Wednesday, May 22, 2019
JKL International plc. International Human Resource Essay
INTRODUCTIONWith the trend of globalisation, the number of multi state of matteral companies is constantly increasing as considerably as kick outs (Business Recorder, 2011). kick out vigilance now is an essential issue of human resource department because it shor decennarys a large amount of budget from the corporation. It is inevitable for expatriates to face socialisation barriers in subsidiaries because of unique case cultivations in all countries over the world. discipline culture is cultural experiences, beliefs, conditioned behaviour patterns, and values sh argond by citizens of the same nation (Neale _et al_, 2006, p.26). A national culture leave aloneing significantly affect any employee running(a) in firms and furthermore, national culture pull up stakes influence the solicitude role model in a company as well accompanied with organisational culture so that cross culture management is helpful non lone(prenominal) for the supervisors decisions unless if also for employees especially for expatriates (Chen, 2006, p. 2). In the case study of JKL, it showed a range of problems in their expatriates which related national cultures and JKL will implement a British managerial establishment into its Russian adjuvant.This essay will first examine the problems and issues in managing expatriates in JKL and then pronounce the proposal from Jim Flinn, the CEO of Zagorski who will apply an total British managerial dodge into a Russian subsidiary.ORGANISATIONAL CONTEXT (CASE STUDY)JKL is a British pharmaceutical company which was founded in 1925 and it has expanded its profession by acquiring new(prenominal) pharmaceutical companies in Malaysia, India, Greece and regular army. Re centimely, JKL has made the largest acquisition of Zagorski, a pharmaceutical company in Russia.At the headquarter of UK, JKL applies a de centralise organisational structure. All managers ar mandatory to give their own opinions to avoid some draw keisters of group d ecision making which is conformity pressure in groups (Robbins and Judge, 2009, p.336). Employees ar allowed to propose valuable heads to manufacture and administrative governances as well. Supervisors will award monetary incentives (one of the physical needs) as motivation to employees and managers (Carrell, Elbert and Hatfield, 2000, p.129) if their initiatives ar judged as potential innovations.On the other hand, in subsidiaries, JKL applied localized human resource practices in order to fit local cultural values and legal outlines (Dowling, Festing and Engle, 2008, p.217) by keeping local managers with existingorganisational and managerial systems. In past years, those subsidiaries in Malaysia, India and Greece were continually making profits to JKL and JKL also regularly sent managers and specialists to those subsidiaries for expatriation in a period of time.After the acquisition of Zagorski, Dr. Jim Flinn will be the CEO who had spent last three years in the subsidiary o f USA.PART ONEEXPATRIATES MANAGEMENT AND CROSS CULTURE MANAGEMENT IN MULTINATIONAL CORPORATIONSINTRODUCTIONCulture is a popular topic in literature research and it could be described as a softw ar of the top dog (Hofstede, 1991, p. 2) .With the trend of globalisation, managing cultural differences has become an important issue in human resource management of multinational corporations. Misunderstanding whitethorn be occurred if culture differences are not well-managed even these colleagues are working in the same organisation (Hall, 1995, p.6). In the case study, seven expatriates of JKL bugger off their own problems and for JKL, there is a gamey expatriate leaving rate after repatriation (Appendix F).This essay will identify the problem of seven expatriates working in JKL and its subsidiaries and after that, rational proposals of changes will be given to them on the basis of improvements of JKLs human resource department.EXPATRIATES AND ORGANISATION PROBLEMS AND PROPOSALS FOR CH ANGESEXPATRIATESIn the case study it lists seven expatriates with their problems and in the following essay they will be numbered from A to G.A (RETURNED FROM PENNSYLVANIA, USA) tally to the case study, expatriate A was the first expatriate to Pennsylvania because of an attractive salary. The reason of returning is that expatiate A was annoyed about following managers received better recompense packages than him although they were al about doing the same works.The important problems of the human resource department of JKL are rewarding system and lack of correct performance appraisal system. Every employee believes, and most experts believe, that pay and rewards are an important part of an organisations human resource management (Harris, Brewster and Sparrow, 2003, p.91). In fact, the first expatriate to a subsidiary will face loads of difficulties in practical and then try to solve them as a pioneer (Business Wire, 1998). As a result, the first expatriate is deserved to have a bet ter compensation package than followers. As the perspective of organisation, the first expatriate may important to human resource managers because this person can be regarded as a development model of human resource management (Arusha Times, 2009, p.16).On the other hand, because of lacking effective performance appraisal, expatriate A had a lower compensation package compared with following managers and that may be the reason of the compensation package of expatriate A was retain unvarying for a long time as well. throw outs sometimes will feel unfair if performance evaluate system is not effective enough because insufficient performance appraisal system may feign expatriates uncertain of their performance especially for those hard working expats (Gordon, 2010, p.56).The possible solution of dealing this problem is establishing an effective reward system by performance appraisal (Performance -related reward system). Performance-related pay (PRP) can change the recompense from a rigid structure to a flexible way depended on performance (Harris, Brewster and Sparrow, 2003, p.94). By applying this system, the productivity of employees will be significantly increased and for expatriates, they will be motivated and morewilling to finish their assignments as well (Gielen, Kerkhofs and Van, 2010, p.299). Furthermore, accurate evaluation is also a factor which company need to take account because there is an essential link between motivation and performance appraisal (Carrell, Elbert and Hatfield, 2000, p.315).B (RETURNED FROM INDIA)The reason of expatriate B returning to UK is that his spouse and kid had enough of India subsisting and schooling as seemed to be suffering (Case Study).The main problem of the human resource department of JKL is expatriate selection especially in cross-cultural suitability and family. Cross-cultural suitability and family are two of the most crucial criteria of expatriate selection (Dowling, Festing and Engle, 2008, p.120). In cul ture aspect, Hofstedes national culture model demonstrated the main various between UK and India in power outdistance and individualism (Appendix A). According to appendix A, the power distance column in India is oftentimes in high spiritser than it in UK as well as individualism so that there maybe the reason of his spouse had enough of India.In addition, strange westsideern Europe civilisation, there is a caste system in India which cause the high power distance and many females in India basically are not regarded as equal to males (Robert _et al_., 2000, pp.654-656). Moreover, individualism in India is much less important than UK so that residents in India intend to work, study and live collectively (South Asian Studies, 2011) that is totally different to UK. As a result, the wife and child keened on back to UK because of the cultural adjustment problem while her husband was still working only with British colleagues (Case Study).The solutions will be provided here are sele cting an appropriate candidate as an expatriate and putting more emphasis on cross-cultural suitability and family requirement. Cotemporary, the family element is having more important weight in expatriate selection because of non-working factors and potential influence to working expatriates (Andreason and Aaron, 2008, pp. 386-387).C (RETURNED AFTER A-FIVE-YEAR-ASSIGNMENT AND WOULD BE move OUT IMMEDIATELY)The problem of JKL here is about repatriate management and in detail it will be related to re-entry management. In general, after completing an international assignment, an expatriate will go back to the home orbit as called re-entry or repatriation (Harzing and Ruysseveldt, 2004, p.337). However, most repatriates will cope with culture shock after they back to the home country. Using an example of India and UK here, although many British work in India as expats for its booming stinting and after their finishing assignments, back to UK, they therefore only find they cannot work under a UK context (The worldwide Herald Tribune, 2009). That may be the reason that JKL sent employee C abroad again without waver in order to avoid coping with culture shocks (Case Study).It is obviously that JKL need to improve their repatriate management and there are many models here from other multinational companies. JKL could Offer repatriation procreation, pre-departure training, and re-entry orientation to employees and their families (Liu, 2005, p.129) and expats can increase the awareness of repatriation and decrease the uncertainty after back to the home country . Moreover, JKL could prepare a bank line vacancy in expatriate management division of human resource management because expatriates have various working experiences in other countries (Berman and Ursula, 2009, pp.80-81).D (NOW functional IN GREECE AS AN EXPATRIATE)The major issue of expatriate D in Greece now is adapting the local customs and culture in Greece although JKL had a prepared pre-departure tra ining programme (Case Study). In Hofstedes national culture demonstration of UK and Greece (Appendix B), the uncertainty avoidance is extremely high and no long- precondition orientation in Greece. In the case of expatriate D, a problem of communication is occurred as well. In theoretical aspect, there four problems in cross-cultural oral communication semantics, news show connotations, tone differences and differences among perceptions (Robbins and Judge, 2009, pp.407-408) and English and Greek are classified to two different language system. As a result, it will take a longer trainingprogramme to completely learn and understand a foreign language. Likewise the body language and gestures in England are slightly different to the world, for example, a V gesture means victory or peace in many countries still in England, if the palm and fingers face inward, it means up yours especially if kill with an upward jerk of the fingers (New York Times, 1996, p.E7).Consequently, post-depar ture training is a rational option for expatriate D to continually make adjustments into Greek culture. The reason is that post-departure training is suit for expatriates living in a country which has an entirely different culture and it can accelerate accustoming another culture (Managing Training and development, 2005).E AND F (CONFUSED AFTER REPATRIATE)Expatriate E and F have similar problems after finishing their international assignments because JKL currently have no response about their repatriate (Case Study). The problem of JKL moldiness be repatriate management.The possible solution will be provided here is putting emphasis on repatriate management. In fact, in last ten years, there is an increasing number of multinational corporations focus on repatriate management while in 1990s, only a couple of(prenominal) companies would hold a re-entry discussion. According to a survey in 1997, only 27% firms supposed to hold a discussion about re-entry and it had been improved in 2 000s. In 2004, there are 86% companies intended to discuss the re-entry issue (Dowling, Festing and Engle, 2008, p.199). JKL could offer repatriate supports to repatriates such as give interaction to human resource management to increase the aesthesis of loyalty so that the company can avoid losing these experienced employees (Harzing and Ruysseveldt, 2004, pp. 343-344).G (THOUGHT GREEK DISCRIMINATE AGAINST FEMALE)From expatriate Gs case, it seems Greek dislike the idea of female even she is well qualified or experienced (Case Study). Thus, for JKL, it shallinvestigate the culture and even the working environment in Greece.From Hofstedes national culture model, UK and Greece possess almost the same figure in masculinity and Greece actually has a lower masculinity figure than UK (Appendix B). However, the power distance in Greece is much higher than it in UK which means whatever a male or female, their ideas are hardly applied to supervisors as an employee.In Greek working condition , it is amazingly to find much evidence of discrimination against female. According to an official report written by Greek Helsinki Monitor (GHM) and the universe Organisation against deformation (OMCT) (2002, pp.13-21), there are approximately 4500 rapes in working communities every year and only 6% are reported to police. Furthermore, Sexual harassment in communities is putting surface in Greece due to no specific legislation of sexual harassment. Those factors may be the reasons of Greek male employees discriminate against female in the working abode.In JKLs view, it is a challenge to solve this problem as well, one of the effective ways is sending a male expatriate instead of female employee in Greece to prevent any hidden risks in Greece and make further investigation in Greek subsidiaries.ORGANISATIONFrom the case study, JKL have a high expatriate failure rate (Exceed 46%) in subsidiaries except USA (Appendix F). JKL has paid a low attention on cross culture management bec ause it applies a localised managerial system and most managers in the subsidiaries are from the host countries. In fact, many multicultural corporations which apply localised managerial system have the same issue in manage culture difference (National Centre for Vocational development Research, 2006, p.1).According to Brunstein (1995, pp. 275-280), a localised managerial system will positively fit the local context and it is easier to bring profit like autonomy units in a shorter of time than centralised management system. However, the drawbacks are employees especially the expatriates from the parent company will probably face a hugeculture shock in the subsidiary if their cultures are totally different. As a result, JKL must release many improvements in human resource department especially in expatriate management field.If JKL continually applies a localised managerial system in acquired firms, it may only have problems on expatriates management. However, once the supervisors in tended to transplant the whole management system into a country with entirely different national culture like flag-planting, it definitely will bring a serious impact to the target subsidiary and the worst significance may like the failure of Japanisation entering UK in 1990s.CONCLUSIONThe main problem that JKL has is on its international human resource management as a part of managerial system. In the case study, seven expatriate had a range of typical expatriate problems comprising training, expatriate selection and repatriate management. Moreover, 43 per cent of expatriate left JKL after their repatriation and at least 46 per cent of expatriate cannot complete their tour in subsidiaries except USA. In short, those fundamental factors of expatriates problems are totally based on various national cultures that JKL need to take account in its cross culture management.PART TWOAPPRAISE THE change MANAGERIAL SYSTEMS OF JKL APPLIED IN RUSSIAN AFFILIATEINTRODUCTIONLike national culture s, many companies have developed their own organisational culture as well as managerial structure. Organisational structure is important to multinational corporations because it will definitely interact with different national cultures in host countries (Francesco and Gold, 2005, p.236). In the case study, JKL applies apolycentric control system in Malaysia, India and Greece and decision making authority is awarded to subsidiaries in order to avoid drawbacks on the motivation and political problems in these countries (Stonehouse _et al_, 2004, pp.382-383). As a result, those subsidiaries make profit very shortly (Case Study).This essay will evaluate Jim Flinns proposal who intends to transplant a whole managerial system from JKL headquarter to its Russian affiliate.STRENGTHS AND WEAKNESS OF JKLS AND ZAGORSKIS STRUCTURES AND MANAGERIAL SYSTEMSAt the headquarter in UK and its affiliate in USA, JKL uses a decentralised management structure and employees will be sceptred to make decisi ons on their own works (Case Study). Currently, many European multinational companies applied decentralised managerial structure and developed an organisational culture called old boys net profit with high autonomy (Bartlett, Ghoshal and Birkinshaw 2003 pp.342-343). Decentralised structure is one of the most successful management systems in transnational corporations which has experienced a long time adjustment and has generated many derivative systems. Under this system, diverse standards are made to fit specific manufacturing cases and it will enhance developing new and innovative products (Johnson _et al_, 2008, p. 166). For JKL, it is a smart as a whip choice because innovation is actually a crucial factor to a pharmaceutical company.Yet, the weak point of this system is hard to implement global business strategies because those subsidiaries are working as autonomies while Zagorski employ to apply a centralised structure which renowned for the efficiency of implements busine ss strategies. Furthermore, JKL developed a monitor system with performance appraisal in headquarter and USA which can significantly motivate employees in working place (Decenzo and Robbins, 1999, pp. 292-294). However, there are a few weaknesses of performance appraisal system. For example, a report from General Electric (GE) which applied performance appraisal system and it found that those employees who received a honest just now negative feedback from supervisors would actually not motivated them but decrease the motivation in their work(Oberg, 2000, p. 64). On the contrast, a centralised structure has a bollock bureaucracy system with a tall hierarchy and fixed official duties (Francesco and Gold 2005, pp.240-241).This structure is therefore suit for small or middle-sized companies at the starting line stage for effective control power in strategy implementation (Jeong, 2001, p. 446). One the other hand, the Economist (2004, p.33) found that with the increasing size of firms , a centralised structure will constantly lose the efficiency of decision making process through the complicated bureaucracy system and the employees will get used to receive orders from supervisors instead of expressing their own idea. In addition, there is no performance related rewards in Zagorski because a tall hierarchy management system proposed to make a uniform management system by formalised, vertical and fair control so that regulations are designed to fit every employee as a same unit (Czinkota, Ronkainen and Moffett, 1999, p.712).NATIONAL CULTURE DIFFERENCESJKL used to transplant their management system to its subsidiary in USA and it successful worked. This is the main reason that Jim Flinn, the cause manager in US affiliate wants to transplant the system to Russia again.Before making the final decision, it is necessary to analyse the reasons of this success in USA. As main economics in Europe and North America, there are many similarities in the national culture of UK and USA. According to Harris, Moran and Moran (2004, pp.297-298, pp. 437-440), free enterprise, culture affinity, English speaking, private, slap-up manners, aggressive and self-realisation are the common key denominations of American and British. Moreover, in Hofstedes national culture model (Appendix C), the national culture of USA and UK are almost the same and in uncertainty avoidance column, USA is slightly higher than UK.However, Russia is totally a different country in eastern Europe. First, employees in Russia are regarded as a kind of cost rather than a resource (Organizational Dynamics, 1999, p.75). Second, beside the language usage, all management decisions are made by supervisors in business context.Furthermore, Russian basically have a slow time sense and they intend to work collectively (Harris, Moran and Moran, 2004, pp.497-500). In Hofstedes national culture demonstration (Appendix D), Russia has a higher power distances, lower individualism, higher uncertainty av oidance and no long term orientation compared to UK and USA. From a report, Russian firms used to apply a reactor business strategy in order to meet immediate need instead of long term benefits but most of those companies are finally failed (Milles and Snow, 1978, p. 353).RELEVANT CASESAfter culture analysis, it is showed that there is a huge difference in national culture between Russia and UK. Hence, it is not sure that Jim Flinn will still succeed again in his transplanting programme.Look back at history, in 1990s, Japanisation once became a popular word in UK and Toyota established its manufacturing plant in Derby in 1992 because there was an existing skilled engineering workforce there (The Independent, 1992, p.23). During the early 1990s only about 55000 people were employed by Japanese companies in the UK (The Journal, 1999). Japanisation is a Japanese managerial system with Cost-centred Just in Time System, long term contracts, vertical integration to supplier and low labour turnover rate (Hasegawa, 2001, pp.165-166).However, once Japanese manager attempted to entirely implement this system into British subsidiaries, it was not worked effectively with British employees and many Japanese companies like Nissan finally failed in UK market because Japanese manufacturing method did not fit British economic and culture conditions with collective working method (Procter and Ackroyd, 1998, p. 241, pp.244-245). In Hofstedes national culture model (Appendix E), Japan is a collective, success oriented and long term oriented country with high uncertainty avoidance which is almost an opposite of UK.It is recommended to apply a centralised managerial structure in Russia because many most Russian companies applied a traditional production-oriented culture with strong factory patriotism just like atypical Soviet traditions (Clarke, 2004, p. 418). In 2003, IKEA open its first store in Russia and many Swedish worked in IKEA Russia as expatriates. After repatriation, th eir feedbacks are high power distance in the working place accompanied with rigid centralised management structures (Jonsson, 2008, p.34).Despite the nation culture of Russia possess a high power distance, there are some independent states in Russia which has rich unexplored natural resources such as Komi and Sakhalin actually have a more decentralised culture and many Dutch crude oil and pharmaceutical companies had established their affiliates with decentralised management structures in those regions (Condon, and Dauman, 1993, p.31).FORECASTAccording to the case study, Jim Flinn intends to use a top-down change approach to transplant the managerial structure which may be imposed in a coercive manner (Balogun and Hailey, 2004, p.27). Once Jim Flinn has completely applied the management system that used in the headquarter and USA, the employees in Russian subsidiaries have to cope with a huge culture difference from West Europe. Jim Flinn may draw attention on the success of Dutch pharmaceutical companies in Russia as mentioned before. Thus, in a short term, transition will be a main issue in Russian subsidiary and it probably will take a long time in this process. However, in a long term perspective, the management structure of JKLs headquarter may bring a range of benefits because a decentralised management system is exactly helpful in research and development department although the Russian employees are used to reluctant in changes (Case Study).CONCLUSIONThe main problem of JKLs Russian affiliate is culture adjustment if Jim Flinn transplants the whole management structure from JKL to Zagorski. In fact, national culture will strongly influence the organisational culture as well as managerial framework of a company. Changing management system in asubsidiary is not a flag-planting work because of various national cultures involved. In the first part of essay, some expatriates actually have problems on their international assignments in India and Greece. He nce, it can be estimated that, after the transplantation, many local employees working in Russia subsidiaries may have the same problems. Furthermore, many previous cases in a higher place are provided which could be used as a reference to Jim Flinn as well.CONCLUSION AND RECOMMENDATIONSThis essay examined the problems in managing expatriates in JKL and evaluated the proposal from Jim Flinn who will transplant a British managerial system to a Russian subsidiary. Through these analyses, it is concluded that national culture will influence both expatriates and organisational cultures. It is essential for multinational corporations to have a good command of human resource management because of the large proportion budget of expatriates and efficiency of implementing business strategies. 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