Human Resource Management in a Global Company

Human Resource Management in a Global Company First Chapter Introduction Groups of people see the world through their own set of assumptions, attitudes, beliefs, and values. Learn about their culture and how it formed them, and aim to understand how other culture work so that everyone can be an effective global manager. Organization from every part of the world is reaching out beyond their domestic markets to become international players. Not only is this very challenging on the business them, but it also creates a challenge for individual managers who must cope with working across geographic and cultural borders. Managing globally provides clear systems and approaches to help manage global networks and teams, and it examines the skills needed for dealing with different cultures. It teaches how to succeed in this new world. This is widely recognised that an organisational diversity is obvious and necessary nowadays because of increasing pace of economic and technological development. Organisations need to be flexible if they seek to remain competitive and want to survive in a long run. This research explores the phenomenon of diversity in one of UK’s leading super market named Sainsbury’s (London Colney). The researcher intends to examine what the policy to work with different culture people and how management manage working with diversity people in workplace in the store in last two years I have seen. 1.1 What we think about culture: Hofstede, (1991) defined culture as ‘the collective programming of the mind which distinguishes the members of one category from another’. It’s about share your beliefs, values, expectations of a particular group of people and differentiates them from a member of other groups. It can be found at many different levels. Each cultural world operates according to its own internal dynamic, principles and its own laws. As individuals, we generally only become aware of our own culture when confronted by others. Cultural differences are significant differences which have been identified across countries based on observed cultural dimensions. 1.2 Why culture consider in a multinational company: Multinational companies are completely different from export-based firms not least because of their foreign subsidiaries. Not only does physical distance pose a challenge for effective communication, but also there is the challenge represented by cultural differences. Some MNCs have regarded cultural differences as so important that they have chosen to operate as multi-domestics with decision-making, management style and product development. The attitude is that people in the subsidiaries know best and should be allowed to go their own ways. For example, the attitudes in the Dutch electronics firm Philips for most of the previous century. The downside of this approach is the fiefdom and ‘not-invented-here’ mentality, which resulted in Philips’ North American subsidiary refusing to adopt the Philips video recorder (V2000) and opting instead for the rival Japanese model. However, many MNCs, including Philips since 1987, require a much greater degree of coordination, particularly in regard to learning. To do so, these firms must develop common practices and common values. If foreign subsidiaries are to be integrated for knowledge-sharing purposes, a starting point is an understanding of the mindsets of subsidiary management and employees in terms of their work-related values. The management challenge for many MNCs is to be able to adapt their organizations to culturally distinct environments without losing organizational stability. 1.3 About an organisation: Sainsbury’s is one of the leading retail super markets with approximately 792 stores all over the UK. There are some others supermarkets (Tesco, ASDA, Iceland and Somerfield) in UK which are the competitors of Sainsbury’s. All of them are trying their best to provide good services to their customers and working under diversity workplace. For the present research the researcher has taken Sainsbury’s London Colney to study about diversity. There were many reasons to select Sainsbury’s London Colney for this research. One of the reasons was that this is a big store with 350 employees working in different shifts (morning, evening, day, night and some are working as seasonal employees). The management of this store comprises on around 20 to 30 people. This is a 24 hours store, located in the retail park and is very busy because of its location and also because this is close to M25 and people can get everything from the same store and also there is some other shop near to Sainsbury’s like M S, Next, Boots and so on. The second reason to select this store as a case study was that the researcher is working in this store in its customer services and checkouts department so the researcher as a participant has enough experience to work with different culture people in the store in the last two years. The sample size of this research (which includes on management and employees) was also easily approachable to get the relevant data. The researcher was quite hopeful that management and employees will cooperate with him for collecting data. 1.3.1 Company policy and commitment to colleagues: There is much legislation surrounding the area of diversity and at the same time this provides a minimum standard for this policy, it is the company’s intention to move beyond simple legal compliance where appropriate. This policy exists to enable a working environment in which everyone feels valued and respected in everything that they do. Innovative thinking and different ideas are critical to Sainsbury’s success and their ability to develop new ways of adding value for their customers will be greatly enhanced by the diversity of experiences and perspectives amongst their colleagues. Their ability to attract and retain the highest ability of colleagues from the widest community is essential in sustaining a leadership position. The aim of the company is that all colleagues will be able to work in a diversity environment, where they will be free from discrimination. They are managing their colleagues under the principles of fairness and objectivity, which is integrated into all of the ways. According to Sainsbury’s policy, they will not accept or ignore unfair decisions, practices or requirements that qualify or exclude an individual from meeting essential employment requirements. They include, but are not limited to, a person’s age, race, colour, nationality, ethnic origin, gender, sexual orientation, religion. The equal of men and women are monitored and action taken where necessary and appropriate to ensure parity. In line with their flexible working policy, they will make it possible for colleagues to achieve a balance between their work and home commitments. They will ensure that the opportunities presented through diversity will be integrated into the development of new products and services that add value for their customers. The performance and effectiveness of Sainsbury’s diversity commitment and demographic colleague make-up of their stores are continuously reviewed and where improvement is identified, action has been taken. Any breaches of this policy have been treated seriously and also dealt with under their disciplinary policy. 1.4 Background/Current situation: As we know, now a day’s diversity is a one of the inclusive concepts and based on valuing everyone as a unique individual and celebrating this difference. The management of diversity is about individuals. The management of diversity goes beyond equal opportunities, instead of simply allowing a greater range of people getting more opportunity. The concept of diversity embodies the belief that people should be valued for their difference and variety. Diversity is supposed to enrich an organizations human capital, whereas equal opportunity focuses on various ethnic groups. As I said before that researcher is working in Sainsbury’s (London Colney) and have seen lots of differences about diversity. There are most of the people from Asian ethnic. But we have some Irish, African, Chinese and British as well. As I work in this store I have found some favour for same ethnic group. And for that other ethnic became sometime very aggressive. And from management level, there is also some gender valuing problem. We have seen lots of female managers rather then males. But other, like they don’t differentiate between ages, disabilities, colours and so on. So far you can say, they follow the procedures and that’s why they are success in business now a days. My research is about how they manage, and do they really follow the diversity policies? So, I intend to demonstrate, how a human resource manager can manage all those area and successfully complete company’s mission with different people. All overall, a self assessment for international human resource managers to evaluate and improve their global management skills. 1.5 Aims/Objectives: The primary aim of the research is therefore: To examine diversity, equality and discrimination issues in a multinational company, in particular, the way of HR managers to manage work with different culture people. The research objectives are: To determine what’s the company policy about diversity to manage work with different culture people and to become a successful global manager, aim to develop a global outlook. To outline the development of approaches to organizational analysis. To explore a multicultural company from the perspectives of diverse social groups. An international human resource manager needs to know the way of managing people in twenty first century. We are going to take an overview of what a manager needs to do in relations to managing people in a changing environment. I will be looking at: Diversity issues. International Human Resource Management policies. Managing people in a practical way. To examine the way of recruiting, and selecting the right people. As a human resource manager, we are likely to manage other people on a one- to-one basis. This involves understanding people as individuals and recognizing their differences as well as drawing up some general principles for managing them like motivates them, job satisfaction, and job design. Having accepted that there is a range of reasons why people behave differently in a work situation and that cannot make wild and generalized assumptions about any individual’s reasons for performing better or worse than average, we will recognize that when we put individuals together into a group, the behavior of that group is likely to be changeable. So it is important that they understand about the behavior of groups. So, all overall I will be going through with literature review to practical experiences to find my research project. Second Chapter Literature Review Everyone is different in age, gender, nationality, and ways of thinking. These differences are a source of strength. The concept of diversity means respect and acceptance. It means understanding each individual is unique and recognizing our individual’s differences. It can be the aspects of race, ethnicity, gender, age, sexual orientation, physical abilities, religious beliefs, political views and so on. It is exploration of these differences in a safe positive and development environment. Diversity is about creating an all-inclusive work environment that values and benefits from different human attributes, experiences, and skills at all levels and enables all employees to develop and contribute to their full potential. It is about understanding each other and moving beyond simple acceptance to implementation and celebrating the rich dimensions of diversity contained within each individual. Diversity and equality has become a key driving force in government policies. The concepts of diversity and equality are common but still there are some differences. Diversity is the acknowledgement and respect of differences within and between groups of people. And equality is the framework that enables access, participation, opportunities and contribution that is fair and inclusive. According to Lew Platt (1993-1995) â€Å"I believe the word â€Å"diverse† includes not only different genders and races, but also different cultures, lifestyle and ways of thinking†. 2.1 Diversity Management at work: The concepts of workplace diversity include the principles of equal employment opportunity. Equal employment opportunity policies address continued disadvantages experienced by particular groups of people in the workplace, including people with disabilities and those who mistreated by co-workers on the basis of race or ethnicity. These policies remain an important foundation for workplace diversity policy. Diversity management involves systematic and planned programs or procedures that are considered to improve interaction among diverse people, especially people of different ethnicities, sexes, or cultures. And to make this diversity, a source of inspiration, complementarities, and greater organizational effectiveness should be provided rather than a source of tension, conflict, miscommunication, or limitation on the effectiveness. 2.2 Diversity Approaches: The issues that diversity representatives focus on vary by country. In some countries, the question of language is important, some countries depends on ethnic group, or may be depend on ages. ‘Managing Diversity’ is a term that entered UK debates on equality approaches in the mid-1990s. While it is becoming increasingly common in the UK, there is still disagreement about its meaning and the extent to which it differs from previous approaches. One of the things which do seem to be distinct is the way these approaches deal with differences between employees. The traditional approach to equal opportunities seeks to treat everyone the same. Managing diversity approaches recognises that employees are different and suggest that workplace can get benefit from those differences. What this means for organizations is that they need to adapt to employee characteristics rather than simply expecting from employees to fit with pre-existing policies. The more fundamental alternative would be to restructure the way work is carried out so that everyone can be flexible for that. Another example would be the approach taken to ensuring that appraisal was carried out in a fair manner. A diversity approach would take a more radical look at what types of behaviour and activity are valued by the organization to see whether these are more commonly practised by members of one group rather than another. Business case arguments for diversity share many elements with equal opportunities approaches but they tend to stress additional arguments. These have included claims that diverse teams are more innovative than ones composed of homogeneous individuals and that non-traditional workers can reflect the needs of a wider customer base. Diversity approaches also place a strong emphasis on creating a culture within which everyone feels they belong and are empowered to reach their full potential. One aspect of this inclusiveness is an attempt to find policies which seem equally relevant to all employees. The second alternative is seen as the more radical approach. It argues that there are multiple sources of difference which are as important as those based on gender or ethnicity. People are not defined by whether they are from European or Asian background but instead vary along a numerous of dimensions including personalities and tastes. This approach to managing diversity is strongly focused on individuals as the objects of equality policy and as such is in line with wider trends to individualise employee relations. 2.3 Managing people: Management is often defining as â€Å"getting things done through people† Michael Armstrong (1998). By definition, managers cannot do everything themselves. They have to rely on other people. Managers are sometimes said to spend their time planning, organizing, motivating, and controlling. In practice, the work of managers is quite fragmented. It depends demand on the situation and on the people concerned than on any academic division of the task into clearly differentiated elements. Managers dealing with people: internally with their bosses, their colleagues and their staff; externally with their customers, suppliers, professional advisers and national and local government officials. A leading writer on management, Henry Mintzberg has suggested that managers have: Interpersonal roles: acting as a leader, providing guidance and motivation and maintaining a web of relationship with many individuals and groups. Informational roles: continually seeking and receiving information as a basis for action, passing on factual information, and transmitting guidance to subordinates in making decision. Resource allocation roles: making choices about scheduling their own time, allocating task to people and authorizing actions. Disturbance handling roles: dealing with involuntary situations and change beyond their control. The human resources of an organization consist of all people who perform its activities. In a sense, all decisions that affect the workforce concern the organization’s HRM function. Human resource management concerns the personnel policies and managerial practices and system that influence the workforce. Regardless of the size-or existence-of a formal HRM or personnel department (many small businesses have no HRM department). So as an example, line managers will spend more than 50% of their time involved in human resource activities such as hiring, evaluating, disciplining and scheduling employees. But the jobs are not done yet. As a manager they need to look after employees’ performance. On the based of performance they need to motivate them, understand them and evaluating them. 2.4 Key concepts for Global Managers: The following concepts contain the underlying message of this article. These concepts have direct relevance to the effectiveness of global managers. An understanding and utilization of these concepts are critical to one’s successful global performance. Global leadership- being competent of operating effectively in a global environment and respectful of cultural diversity. This is an individual who can manage accelerating change and differences. The global leader is open and flexible in approaching others can cope with situations and willing to re-examine and alter personal attitudes and perceptions. Cross cultural communication- recognizing what is involved in one’s image of self and one’s role, values, standards, values, and expectations, which are culturally circumstance. Such a person understands the impact of cultural factors on communication. Most of the people are aware of verbal and non- verbal differences in communication with persons from another culture. Not only does such a person seek to learn another language, but also they are aware that, even when people speak the same language, cultural differences can alter communication symbols and meanings and result in misunderstanding. Cultural sensitivity- a person understands the cultural influences on behaviour. This individual behaviour translates such cultural awareness into effective relationships with those who are different. Acculturation- effectively adjusting and adapting to a specific culture, whether that be a subculture within one’s own country or abroad. Such a person knows the impact of culture shock in successfully managing transitions. Therefore, when dealing with employees from diverse cultural backgrounds, this person develops the necessary skills and avoids being ethnocentric. Cultural influences on management- understanding that management philosophies are deeply rooted in culture and that management practices developed in one culture may not easily transfer to another. Effective intercultural performance- applying cultural theory and policies to specific cross-cultural situations that affect people’s performance on jobs. Changing international business- coping with interdependence of business activity throughout the world as well as the subculture of the managerial group. The global manager appreciates the effect of cultural differences on standard business practices and principles, such as organisational loyalty. Cultural synergy- building on the very differences in the world’s people for mutual growth and accomplishment by co-operation. Cultural synergy through collaboration emphasizes similarities and common concerns and integrates differences to enrich human activities and systems. Work culture- applying the general characteristics of culture that how people work at a point in time and place. In the macro sense, work can be analysed in terms of human stages of development. In the micro sense, work culture can be studied in terms of specific industries, organizations or professional groups. Global culture- understanding that, while various characteristics of human culture have always been universal, a unique global culture with some common characteristics might be emerging. Global managers are alert to serving this commonality in human needs and markets with strategies that are transnational. 2.5 Construct area of diversity: Diversity is â€Å"the representation, in one social system, of people with distinctly different group affiliations of cultural significance† Cox (1993). Deresky (1994) also highlighted that, the differences between group members illustrated in terms of the extent such as culture, age, race, sexual orientations, gender and ethnic. There are three characteristics of construct area of diversity, which are classified employees differences. These are Demographic, organisational and socio-cognitive diversity. Demographic diversity: According to Jackson et al (1995), diversity such as ethnicity, age, nationality and gender those are considered visible attributes that can be easily characterised in particular individuals. Organisational diversity: The second category is organisational diversity. It may include: a) Staff job security in the firm. b) Work or professional experience. c) Occupation, functional or job portfolios of the employees such as marketing, production, and finance. Socio-cognitive diversity: The last category is socio-cognitive diversity, which includes cultural and religious values, knowledge level, beliefs and personalities characteristics. By establishing and organising the staff according to their distinctive attributes, it will facilitate business managers to have a more objective understanding and appreciation of their diverse staff’s behaviours, attitudes and values, given the implications for interpersonal and organisational processes and outcomes when staff members work together. As peoples values and beliefs vary individually as a result of their socio-cultural differences, this will affect organisational processes and configurations. For examples:- cross-cultural communication, management-subordinate relationships, international team management, leadership and decision-making styles, staff motivations, staff recruitment, selections and development, and other managerial functions. Apart from the jobs, employees also have differences based on their position within society. Whether an employee a man or women, from a particular ethnic group, is of a particular sexual orientations, has a disability may affect what they want from employment and what are able to offer. Some of these differences may also affect people’s access to jobs and their progress within organisations. 2.6 Discrepancies between academic research and HRM practice: While HRM executives and managers are more educated and professional than in the days when they were in charge of personnel, the level of knowledge in practicing HRM in another part. Many companies hire MBAs for HRM jobs when not even a single HRM course is required in the typical curriculum for an MBA. Recruitment: As an Academic research finding, quantitative analysis of recruitment sources using yield ratios can facilitate in recruitment. On the other hand HRM practices, less than 10% calculate yield ratios and less than 25% know how. Staffing: According to academic research findings, realistic job previews can reduce turnover and weighted application blanks reduce turnover. Alternatively, HRM practices, less than 20% of companies use RJPs in high-turnover jobs and less than 30%. Performance appraisal: According to academic research findings, do not use traits on rating forms, make appraisal process important element of manager’s job. On the other hand, more than 70% still use traits, less than 35% of managers are evaluated on performance appraisal. 2.7 International HRM: Domestic HRM is involved with employees within only one national boundary. And we define the field of IHRM broadly to cover all issues related to the management of people in an international context. Hence our definition of IHRM covers a wide range of human resource issues facings MNCs in different parts of their organisations. Additionally, we include comparative analyzes of HRM in different countries. The complexity of international HR can be attributed to six factors: More HR activities. The need for a broader perspective. More involvement in employee’s personal lives. Changes in emphasis as the workplace mix of expatriates and a local varies. Risk exposure. Broader external influences. In addition to complexity, there are four other variables that moderate differences between domestic and international HRM. These four additional moderators are: The cultural environment. The industry with which the multinational is primarily involved. The extent of reliance of the multinational on its home-country domestic market. The attitudes of senior management. 2.8 International HR policy: In spite of the corporate business strategy unique to each company that they will drive the specifies of an international human resource policy, there are certain objectives that any effective IHR policy should aim to accomplish. And these objectives are: The policy should attract and motivate employees to accept international assignment. It should provide competitive pay plans to ensure the assignee can maintain his or her accustomed lifestyle. It should promote career succession planning and include guideline on repatriation and additional overseas assignment. It should facilitate relocation between home and host location. And finally, it should be cost-effective, understanding and easy to administer. To meet these objectives, we must have internal and external programs functioning to handle the following six areas. In addition to the required technical and business skills, key traits to consider include: cultural sensitivity, interpersonal skills, and flexibility. Document and formally communicate the assignee’s specific job requirements and associated pay in an assignment letter. Identify the compensation, benefits and tax approach that meets company objectives. Some common approaches to pay include: home balance sheet, destination-based, net-to-net, flexible. Assist the assignee with disposition or management of home and automobiles, shipment and storage of household goods, work permits and pre-assignment visits. Provide cultural orientation, language training, spousal support, education assistance, home leave, and emergency provisions. As the average cost of sending an expert on an overseas assignment is between three and five times the employee’s pre-departure salary, quantifying total costs for a global assignment is essential in the budgeting process. 2.9 Integrated HR systems to develop global leaders: Companies with global human resource information systems are likely to be far better positioned to succeed in the highly competitive international market. Multinational companies often discover that, especially in newly emerging markets, local management talent is rarely available to establish and build operations. Consequently, many companies conclude that the only way to start doing business in these markets is to relocate experienced managers from around the globe. Companies doing work in the international marketplace have discovered that providing pre-departure screening and orientation is essential to achieving the highest rates of success. A human resource information system might include data on the potential training needs and past technical and cross-cultural experiences. Having such data would enhance the probability not only of selecting the best candidates, but also chances for success on the assignment, as a result having a great impact on the future development of global leaders. Because most multinational companies now require international experience in order to move up the corporate hierarchy, tracking information related to international assignment can make a important contribution to management development. 2.10 Diversity in multinational companies: The rise of multinational companies and increased global diversification by even small companies has resulted in people of diverse background and cultures working together in the same office or for the same organization. Conflict in such situations is expected, but understanding the diversity issues can help to minimize the conflict and take benefits from diversity group of people brings to an organisations. To understanding how diversity is manage in multinational organizations, try to understand the concept of corporate culture, which defines organisational diversity programs and their use to minimize conflict among employees. Companies and countries can no longer operate as if the rest of the world did not exit. New trading blocs, based on regional, not national, interests have formed with the European Economic Community and the North America Free Trade Agreement. There will be increased pressure influenced by the country culture. For examples, some corporate cultures may encourage women and men gathering together socially after work while country culture would prohibit this. A female executive from the USA might well have difficulty adapting to the rituals of her own company in a foreign country, particularly when the country culture differs greatly from the American cultures. In the case of working mothers, it is usually the woman who is responsible for picking children up from childcare (Deal Kennedy, (1982, p. 80). 2.11 Understanding crosses cultural communication: Some cultures communicate most readily via written messages, while others prefer talking. To relate successfully, understand what communication is, how it works, and how to tailor it to the cultural context into which it will be received. When we â€Å"deliver† a message. We assume that we have â€Å"communicated†. But it is often the case that what has been said is not the same as what has been heard. Although the communication may feel in control, it is the receiver who determines whether communication takes place. The outcome of successful communication is agreement about meaning. This can be difficult to achieve in cross-cultural communication where some degree of misunderstanding is expected. In relationship-focused cultures, such as those in Asia, words only convey a small part of the message; the l