into the following
operational activities to maintain key client relationships, market expertise and key
contracts.
• Client relationship management (CRM): Building and maintaining strong
relationships with clients is crucial for long-term success. This includes
understanding their changing needs and providing ongoing support.
• Market research: Staying updated on industry trends and labour market
conditions is essential. Recruitment agencies conduct market research to
provide clients with insights into salary trends, talent availability, and
competition.
Networking: Networking plays a crucial role in the recruitment industry, allowing
recruiters to connect with potential candidates, expand their talent pools and help
recruiters understand changing candidate behaviours and market trends. Networking
also facilitates the identification of qualified candidates but also contributes to
building a strong employer brand and fostering long-term relationships in the
talent pool.
Here are key networking strategies in recruitment:
(1) Organising networking events: Hosting networking events is a proactive way
to engage with potential candidates. These events can take various forms, such
as job fairs, industry-specific seminars, or webinars. Networking events provide
a platform for recruiters to interact with professionals in a specific field,
establish connections, and identify top talent. They also help in creating a
positive and memorable impression of the recruitment agency.
9
(2) Social media recruitment: In today's competitive job market, recruiters use
social media platforms like LinkedIn, Facebook, and Twitter to attract and
engage with potential candidates. LinkedIn, in particular, is widely used for
professional networking and job postings. Companies often create dedicated
career pages to showcase opportunities. Facebook has also gained popularity
for cost-effective job postings. Recruiters can join relevant groups on these
platforms to connect with potential candidates and share job postings.
(3) Utilising employee networks: Employee networks are a valuable resource for
finding talent. Recruiters can tap into their employees' networks, which may
include family, friends, former colleagues, and university contacts. Encouraging
employees to advocate for the company can help identify hidden talent, even
among passive job seekers. Employees can also provide insights into cultural fit,
enhancing the quality of candidates.
(4) Maintaining candidate relationships: Building and maintaining relationships

with potential candidates is essential. Recruiters should stay connected with
individuals they have connected with through networking efforts. Providing
them with relevant and valuable information related to their profession keeps
the lines of communication open. Even if candidates are not currently
interested in job opportunities, their circumstances may change in the future.
Current industry challenges
The recruitment consultancy industry in Hong Kong faces challenges and

opportunities, with a focus on economic recovery, technology integration, and
addressing talent shortages. Key activities involve talent sourcing, client consultation,
skills assessment, market research, candidate development, compliance, and client
relationship management. The industry is expected to play a pivotal role in
supporting the evolving hiring needs of Hong Kong's diverse economy.
Hong Kong recruitment industry
In 2023, the recruitment industry in Hong Kong was estimated to be worth around
HK$12–14 billion with over 1,000 recruitment agencies operating in Hong Kong.
In 2020, the Hong Kong recruitment market faced challenges due to the COVID-19
pandemic, resulting in temporary dips in demand, however the market has now
recovered. In 2023, the overall recruitment market experienced steady growth
compared with previous years due to the region's diverse industries and the
demand for talent.
10
Key trends and challenges impacting the recruitment industry in Hong Kong
The challenges faced by the recruitment industry in Hong Kong include economic
uncertainties, the impact of political events on the job market, and the need to adapt
to evolving technological trends and changing candidate expectations. These are
explored further here.
Talent shortages: Certain sectors, such as technology and finance, continue to
experience skill shortages. Recruitment agencies play a crucial role in identifying and
attracting talent in highly competitive markets.
Technology integration: The integration of technology, including AI-driven candidate
matching, virtual interviews, and online job platforms, will enhance the efficiency and
effectiveness of recruitment processes.
Remote work trends: The rise of remote and flexible work arrangements has made
it necessary for companies to adapt their hiring practices. Recruitment consultancies
can help clients navigate the changing landscape of work.
Economic conditions: Economic stability and growth in Hong Kong significantly
influence the demand for recruitment services. Economic fluctuations, such as those
associated with geopolitical factors, can affect the job market.
Industry diversity: Hong Kong's diverse economy, including finance, technology,
trade, and services, contributes to a broad spectrum of job opportunities.
Recruitment agencies specialise in various sectors to meet industry-specific demands.
Regulatory environment: Hong Kong's labour laws and regulations, including
immigration policies, can impact recruitment processes and the sourcing of
international talent.
Competition: The Hong Kong recruitment consultancy industry is highly competitive
and features both international firms with a local presence and local agencies.
Prominent international firms include Adecco, Robert Half, and Hays, while local
players such as ManpowerGroup Hong Kong also operate in the market.
Hong Kong recruitment industry outlook
Despite recent challenges, the recruitment industry in Hong Kong has shown
resilience and adaptability. It is expected to gradually recover as the local economy
stabilises. Hong Kong's diverse economic landscape, including finance, technology,
trade, and services, continues to generate demand for talent across various sectors.
As the global and local economies recover from the effects of the pandemic, demand
for recruitment services is likely to rebound. Therefore, the overall outlook for the
recruitment consultancy industry in Hong Kong remains positive in the long term.
The recruitment consultancy industry in Hong Kong is expected to continue evolving,
driven by factors such as digital transformation, remote work trends, and the need
for specialised skills. Despite challenges, the industry is likely to remain a critical part
of Hong Kong's dynamic business landscape.
11
Exhibit 2: About Human Capital HK Ltd

Human Capital HK Ltd (Human Capital HK) is a dynamic and rapidly growing
recruitment agency headquartered in the vibrant city of Hong Kong. Established
in January 2016, the company has quickly ascended to prominence in the local
recruitment landscape. Now proudly in its eighth year of operations, Human
Capital HK has forged a formidable reputation for providing tailored and efficient
recruitment solutions across an expansive array of sectors, including information
technology, finance, and healthcare.
Human Capital HK's focus has been on providing a range of recruitment services,
including talent acquisition, candidate assessment and selection, executive search,
as well as temporary and contract recruitment.
Key strengths and differentiators: The bedrock of the company's success lies in its
unique strengths and key differentiators:
• Personalised approach: At Human Capital HK, recruitment is not a one-size-

fits-all endeavour. The company prides itself on its personalised approach,
recognising that each client possesses distinct talent needs. This commitment
to customisation sets the company apart, fostering trust and loyalty among
its clientele.
• Industry acumen: The team at Human Capital HK possesses an encyclopedic

knowledge of various industries. This deep understanding allows them to
not only identify but also seamlessly source candidates with the precise
skills and experiences required by clients, adding substantial value to the
hiring process.
• Exceptional service: Human Capital HK is unwavering in its commitment to

delivering an unparalleled service to both clients and candidates alike. The
company places a premium on building enduring relationships founded on
trust, transparency, and mutual respect.
• Candidate sourcing: While Human Capital HK excels in providing traditional

recruitment services, its investment in high-caliber, well-trained recruitment
consultants ensure efficient and effective identification and connection with
potential candidates. This approach consistently yields top-tier candidates for
its clients.
• Rigorous screening: As a testament to its dedication to quality, Human Capital

HK employs a rigorous screening process to ensure that only the most qualified
candidates are presented to clients. This meticulous approach contributes
significantly to the successful placements the company is known for.
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Ownership structure and leadership of Human Capital HK Ltd:
Human Capital HK is a family-owned recruitment consultancy with a history of strong

leadership based in Hong Kong. It was founded a decade ago by Li Wong. Li Wong
played a pivotal role in establishing the company and nurturing its growth during its
formative years.
Today, Human Capital HK remains 90% owned by the Wong family. This
demonstrates a strong commitment to maintaining the company's vision and values
within the family. Other shareholders include other founder directors.
Guiding the helm of Human Capital HK is its chief executive officer (CEO), Natalie
Wong after a significant leadership transition which took place five years ago when
Li Wong, the founder of Human Capital HK, decided to retire from active management.
Li handed over the reins of the company to his daughter, Natalie Wong, who was
working for another recruitment agency at the time. The transition of leadership from
Li Wong to Natalie Wong was executed smoothly, ensuring the company's continuity
and success in the competitive Hong Kong market.
Natalie is a seasoned professional renowned for her successful track record. With
over a decade of experience in the recruitment industry where she has gained a
reputation for 'straight-talking action' and achieving results.
Under Natalie's leadership, the company has continued to flourish and expand its
presence in the competitive recruitment consultancy industry and delivered recent
excellent growth which has outperformed many of its competitors in the Hong Kong
recruitment sector.
Core company values
Extract from Human Capital HK website.
Human Capital HK underpins all its recruitment activities with the following
five core company values which embody the essence of Human Capital HK
and guide our actions, decisions, and interactions on a daily basis. These core
values reflect our commitment to ethical conduct, client satisfaction, service
excellence, teamwork, and continuous growth in our pursuit of providing
exceptional recruitment solutions in the Hong Kong market.
(1) Integrity: We are committed to conducting all our business activities

with the utmost honesty, transparency, and ethical behaviour. We
prioritise trust and reliability in our interactions with clients, candidates,
and colleagues. Upholding integrity ensures that our relationships are
built on a strong and unwavering foundation of trust.
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(2) Client-centric approach: Our clients are at the heart of everything we do.
We prioritise their needs, goals, and satisfaction above all else. We strive
to understand their specific talent requirements, challenges, and objectives.
By consistently delivering valued and tailored solutions, we aim to exceed
our clients' expectations and build enduring partnerships.
(3) Excellence in service: We are committed to delivering excellence in every

aspect of our service. We continuously strive to improve and innovate our
recruitment processes, ensuring that we identify and source the best-fit
candidates efficiently. We are dedicated to providing top-notch service to
both our clients and candidates, setting the benchmark for industry
standards.
(4) Collaboration and teamwork: Collaboration and teamwork are the

cornerstones of our success. We believe in the collective strength of our
team and the power of collaboration. We foster an environment of mutual
respect, open communication, and shared goals. By working together
seamlessly, we leverage our collective expertise to achieve exceptional
results.
(5) Continuous learning and adaptability: In a dynamic and ever-evolving

industry, we embrace continuous learning and adaptability as essential
values. We encourage our team members to stay updated on industry
trends, technology, and best practices. We are agile and open to change,
allowing us to pivot quickly to meet the evolving needs of our clients and
candidates.
Growth plans for Human Capital HK
Human Capital HK has thrived on its core recruitment services of recruitment selection
and, but there is an emerging demand for a wider array of human resource services,
including training, employee onboarding, employee and employee engagement and
performance support solutions. The current narrow service spectrum could mean
missed opportunities and revenue streams. Competitors who provide a one-stop
solution for all an employer client human resource needs is likely to have an edge,
drawing clients seeking comprehensive solutions under one roof.
Therefore, the board of Human Capital HK have formulated the following

considerations for growth. Each contain strategic and operational directions
and guidance.
(1) Market expansion in Hong Kong
Diversify industry specialisation: While retaining our core strengths,

explore new industry sectors within Hong Kong. This includes emerging
sectors like e-commerce, green technology, and biotech. Specialisation in
these growing industries can open up new opportunities.
14
Local expansion: Consider opening satellite offices in key Hong Kong regions
like Kowloon and the New Territories. This physical presence can enhance local
market penetration and accessibility to clients and candidates.
New partnerships and alliances: Collaborate with local businesses, industry

associations, and professional networks to expand our reach and enhance
brand visibility within Hong Kong.
Invest in technology: Continuously invest in advanced recruitment technology

and data analytics to stay competitive and streamline operations.
(2) Recruitment service development
Value-added services: Expand the range of services offered to clients. This

could include talent assessment and development, workforce planning, and
consulting on HR best practices.
Executive search: Consider offering executive search services to cater to

high-level executive placements, enhancing revenue potential.
(3) International expansion
Market research: Conduct thorough market research to identify target

international markets with strong demand for recruitment services. Consider
factors such as economic stability, industry growth, and legal/regulatory
environments.
Strategic alliances: Form strategic alliances with international recruitment

firms or establish partnerships with local businesses in the target markets. This
can provide insights, resources, and access to local talent pools.
Localised branding: Develop a localised branding strategy for each

international market to resonate with local audiences while maintaining the
core values and quality that Human Capital HK is known for.
Compliance and regulations: Understand and comply with local labour laws,
immigration regulations, and business licensing requirements in each target
market.
Cultural competency: Train and educate staff on the cultural nuances and
expectations of the target markets. This ensures effective communication and
relationship-building.
(4) Talent development
Invest in employee training: Develop a comprehensive training program for

employees to enhance their skills in recruitment, market analysis, and customer
relationship management.
Attract top talent: Attract and retain top-tier recruitment consultants to

strengthen the team's expertise and client relationships.
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(5) Branding and marketing
Online presence: Invest in a robust online presence, including an updated

website, social media profiles, and content marketing to increase brand
visibility.
Client testimonials: Showcase success stories and client testimonials to build

credibility and trust.
Enhanced networking: Actively participate in industry events, conferences, and

trade associations to establish the company as an industry thought leader.
(6) Listing on the Hong Kong Stock Exchange
The CEO of Human Capital HK harbours ambitious aspirations to achieve a

coveted listing on the Hong Kong Stock Exchange within the next 3–5 years.
The company's remarkable growth trajectory, unwavering commitment to
excellence, and the visionary leadership of Natalie Wong all contribute to its
solid foundation for realising this audacious goal. As it ventures into the
future, Human Capital HK remains steadfastly dedicated to its core values of
personalised service, industry expertise, and the cultivation of exceptional
client and candidate relationships.
Sustainability performance
The CEO, Natalie Wong, has told the board that she would like Human Capital
HK's sustainability performance to be more transparent and measurable so
its sustainability credentials can be used to attract new clients, finance,
and investors.
Natalie believes that by implementing new sustainability metrics, Human Capital

HK can demonstrate its commitment to diversity, employee engagement, ethical
practices, environmental sustainability, supplier diversity, social impact, and
good governance.
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EXHIBIT 3: Human Capital HK Ltd: Board of directors and

organisation
Human Capital HK has a small board of directors comprising of the CEO, six executive
directors, the non-executive chair and two independent non-executive directors,
as follows:
Chief executive Non-executive

officer (CEO) chair
Natalie Wong Wei Loh
Two
Sales and Legal and Human Information independent,
Operations Finance
marketing compliance resources technology non-executive
director director
director director director director directors
Adam Lin Sophia Chan Maria Tang Philip Chan Han Sim Lee Ho (INEDs)
See table below
The executive directors are involved in day-to-day management of the business and
deal directly with heads of department on a daily basis.
The non-executive directors work on a part time basis and participate in the majority
of board meetings and fulfil non-executive roles on the audit, nomination, and
remuneration committees.
Further information concerning each director is set out in the table below.
Name Board role Gender Age Background

Natalie Chief Female 45 Natalie Wong joined Human
Wong executive Capital HK five years ago. Prior to
officer that, she was sales director for a
successful recruitment agency for
over ten years, where she had a
reputation for 'straight-talking' and
achieving results.
Sophia Finance Female 38 Sophia Chan is an HKICPA qualified
Chan director CPA (Certified Public Accountant)
with significant external audit and
internal audit experience, in the
recruitment and corporate training
sector. Sophia Chan has played a
pivotal role in overseeing the
company's financial performance.
The financials for the year ending
30 November 2024, stand as a
testament to the company's
17

financial stability and growth. Such
robust financial health positions
Human Capital HK favourably as
it sets its sights on a future listing
on the prestigious Hong Kong
Stock Exchange.
Adam Lin Operations Male 29 Adam Lin has been the operations
director director of Human Capital HK for
almost two years. He joined the
agency following several years with
another small Hong Kong based
recruitment agency.
Maria Tang Sales and Female 34 Maria Tang has been the Sales
marketing and marketing director of Human
director Capital HK for just over one year.
She was recruited personally by
Natalie Wong for her successful
track record in significantly
growing revenue for another
agency in Hong Kong by increasing
client relationships and investment
in international markets.
Philip Chan Legal and Male 42 Philip Chan is an executive
compliance director who heads the legal
director team at Human Capital HK. Philip
was a lawyer in his earlier career
and held the role of head of
legal and compliance at various
companies before joining Human
Capital HK. Philip is the spouse of
Sophia Chan.
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Han Sim Human Male 37 Han Sim joined Human Capital HK
resource four years ago and possesses
director significant experience in human
resources including recruitment,
training and employee
development and recruiting
from international markets.
Lee Ho Information Male 40 Lee Ho has led the IT department
technology (IT) at Human Capital HK for over
director six years. His role likely involves
overseeing the IT infrastructure,
implementing new technology
solutions, ensuring cybersecurity,
and managing the IT team and has
experience in driving digital
transformation.
Wei Loh Independent, Male 58 Wei Loh is an experienced as a
non-executive past CEO in the recruitment sector
chair and has chaired several boards
before joining Human Capital HK
three years ago.
Changying Independent, Female 44 Changying Peh is a joint-CEO of a
Peh non-executive small, start-up technology and
director communications company. She
supplements her professional
career portfolio with two other
non-executive director roles.
Kyaw Independent, Male 49 Kyaw Kumar recently joined as
Kumar non-executive a non-executive director in
director January 2022. His background is
in corporate training and
development industry.
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Executive board meetings
The executive board has monthly scheduled board meetings for all executive and
non-executive directors.
Organisational structure
Human Capital HK organisational structure is summarised as follows:
Main board of Nomination Remuneration

Audit comittee
directors committee committee
Human Sales and Information

Legal and
Operations resources Finance dept. marketing technology
compliance
dept. dept. dept
Human Capital HK has a main board of directors, a nomination committee,

remuneration committee and audit committee.
Human Capital HK is organised by function (see diagram above). Each function

represented by a director at board meetings.
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EXHIBIT 4: Human Capital HK Ltd management accounting for

the year ended 31 March 2024
To: The board of directors of Human Capital HK Ltd
From: Sophia Chan, finance director
Date: 14 April 2024
Subject: Human Capital HK management accounts for the year ended

31 March 2024
Dear fellow board members,
Please find extracts below from summary management accounts for the year ended
31 March 2024 together with relevant operating data.
Statement of profit and loss Human Human

Capital HK Capital HK
Year ended 31 March 2024 2023
HK$'m HK$'m
Revenue (Note 1) 282.1 261.7
Costs: (Note 2)
Employee and related employee costs (108.3) (97.5)
Other costs of recruitment service provision (28.3) (27.6)
Depreciation of property, plant, and equipment (6.3) (6.2)
Marketing and other selling activities (41.4) (37.5)
Overheads and administrative expenses (60.3) (54.5)
Operating profit 37.5 38.4
Finance costs (Note 3) (9.0) (9.0)
Profit before tax 28.5 29.4
Tax (4.5) (4.7)
Profit after tax 24.0 24.7
Other operating information 2024 2023

Permanent candidate placements per annum 1,298 1,188
Number of active employer clients 38 35
Net asset value (HK$'m) 550.0 520.0
Value of outstanding loans (HK$'m) 180.0 180.0
Client satisfaction rating (out of 5) 4.71 4.78
Number of employees 794 743
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Notes to the management accounts
Note 1: Revenue recognition
Revenue is recognised when recruitment services, as stipulated in service contracts,

are provided to the clients. Payments due from customers are based on the agreed
billing terms.
Note 2: Costs
Employee and related costs: These costs comprise of all employment related costs
which include payroll costs and other employee benefits, recruitment, and training
costs.
Other costs of recruitment service provision: This cost category covers costs
directly associated with recruitment services, such as candidate sourcing tools,
background check fees, job advertising expenses, and specialised software and IT
costs necessary for recruitment activities.
Depreciation of property, plant, and equipment: These costs relate to annual cost
of utilising all necessary tangible non-current assets required at Human Capital HK
over their estimated useful economic life.
Marketing and other selling activities: These costs include expenses for promoting
the agency's services, such as digital marketing, print advertising, event sponsorships,
and public relations campaigns. It also covers sales-related activities like client
meetings, networking events, and sales team expenses.
Overheads and administrative expenses: These costs include property related

costs including lease charges, maintenance, and utility costs and also include the
provision of Information technology systems.
Note 3: Loans
On 1 April 2020, Human Capital HK commenced an eight-year 5% fixed rate loan with
Hang Seng Bank for HK$180 million. The loan is repayable in full at the end of the
8-year term. The loan is secured on Human Capital HK non-current assets up to the
value of the outstanding loan, in the event of default. The loan carries no significant
covenants or conditions.
I will leave it to Adam Lin as operations director to explain the main drivers of
2023/24 performance as I just process the numbers.
I hope you find this information useful.
Best wishes,
Sophia
22
Exhibit 5: Human Capital HK Ltd performance review for the

year ended 31 March 2024
To: The board of directors of Human Capital HK
From: Adam Lin, operations director of Human Capital HK
Date: 30 April 2024
Subject: Review of Human Capital HK 2024 performance
Dear board of directors,
To accompany the 2024 management accounts, which were circulated yesterday, the
following is my review of the 2024 performance.
This year, I am pleased to report that Human Capital HK saw a rise in candidate
placements. This increase in 2024 is due to the growing demand for employee
placements in Hong Kong, driven by higher-than-anticipated employee turnover
locally and internationally, as employee opportunities in all markets have increased
with companies taking advantage of post-COVID economic growth. We also
witnessed an increase in the number of employer clients in our client portfolio,
which has raised demand for our recruitment services, the main driver of our
revenue growth in 2024.
However, we have struggled to increase our candidate placement commissions

and other recruitment fees, as many employers are not significantly raising salaries
for vacant positions. There is also significant price competition among recruitment
agencies in the Hong Kong market, to which Human Capital HK is not immune,
despite the high-quality services we offer, a key selling point to our employer
clients.
Our revenue growth has been dampened as some of our employer clients have
not significantly increased their employee requirements this year, and we have
observed that some of our employer clients are seeking services from other
recruitment agencies, which is something we need to investigate further. Also, there
has also been an increase in the time required to fill vacant employment positions
which is attributed to a reduced supply of suitably skilled and experienced
candidates across all industry sectors.
One particular disappointment for the board has been the slight fall in our customer
satisfaction rating. We value our client service delivery and reputation above all else,
as these are critical for maintaining and expanding client relationships vital for
sustainable future profitability. We will be conducting focus groups with our
employer clients and customers, so we can make changes and provide training
to ensure our employer client service delivery remains market leading.
23
In 2024, we expanded our recruitment consultant workforce in line with our

employer client requirements, ensuring that our employee base has sufficient
capacity to take advantage of market opportunities in 2025. This year, our expanded
workforce has delivered value for money as we implemented a policy of low salary
increases in 2024 to ensure that Human Capital HK remains competitive. We believe
our salaries are now in line with other Hong Kong-based recruitment agencies. We
also believe that employees choose to work at Human Capital HK for other benefits,
the workplace environment, and the opportunity for personal skills development
and promotion.
While our debt levels remained unchanged in 2024, Human Capital HK has the
capacity to borrow further, as we have an excellent relationship with our current
bank. Therefore, we are poised to take advantage of market opportunities as they
materialise in 2025 and beyond.
Best wishes,
Adam Lin
Operations director, Human Capital HK
24
EXHIBIT 6: Human Capital HK Ltd options for strategic growth

Email from sales and marketing director of Human Capital HK, Maria Tang, to
the board, outlining two possible strategic options for consideration
To: The board of directors of Human Capital HK

From: Maria Tang, sales and marketing director, Human Capital HK
Date: 1 May 2024
Subject: Strategic options
Dear board of directors,
I wish to bring to your attention two potential strategic options for growth for the
board's consideration.
Strategic option 1: A potential merger between Human Capital HK and

TalentHUB
TalentHUB has been a force in the Singapore market for eight years, earning a
commendable reputation for its specialisation in the engineering and construction
industry sectors. In many ways, TalentHUB's services in the Singaporean recruitment
market mirror those offered by Human Capital HK in the Hong Kong market.
Recently, the CEO of TalentHUB approached our board with a proposal for a
discussion, expressing interest in the possibility of a merger between Human Capital
HK and TalentHUB. Their perspective is that by merging our strengths, particularly
based on relative equity values, we have the potential to emerge as a powerhouse
recruitment agency in the Asia region. The CEO of TalentHUB believes an equal equity
share between the two companies would be reasonable merger terms given their
similar size and potential for growth in both the Hong Kong and Singapore markets.
Such a merger would enable Human Capital HK to amplify its service portfolio,
diversify its clientele, and tap into TalentHUB's deep industry expertise, efficient
systems, refined processes, and their robust client relationships. More than just
expanding our market footprint, this merger stands to offer significant synergistic
benefits and economies of scale, fostering operational excellence and bolstering
profitability for both entities.
In terms of branding, the CEO of TalentHUB proposed that the merged entity could
adopt the name 'CapitalTalent Group' to represent our combined strengths in both
the Hong Kong and Singapore markets. However, there is also the option to retain
and operate under the established brand names of Human Capital HK and
TalentHUB.
Should both boards give the green light to this merger, it would significantly expedite
Human Capital HK's ambitious growth strategy to fortify our status as a top-tier
recruitment consultancy in Hong Kong. This move would also bolster our market
25
presence across various sectors, laying a solid foundation for sustained growth in
revenue, profits, and capitalisation. Such a trajectory aligns with our vision of a
potential future Main Board listing on the Hong Kong Stock Exchange (HKEX). It is
anticipated by the board of Human Capital HK that the merged entity would be
registered in Hong Kong, facilitating a potential HKEX listing in the future.
Our immediate task would be to conduct a thorough evaluation, focusing on the

non-financial advantages and disadvantages of a potential merger with TalentHUB,
as valuation and price negotiations would be considered only if the initial evaluation
is promising. Also, we should also complete competitor benchmark financial
analysis of TalentHUB's recent financial results with our own.
Strategic option 2: Launch a dedicated team to provide recruitment services for

international based candidates relocating to Hong Kong
With Hong Kong increasingly being seen as a global hub for businesses and talent,
there is a growing influx of international candidates keen on relocating here. While
we have successfully placed numerous such candidates in the past through our
existing recruitment operations, their transition journey, from job application to
settling in, this service has often been fragmented, leading to unnecessary stress and
inefficiencies.
Proposed new services
To address this, I propose we launch a dedicated team to provide recruitment

services tailored specifically for international candidates.
Our end-to-end solution will introduce the following new services, in addition to
existing recruitment selection.
• Working visa arrangements: Streamlining the visa application process to

ensure timely approvals and a hassle-free experience.
• Employment contracts: Assisting both employers and candidates in drafting

contracts compliant with local laws and international standards.
• Relocation services: Partnering with trusted agencies to facilitate

accommodation searches and the transfer of belongings, ensuring a smooth
transition.
• New role orientation: Curating customised programs to help candidates

understand Hong Kong's work culture, expectations, and integrating them
seamlessly into their new roles.
• Training modules: Providing candidates with specific training, if necessary, to

bridge any skill gaps and enhance their efficiency so they are capable of working
effectively for their new employer.
26
Launch timeline
I suggest we target a launch date of 1 January 2025. This gives us an approximate

six-month window to:
• Initiate market research to understand potential demand and pricing strategies.
• Finalise partnerships (relocation agencies, training providers).
• Set up the required internal teams and processes.
• Procure new recruitment software.
• Develop marketing and promotional materials.
• Recruit new talent and conduct training.
• Conduct a soft pilot to refine our offerings.
• Launch a communication plan for our existing clients and supporting marketing
campaign for the wider market.
• Gather internal feedback on the proposal.
Again, the first step is to understand the strategic and operational advantages
and disadvantages of this proposal for expand our recruitment services in the
Hong Kong market.
I look forward to discussing further at the next board meeting.
Kind regards,
Maria
27
EXHIBIT 7: TalentHUB
Email from operations director of Human Capital HK, Adam Lin, to the finance
director, Sophia Chan
To: Sophia Chan, Human Capital HK finance director

From: Adam Lin, Human Capital HK operations director
Date: 3 May 2024
Subject: TalentHUB
Dear Sophia,
It seems we may have something to learn from TalentHUB as they appear to be

outperforming us in terms of market growth, profitability and operational efficiency
and I would like to understand more.
It would be very helpful if your finance team completed a competitor benchmark

financial analysis using the same criteria, we use to evaluate our own financial
performance, as follows:
(1) Revenue growth (%)

(2) Employee costs/revenue (%)
(3) Employee cost per employee (HK$)
(4) Operating profit margin (%)
(5) Revenue per placement (HK$'m)
(6) Revenue per client (HK$'m)
(7) Revenue per employee (HK$'m)
(8) Interest cover (%)
(9) Return on capital employed (%)
(10) Client satisfaction rating (out of 5)
To help with this, the board of TalentHUB has provided Human Capital HK with
the following performance results for the year ended 31 March 2024 under a non-
disclosure agreement which the board has signed in relation to possible merger
discussions.
TalentHUB's statement of profit for the year ended 31 March 2024 has already been
converted into Hong Kong dollars by their finance team which will aid a comparison
with our own company.
28
Statement of profit and loss TalentHUB TalentHUB

Year ended 31 March 2024 2023
HK$'m HK$'m
Revenue 238.7 215.7
Employee and related employee costs (91.9) (80.5)
Other costs of recruitment service provision (27.1) (26.0)
Depreciation of property, plant, and equipment (5.3) (5.2)
Marketing and other selling activities (47.7) (46.0)
Overheads and administrative expenses (37.8) (33.7)
Operating profit 28.9 24.3
Finance costs (6.0) (6.0)
Profit before tax 22.9 18.3
Tax (3.6) (2.9)
Profit after tax 19.3 15.4
Other operating information 2024 2023

Permanent candidate placements per annum 1,027 952
Number of active employer clients 31 29
Value of net assets (HK$'m) 350.00 300.00
Value of outstanding loans (HK$'m) 120.00 120.00
Client satisfaction rating (out of 5) 4.38 4.32
Number of employees 693 626
29
EXHIBIT 8: New chairperson of the board of Human Capital HK

The search for the new chairperson
The chairperson of the board of Human Capital HK has officially communicated their
intention to step down by the end of the upcoming financial year, in a conversation
with CEO Natalie Wong. This impending transition presents a pivotal moment for the
company, as it ushers in the need for a new leader to guide the organisation into its
next chapter.
Human Capital HK, currently under private ownership, finds itself at a crossroads. The
company is contemplating the possibility of listing on the Hong Kong Stock Exchange,
a strategic move that demands a chairperson who possesses the readiness and
expertise to navigate the complexities of such a transition. While the organisation
currently operates as a private entity, it is essential to recognise that this status will
evolve should Human Capital HK choose to proceed with a listing, especially in the
event of a merger with another agency, such as TalentHUB.
The appointment of a new chairperson is seen as a pivotal step by the CEO, Natalie
Wong, in enhancing the agency's governance and strategic decision-making. The
incoming chairperson will play a crucial role in reinforcing governance practices
within Human Capital HK, laying the groundwork for growth, and potentially leading
the company through the process of becoming a publicly listed entity on the Hong
Kong Stock Exchange. Therefore, Human Capital HK are seeking to hire externally for
this position.
A selection of accomplished candidates has been shortlisted for the position of

chairperson, each bringing a unique blend of skills and experiences:
Candidate 1 – Lim Wei Xiong: Lim Wei Xiong, a 67-year-old male, retired three years
ago as the finance director of TalentHUB. With a wealth of experience in financial
management and a deep understanding of the recruitment industry, he brings
valuable insights to Human Capital HK. His tenure at TalentHUB showcases his
commitment to the sector's growth and stability. Lim Wei Xiong aims to contribute
his expertise in financial governance and strategic planning to ensure Human
Capital HK's continued success.
Candidate 2 – Tan Li Tang: Tan Li Tang, a 54-year-old female, is currently serving

as a non-executive director for a training and development company. Her diverse
board-level experience and keen interest in talent development align well with
Human Capital HK's mission. Additionally, she is the sister of Human Capital HK's
sales and marketing director, providing her with an inherent understanding of the
agency's vision and goals. Tan Li Tang seeks to contribute her expertise in leadership
development and governance to foster a culture of excellence within the board.
30
Candidate 3 – Chan Mei Ling: Chan Mei Ling, a 45-year-old female, is an ex-CEO
from the IT industry and currently serves as a non-executive director for four other
listed Hong Kong companies, including one listed recruitment service company.
With a comprehensive background in diverse industries and a proven track record
in executive leadership, Chan Mei Ling is an accomplished female leader with a
strong vision for talent development and innovation.
Candidate 4 – Wong Chun Ho: Wong Chun Ho, a 58-year-old male, holds the
position of operations director at a large Hong Kong listed property company,
which also happens to be the leaseholder for Human Capital HK's current business
premises. His experience in property management and operations complements
Human Capital HK's growth strategies, especially if the company plans to expand its
physical footprint. Wong Chun Ho envisions aligning Human Capital HK's operational
efficiency with industry best practices, fostering a conducive environment for talent
development.
Candidate 5 – Loh Xi Wen: Loh Xi Wen, a 54-year-old female, was one of the
founding members of Human Capital HK. After leaving the agency four years ago
to set up her own recruitment firm, which she subsequently sold to Xceed, a
Hong Kong-listed recruitment agency, Loh Xi Wen retains a 2.5% shareholding
in Human Capital HK. Loh Xi's entrepreneurial spirit and deep understanding of
the agency's roots make her an invaluable candidate.
Candidate 6 – Teo Yew Meng: Teo Yew Meng, a 68-year-old male, was the former
audit partner for Human Capital HK until his retirement four years ago. His expertise
in financial oversight and regulatory compliance can significantly enhance Human
Capital HK's governance. Having been associated with the company, Teo Yew Meng
holds in-depth knowledge of its financial practices and corporate culture. Teo Yew
has stated on his social media that his aim in his corporate roles has been to ensure
best practice in the areas of transparency and ethical conduct.
The selection of the new chairperson is a critical decision that will impact on the
future direction and success of Human Capital HK. It is imperative to consider each
candidate's unique strengths, experiences, and potential contributions to the
agency's governance and strategic growth, all while keeping an eye on the horison
of a potential listing on the Hong Kong Stock Exchange.
31
EXHIBIT 9: Business case for investing in cloud-based ERP

system and contractor services
CONFIDENTIAL MEMORANDUM
To: The board, Human Capital HK Ltd

Prepared by: Lee Ho, IT director
Date: 1 May 2024
Subject: Enterprise resource planning system business case
Dear all,
Our use of information technology (IT) has evolved with the business to meet
immediate operational needs and to allow immediate plans to be rolled out.
The company is characterised by different systems and databases in different
departments, variously managed by users and the IT department. We have resisted
standardisation on the basis that each user, group, and department should use
IT to further their own objectives. Whilst IT currently serves us well, it does not
provide a platform for growth and will act as a barrier to us achieving our ambitious
growth plans.
Proposal
The vast majority of current independent systems should be replaced with one
architecture – an enterprise resource planning system (ERP system) – that has one
Data Warehouse underpinning it (i.e. one large database to act as a repository for the
whole company).
All users, groups and departments would be connected to and through the one
organisation wide database, and the different user needs will be met by the
acquisition of 'bolt on' modules designed to use the underlying database and
to communicate seamlessly with other modules. Available modules are very
varied, and include traditional business functions (e.g. finance, marketing and
customer relationship management, human resources) but also include innovative
reporting tools with globally sourced data, and big data analytics using artificial
intelligence.
Access to the ERP system would be via the cloud. Users will log in using a web-browser
with two-part authentication on an encrypted link. The ERP system would be hosted
and maintained by a global third-party data centre on a scalable subscription basis
and implemented by a consultancy team selected through a rigorous tender process.
Keeping all our data in one place will enable us to exploit it much more easily, as
currently there are pockets, or silos, of data dotted throughout our business in
unconnected stores.
32
The cloud-based aspect would mean that not only could our employees access their
systems from anywhere with an internet connection, but it would also make it
inherently easier for us to work with outside parties, such as outsource service
providers and clients, going forwards.
The system would be inherently scalable – we can increase the resource we need
simply by increasing our subscription, and we can add or take away functional
modules (for example, such as payroll processing) as we want.
The ERP system will provide a platform for growth – there will be many other new
applications and ideas we can exploit further down the line, but this investment will
provide the basis we need for growth going forwards.
Cost
The initial work is likely to cost in the region of $30 million – the majority of this will be
consultancy fees in tailoring the new system to our needs and transitioning
information and processes.
Investment in new equipment will be minimal (as only web browser functionality is
required for access) although some existing equipment will need to be decommissioned.
Inevitably the implementation will necessitate:
• An existing process review to ensure current processes are fit for purpose and
can translate onto the new ERP system
• Data cleansing and remodeling before we transfer it into the new system
• Training and an allowance for learning curve effects
Monthly costs (including ERP system subscription and support fees, and our own IT
maintenance and support costs) are likely to be in the region of $1 million.
Timelines
Assuming tenders are awarded on 1 July 2024, I would estimate a go live date of
1 July 2025. It will take time to migrate our data and processes. However, the new
solution should last us for at least ten years, maybe more. Plus, if in ten years' time
we decide to change to a different ERP system, we will already be well set up on one
cloud-based solution, making future migration work much simpler.
Next steps
An agreement in principle is sought from the board at the next board meeting so
that we may appoint a consultancy team to help us write the invitation to tender
document that we will send out to potential providers. This external help is required
to help us specify our needs exactly and ensure a smooth delivery process.
Best regards,
Lee Ho
33
EXHIBIT 10: Marketing proposal for digital recruitment

services
To: The board, Human Capital HK
From: Maria Tang, sales and marketing, Human Capital HK
Subject: Proposed digital recruitment services
Date: 5 May 2024
Dear fellow Human Capital HK board members,
At Human Capital HK, we recognise that the pursuit of innovation and operational
excellence is imperative for us to maintain our market and competitive position and
provide foundation for future growth in a service sector where technology will
provide significant advantages and operational efficiencies. Soon artificial intelligence
(AI) and robotic process automation (RPA) will be vital technologies used by all
thriving recruitment agencies and Human Capital HK intends to adopt AI and RPA as
part of our journey towards becoming a fully digitised recruitment agency. This will
allow us to grow and expand internationally.
Human Capital HK's proposed digital recruitment services product is set out in
Appendix 1.
There is a growing arm of the tech industry we can work with to write the software we
need. Its capacity is limited at present, so we need to move now. Initial costs will be
high (many new and smaller firms will find it prohibitive), but this is investment for
the future. The market is split between clients who prefer face-to-face, and clients
who want the convenience and effectiveness of a more digitised approach. We need
to cater for both as clients have plenty of choice as to who they can procure their
recruitment services from and are free to switch relatively easily if we do not keep
them happy.
The board's insights will be invaluable, and I look forward to embarking on journey of
transformation at Human Capital HK which will secure our future as a leader in
recruitment services in Hong Kong and beyond.
Best Wishes,
Maria Tang
34
Appendix 1: Human Capital HK's digital recruitment services proposal
Human Capital HK's digital recruitment services product (DRS) aims to incorporate
emerging technologies, such as artificial intelligence (AI) and machine learning (ML)
algorithms, and robotic process automation (RPA) by implementing innovative
technologies and recruitment services in the following ways:
• Digital marketing led recruitment search and selection using AI and RPA
• Refined candidate screening using AI
• Online interviews
• Tailored candidate-employer matchmaking using AI
• User-friendly and personalised Human Capital HK systems and app interfaces
• Utilise robotic process automation (RPA) to achieve process optimisation
35
PREWORK ACTIVITIES
36
Prework for Session 1.1: Understanding the current

position: Strategic and risk analysis
• Analyse the Pre-seen Case Study for Human Capital HK. Read the case to be
used during the Workshop and be prepared to advise on various scenarios and
issues.
• Read Chapter 3, Strategic analysis, from the Capstone Learning and Practice
Workbook.
• Complete Prework Activity 1.
• Read Chapter 4, Effective analysis, from the Capstone Learning and Practice
Workbook.
• Complete Prework Activity 2.
Prework Activity 1 for Session 1.1: Analysis of Human

Capital HK
Required
(a) Analyse the Pre-seen Case Study below and briefly summarise the main aspects
of each exhibit of the Human Capital HK Case Study and construct a summary
big picture of the Human Capital HK using the following headings:
• Ownership and board structure

• Summary of recruitment industry in Hong Kong
• Summary of current operations at Human Capital HK
• Current business issues facing Human Capital HK
• Strategic options available to Human Capital HK
• Other significant information included in the Human Capital HK Case Study
(b) Prepare a PESTEL analysis for Human Capital HK operating in the recruitment
industry in Hong Kong.
(c) Analyse the strengths and weaknesses of Human Capital HK.
37
Prework Activity 2 for Session 1.1: Financial

analysis of Human Capital HK
• Read the Human Capital HK Pre-seen Case Study.
• Read the 'Six capitals of integrated reporting' Prework below.
• Complete the Prework Activity.
Prework reading:
Six capitals of integrated reporting
The six capitals provide a comprehensive framework for organisations to assess their
performance and create a more transparent and holistic narrative about their value
creation and impact on various forms of capital. Integrated reporting encourages
organisations to consider how they interact with and affect these capitals to foster
sustainable and responsible business practices.
There are typically six capitals identified in integrated reporting:
Financial capital:
• Definition: Financial capital refers to the funds an organisation has at its

disposal, including cash, equity, debt, and investments.
• Importance: Financial capital is essential for an organisation's immediate

and long-term sustainability, as it enables operational activities, investments,
and growth.
Manufactured capital:
• Definition: Manufactured capital represents the physical assets and

infrastructure that an organisation uses to create value, such as buildings,
machinery, technology, and equipment.
• Importance: Efficiently managing and maintaining manufactured capital is

crucial for an organisation's productivity, efficiency, and ability to deliver its
products or services.
Human capital:
• Definition: Human capital comprises the skills, knowledge, experience, and

capabilities of an organisation's workforce. It also includes aspects related to
employee well-being and engagement.
• Importance: Human capital plays a pivotal role in an organisation's success,

as a skilled and motivated workforce drives innovation, productivity, and
competitiveness.
38
Intellectual capital:
• Definition: Intellectual capital encompasses the intangible assets of an

organisation, including patents, trademarks, copyrights, intellectual property,
data, and proprietary processes.
• Importance: Intellectual capital can be a source of competitive advantage,

fostering innovation, differentiation, and the creation of unique value
propositions.
Social and relationship capital:
• Definition: Social and relationship capital pertains to the quality of an

organisation's relationships with stakeholders, such as customers, suppliers,
employees, communities, and regulatory bodies. It also includes reputation
and trust.
• Importance: Strong social and relationship capital can enhance an organisation's

resilience, market positioning, and access to resources and opportunities.
Natural capital:
• Definition: Natural capital represents the environment and ecological

resources that an organisation relies on and impacts, including air, water, land,
biodiversity, and ecosystems.
• Importance: Recognising and managing natural capital is vital for mitigating

environmental risks, complying with regulations, and ensuring long-term
sustainability in a world with finite resources.
Prework Activity
Required
Complete the following financial analysis: A performance review for Human Capital HK
for the year 31 March 2024 versus 31 March 2023.
In doing, the finance director of Human Capital HK, Sophia Chan, has requested that
you focus on the following ten performance measures only.
(1) Revenue growth (%)

(2) Revenue per placement (HK$'m)
(3) Revenue per client (HK$'m)
(4) Revenue per employee (HK$'m)
(5) Employee costs/revenue (%)
(6) Employee cost per employee (HK$)
(7) Operating profit margin (%)
(8) Interest cover (%)
(9) Return on capital employed (%)
(10) Client satisfaction rating (out of 5)
39
Prework for Session 1.2: Team management

and leadership: Leadership attributes and
leadership styles
• Read the Human Capital HK Pre-seen Case Study.
• Read Chapter 6, Effective leadership, teams, and human resource management

of the Capstone Learning and Practice Workbook.
Prework Activity for Session 1.2

(a) Recommend, with reasons, TEN leadership characteristics for the CEO which
would assist Human Capital HK to meet its objectives for growth.
(b) Explain how the following leadership styles could benefit Human Capital HK to
meet its strategic objectives whilst operating in the recruitment industry in
Hong Kong:
(1) Emotional intelligence led leadership (self-awareness)

(2) Team leadership (inclusive)
(3) Compassionate leadership (kindness and compassion)
(4) Moral leadership (ethics driven)
Note. For this Prework Activity, ignore corporate governance and sustainability
objectives.
40
Prework for Session 1.3: Business ethics and

professional negligence
• Read Chapter 7, Business ethics and professional negligence of the Capstone
Learning and Practice Workbook.
• Complete the following ICAC Fundamental HKICPA Principles of Ethics

Case Study.
Activity
As the group financial controller of a listed company with a number of subsidiaries

in a wide range of businesses, you are faced with the long-standing problem of an
outdated accounting system and inadequate software functionalities. Recently, the
group CFO tasked you with upgrading and standardising the accounting system of
the holding company and its subsidiaries. This is a large-scale project and requires
the engagement of a reliable technology company. However, since you are not
familiar with the latest technological developments in accounting system and the
procurement process, you consult the chief technology officer on how to kick off the
project. The chief technology officer identifies some technology companies for
conducting market research. You notice that one of the identified companies is
owned by Carl, one of your best friends from university, with whom you have lost
contact for years.
After several rounds of discussion, the quotation specifications are drawn up and
the invitation to quotation issued, with Carl's company being included on the bidder
invitation list. The deadline of submitting quotations is due in a week's time. You
then receive a call from Carl inviting you to a reunion dinner to catch up. During
the dinner, there are endless sharing of the good old days and updates of each
other's lives. When Carl learns that your son is in the process of job hunting after
graduation from university, he offers to refer him to a company that your son is
interested in. Carl assures that he has connection with the senior management of
the company and can help your son in securing a management trainee position.
You greatly appreciate Carl's offer. Towards the end of the dinner, Carl shares
that he recently suffers significant investment losses and is very keen to win the
contract. He tactfully asks:
'If I can secure this contract, it would be a major boost for my business and can help
me stay afloat. I really need your help. Do you have any information on the pricing of
other bidders?'
41
You have been informed by the chief technology officer that Carl's company has
a good reputation for providing high quality service at a reasonable price. Given
this information, would it be a win-win situation if you assist Carl in securing
the contract?
The day after the dinner with Carl, you receive a phone call from the group CFO
regarding the information you prepared for the application of credit facilities from
banks. As the board plans to expand the group's business extensively, a large sum of
capital is required. The group CFO wants you to 'polish' the business and financial
records slightly so that a larger loan can be obtained. As you express some
reservations about this, the group CFO says:
'This is a great opportunity to demonstrate your hard work and commitment to

the company and senior management. You will be rewarded with a pay rise and
promotion. You know, I will be retiring soon. On the contrary, if you are not with us,
I am not sure if you still fit in this company.'
What should you do?
Required
(a) Identify the ethical dilemmas that are to be resolved.
(b) Identify the fundamental principles of ethics for professional accountants

mentioned in the HKICPA's Code of Ethics for Professional Accountants that may
be violated.
(c) Discover alternative solutions by considering factors such as your relevant roles,
potential legal issues, parties affected, others' views.
(d) Recommend the possible course of actions that could be taken by the
professional accountants.
42
Prework for Session 2.1: Business acumen:

Decision making
• Read Chapter 10, Formulate business decisions of the Capstone Practice and
Learning Workbook.
• Answer the Prework Activity 2.1 Part 1: Business case for investing in a cloud-
based ERP system.
• Answer the Prework Activity 2.1 Part 2: Porter's Five Forces on a shift into digital
recruitment services.
Prework Activity 1 for Session 2.1

To: Adam Lin, operations director, Human Capital HK
From: Natalie Wong, CEO
Subject: Investment in cloud-based ERP system
Date: 15 April 2024
Dear Adam,
Further to the memo sent to board by Lee Ho on 1 March 2024, I would like you to
assist with preparing the business case for investing in a cloud-based enterprise
resource planning (ERP) system. Lee will be compiling the business case, but I would
like you to help with assessing two elements of functionality we would like to include
at the launch of the new system:
(1) Investing in big data analysis to match candidates with roles
We would like to develop a process using artificial intelligence (AI) that 'learns' by
looking at historical placements and analyses the candidate's profile compared to
the role profile to understand what made the placement successful or not. We
can then use this AI to search through our current live candidate listings and
unfilled roles and use the AI to match candidates with roles.
In time, we could consider automating the whole matching process, so a
candidate is shown roles suitable to them with no human intervention necessary.
We would acquire a standard AI module that would work with the new
ERP system, and tailor it to our needs.
(2) Contractor outsourced services
As you know, contractors are often individuals working for themselves, and we
can help with the administration of their work – for example, for a subscription
we could provide:
• Payroll
• Invoicing
• Timesheets
• Finding new contracts through our contract work placement programme
43
These would all be accessible via a portal we make available to contractors. They
would log on, and this would provide them with secure access to the ERP system so
they can access these services.
I have made Sophia Chan aware you may be contacting her for assistance with the
financial aspects of the business case, so you can focus on the non-financials for now
please.
Can you please draft the evaluation for me to review?
Many thanks,
Natalie
Required
You work in Adam Lin's team. Adam has requested your help as follows:
Evaluate each of the two applications that would run on Human Capital HK's
proposed ERP system.
Prework Activity 2 for Session 2.1

The marketing director is proposing to launch a new product – digital recruitment
services to ensure that Human Capital HK remains competitive in a more digital
future. This would be one service containing the following elements:
• Digital marketing led recruitment search and selection

• Refined candidate screening and using big data analytics
• Online interviews
• Candidate-employer matchmaking using artificial intelligence
• User-friendly and personalised Human Capital HK systems and app interfaces
• Online tools which improve digital access and touchpoints for clients
Required
Prepare an analysis of the competitive landscape for the launch of the new digital
recruitment services products at Human Capital HK into the Hong Kong recruitment
market, using the Porter's Five Forces framework.
44
Prework for Session 2.2: Business acumen:

Implementing business solutions
• Read the Pre-seen Case Study to be used during the Workshop and be prepared
to advise on various scenarios and issues.
• Read Chapter 11, Implement business solutions, of the Capstone Learning and
Practice Workbook.
• Complete the reading below.
Reading activity:
Read the below extracts from relevant management theory in preparation for the
Prework and for Workshop Session 2.2.
Change Kaleidoscope
In the realm of change management within the business world, the 'Change
Kaleidoscope' is a model that was developed by Hope Hailey and Balogun. This model
is essentially a diagnostic framework that assists managers and change practitioners
in designing and facilitating organisational change.
The Change Kaleidoscope offers a structured way to interpret and navigate through
the complexities and diversities of change within an organisation by examining a
variety of contextual features that can influence the strategic change. The model
comprises of eight different lenses or factors that can be adjusted or aligned
depending on the particular context and change requirements of an organisation:
Lenses or factors of the Change Kaleidoscope:
(1) Time. The availability and urgency of time in relation to the change initiative.
For example, a technology company may need to implement a new software
platform within three months to remain competitive, indicating a high urgency
and limited time frame for the change.
(2) Scope. The breadth and depth of the change, whether it is incremental or
transformational.
For example, a manufacturing firm deciding to adopt an entirely new
production process would be embarking on a change with a broad and deep
scope, impacting multiple facets of the operation.
(3) Preservation. Identifying aspects that need to be maintained or preserved
throughout the change process.
For example, while a healthcare organisation updates its digital record-keeping
systems, preserving patient confidentiality and ensuring uninterrupted access
to critical health data must be prioritised.
45
(4) Diversity. The variance in cultures, values, and norms across different sections
or units within the organisation.
For example, a global corporation may need to navigate through varying

cultural norms and expectations among its teams in Europe, Asia, and the
Americas during a worldwide policy change.
(5) Capability. The organisation's ability to enact change, including skills,

knowledge, and expertise.
For example, a retail company aiming to launch an e-commerce platform

needs to assess whether its team has the requisite digital marketing, web
development, and online customer service capabilities.
(6) Capacity. The availability of resources such as financial investment, technology,

and labour to support the change.
For example, a start-up wishing to expand its product line must evaluate
whether it has the financial resources, production capacity, and personnel to
manage the additional workload.
(7) Readiness. The degree to which the organisation and its members are
prepared or willing to embark on the change journey.
For example, a law firm introducing a new case management system must
gauge the willingness of its attorneys and staff to adapt to new technologies
and potentially alter established working practices.
(8) Power. The distribution of power, influence, and interests within the
organisation.
For example, where a university planning structural changes, power dynamics

among administrative staff, faculty members, and student bodies could play a
pivotal role in how change strategies are formulated and executed.
Utilising the Change Kaleidoscope
The following three steps explain how the Change Kaleidoscope model can be applied
by an organisation to understand the impacts and complexities of change.
• Diagnose the context – The first step involves using the various lenses of
the Change Kaleidoscope to diagnose and understand the unique features,
constraints, and enablers within the organisational context that might impact
the change.
• Design the change – Once the diagnostic phase has been completed,
practitioners use the insights gained to design a change initiative that aligns
with the contextual features identified through the kaleidoscope.
46
• Deliver the change – Finally, with a solid understanding of the context and a
well-designed change initiative, organisations can then move into the delivery
phase where the planned change is implemented.
In summary
The Change Kaleidoscope does not provide a standardised solution but rather
facilitates a deeper understanding of the organisational context to tailor change
management interventions appropriately.
In real-world applications, change managers and leaders utilise these lenses of the
Change Kaleidoscope to form a coherent picture of the organisational context
concerning the change initiative.
These lenses help in making informed decisions about what kind of change strategy
might be most appropriate and how to navigate through the complexities and
challenges that might arise during the change process.
Lewin's change management model

There needs to be a good process for achieving change. One approach is Lewin's
change management model of 'unfreeze – change – freeze' which Lewin developed
in the early 1950's. The three stages are:
(1) Unfreeze: This first step involves unfreezing the current situation and
creating the motivation to change. This means defining the current state of
an organisation, highlighting the forces driving change, and those resisting it,
and picturing a desired end state. Crucially, the unfreeze stage involves
making people within an organisation ready to change and making them
aware of the need (trigger) for change, and creating a readiness to change
among the workforce. A key part of this stage is weakening the restraining
forces that are resisting change and strengthening the driving forces that
are promoting change.
(2) Change: Once the organisation is culturally prepared and change is sufficiently
planned and resourced, then change processes can commence. The scale of
change will influence whether change is separately project managed or
implemented by management.
(3) Refreeze: The refreeze stage involves stabilizing (refreezing) the new
situation, by setting policies to embed new behaviours, and establishing
new standards. It is crucial that the changes are embedded throughout
an organisation to ensure that staff do not lapse back into old patterns of
behaviour. Once new behaviours have been adopted, the refreeze stage is
required to consolidate and reinforce them, so that they become integrated
into the individuals' habits, attitudes, and relationship patterns. Habituation
effects (getting accustomed to the new situation) may be achieved over time,
47
through ongoing training, practice, application, supervision, and repetition.

Also, positive reinforcement can be used to reward and validate successful
change.
The ideal is that changed strategy and processes quickly become the cultural norm
within the organisation (i.e., 'It's how we do things now').
Kotter and Schlesinger's six management styles
Kotter and Schlesinger have six management styles to try to ensure that change is
properly managed, and that any stakeholder resistance is overcome.
The six management styles are as follows:
(1) Education and

communication
(2) Participation
(6) Explicit and
and
implicit coercion
involvement
Management
style to manage
and overcome
resistance to
change
(5) Manipulation (3)

and Facilitation
co-option and support
(4) Negotiation
and agreement
48
Each management style can be used to address predicted area of resistance so

overcoming pockets of resistance is embedded into the project plan, with resources
allocated to address each expected problem. How each style can be used to
overcome resistance is explained further in the table which follows:
Management style to Explanation

overcome resistance
to change
(1) Education and If staff know what is happening in detail, with the reasons
communication for the change, then they are less likely to be unhappy
about the change. In contrast, if the employees are not
told that much about the changes, they are likely to have
to make assumptions about what is happening. It is
natural for people to assume the worst, and that there
will be a negative effect on them if there is a lack of
information.
This applies to employees but also any other stakeholders.
A supplier of the organisation might assume that they may
not be able to be a supplier in the future, if they are not
told what the changes are and how they will affect them.
Education and communication provide reassurance. This
could be more difficult if the areas are complex, say
involving complicated new technology.
It may take time and money to explain the changes and
persuade the stakeholders that the changes are necessary
and beneficial.
(2) Participation and Getting employees and other stakeholders involved in the
involvement change helps them understand the changes better and
makes them feel more involved and valued. This will
normally start with a consultation process and continue
with participation once the change is happening. This
could be that there is a change management team that
involves the stakeholders so they can see what is
happening.
The change is far more likely to work if employees
and stakeholders can gain a sense of ownership and
responsibility, and they can engage with the change and
help it happen successfully.
49

overcome resistance
to change
(3) Facilitation and Facilitation and support give employees the chance to
support upskill and get information and resources, so that they
can cope in the period of change and once the change has
happened.
This will help reduce the employees' resistance to change
by proactively addressing the fear of the unknown. It
will also reassure employees to trust they receive the
knowledge and skills they will require in their roles to cope
with the new processes and technology resulting from
change.
Facilitation and support require effort and money to
provide, and it will take the employees and stakeholders'
time. However, it will give them more confidence that they
will be able to progress in their role, due to the support
they have been receiving.
(4) Negotiation and It can be important to get employees on side as they are
agreement likely to have knowledge and skills that are valuable and
hence an organisation will not want to lose. If the
employees are resisting change, then negotiation and
agreement are valuable to get their agreement for the
changes and to positively engage in the process of change.
It could be that the negotiation can help the change
improve, though equally there may have to be some
compromise on the factors involved in the change, such
as the period of time, how much change is made and the
cost of change. This can be worth it if the core changes
happen, with employees agreeing due to the negotiation
and agreement they have had.
50

overcome resistance
to change
(5) Manipulation For the change to happen, financial or non-financial

and co-option rewards may need to be offered. This will help win over
employees, particularly the ones that are most influential
and can help the other employees to agree to change.
This can be vital if particular skills need to be retained
in the organisation.
The rewards can be for the extra time and effort that
employees have contributed to the success of the project.
The rewards can be financial or from gaining a wider or
better role.
(6) Explicit and This does not sound attractive initially but is used where
implicit coercion the other five methods above have not been successful.
This type of management style is to force change to
happen. This may need to be used where time is short, or
where money and people resources are in short supply.
People may not want the change but are likely to
participate if their job requires them to engage and
participate in the change and there will be negative
consequences for them if they do not get involved. It may
well be that the people do come around to agreeing with
the change in the end, especially if it is a success.
This approach can be risky, as there is a danger some
important staff may leave due to not liking being coerced.
However, this may give the chance for the organisation
to start over with new talent that is better fitting to the
change that has happened, with new skills and talents.

Required
Evaluate the Change Kaleidoscope variables for Human Capital HK for the project to
implement the new ERP system.
51
Prework for Session 3.1: Team management and

leadership: Creating high-performing teams
• Read the Pre-seen Case Study to be used during the Workshop and be prepared
to advise on various scenarios and issues.
• Read the attributes of effective leadership in Chapter 6, Section 2

'Organisational culture' from the Capstone Learning and Practice Workbook.
• Read the attributes of effective leadership in Chapter 6, Section 3 'Effective

teams' from the Capstone Learning and Practice Workbook.
• Complete the following Prework Activity.

Required
Evaluate the suitability and independence each of the six proposed candidates
(Exhibit 8) for the role of chairperson to the board of directors of Human Capital HK.
52
APPENDICES
53
REFLECTION AND
NEXT STEPS HANDOUTS
54
Day 1 Reflection and Next Steps Handout

• Capture insights you have gained in today's Workshop.
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• Capture two or three top-priority actions that you will start, change, continue or
stop for your attendance at Workshop Day 2.
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55

• Capture insights you have gained in today's Workshop.
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• Capture two or three top-priority actions that you will start, change, continue or
stop for your next Workshop.
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• Create an action plan to prepare for the Integrated Assignment in Workshop

Day 3.
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56

• Capture insights you have gained during the three-day Capstone Workshop.
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• Create an action plan to prepare for the Capstone Final Examination.

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57
CORE ENABLING
COMPETENCY SKILLS
SUMMARY
58
Core enabling competency skills summary

Core enabling competences Communication: The three pillars
• Your topic
Critical
• Your audience
Analysis
• Your purpose
.
Time Project
Management Management
Communication: Writing guidelines
• Be professional.
• Define your purpose.
Ethics
• Imagine your reader.
Problem
Solving
Negotiation • Choose and structure your content.
• Get to the point.
• Simplify, simplify, simplify.
Innovative
Communication
Thinking
Communication: Presentation guidelines
• Imagine your audience.
• Stick to the basics.
Ethics: Fundamental principles • Keep slides few and simple.
(1) Integrity • Be ready for questions.
(2) Objectivity • Speak with confidence.
(3) Professional competence and due care
(4) Confidentiality Critical analysis: Guidelines
(5) Professional behaviour • Identify the issue.
• Research the facts.
Ethics: Addressing ethical dilemmas • Determine relevance.
(1) Identify the ethical dilemma: • Infer based on adequate evidence.
• Manipulation • Stay objective.
• Omission • Remain curious.
• Confidentiality
• Conflict of interest Problem solving: Process
• Raise the alarm? (1) Define the problem.
(2) Identify the fundamental principle (2) Determine the root causes.
violated. (3) Involve the right resources.
(3) Discover alternative solutions: (4) Identify alternatives.
• Assess the severity of the dilemma. (5) Choose a solution.
• Identify the legal issues.
• Identify the parties affected.
• Document the dilemma.
• Take an outsider's view to see the
dilemma differently.
• Seek legal advice.
• Inform the proper authorities.
(4) Recommend a solution.
(5) Explain your choice.
59

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QUALIFICATION PROGRAMME

HUMAN CAPITAL HK CASE STUDY 5

Introduction and icebreaker • Large-group discussion

Reboot • Large-group discussion

Technical sessions • Small-group discussion

Reboot • Large-group discussion

Technical sessions • Small-group discussion

SUMMARY OF EXHIBITS Page

EXHIBIT 1: The recruitment industry in Hong Kong 7

EXHIBIT 2: About Human Capital HK Ltd 12

EXHIBIT 4: Human Capital HK Ltd management accounting for

EXHIBIT 5: Human Capital HK Ltd performance review for the

EXHIBIT 6: Human Capital HK Ltd options for strategic growth 25

EXHIBIT 9: Business case for investing in cloud-based ERP

EXHIBIT 10: Marketing proposal for digital recruitment services 34

Disclaimer: The case is based around a fictitious company, Human Capital

Exhibit 1: The recruitment industry in Hong Kong

The recruitment consultancy industry in Hong Kong is a highly competitive and

About the recruitment industry

Recruitment agencies specialise in finding qualified candidates due to their extensive

Human resource professionals and hiring managers at employer companies tend to

in-demand skills and maintains effective communication between candidates and

How does a recruitment agency help job seekers find a job?

Key activities in the recruitment consultancy industry:

Key chargeable services in the recruitment industry include:

• Talent acquisition: Recruitment firms assist companies in identifying and

• Candidate assessment and selection: Recruitment firms often conduct

• Executive search: Executive search services focus on finding and recruiting

• Temporary and contract recruitment: Recruitment firms offer temporary and

• Industry-specific recruitment: Many recruitment firms specialise in specific

(4) Maintaining candidate relationships: Building and maintaining relationships

Current industry challenges

The recruitment consultancy industry in Hong Kong faces challenges and

Hong Kong recruitment industry

Exhibit 2: About Human Capital HK Ltd

• Personalised approach: At Human Capital HK, recruitment is not a one-size-

• Industry acumen: The team at Human Capital HK possesses an encyclopedic

• Exceptional service: Human Capital HK is unwavering in its commitment to

• Candidate sourcing: While Human Capital HK excels in providing traditional

• Rigorous screening: As a testament to its dedication to quality, Human Capital

Ownership structure and leadership of Human Capital HK Ltd:

Human Capital HK is a family-owned recruitment consultancy with a history of strong

Core company values

Extract from Human Capital HK website.

(1) Integrity: We are committed to conducting all our business activities

(3) Excellence in service: We are committed to delivering excellence in every

(4) Collaboration and teamwork: Collaboration and teamwork are the

(5) Continuous learning and adaptability: In a dynamic and ever-evolving

Growth plans for Human Capital HK

Therefore, the board of Human Capital HK have formulated the following

(1) Market expansion in Hong Kong

Diversify industry specialisation: While retaining our core strengths,

New partnerships and alliances: Collaborate with local businesses, industry

Invest in technology: Continuously invest in advanced recruitment technology

(2) Recruitment service development

Value-added services: Expand the range of services offered to clients. This

Executive search: Consider offering executive search services to cater to

(3) International expansion

Market research: Conduct thorough market research to identify target

Strategic alliances: Form strategic alliances with international recruitment

Localised branding: Develop a localised branding strategy for each

(4) Talent development

Invest in employee training: Develop a comprehensive training program for