26 Aug Case 2.2 Long-term development plans of a German multinationa
Case 2.2 Long-term development plans of a German multinational in the USA
A German firm had developed its activities in the electrical industry in the USA for two years and the Chief Executive Officer (CEO) Peter Hansen was happy with their current performance: market share for important products had increased significantly and progress was better than expected. The number of employees had increased, including quite a few local American managers in high-level management positions – a situation which was rather unusual for a subsidiary of a German multinational in its early stage of development. The CEO’s goal from the beginning was to avoid an ethnocentric approach to the American activities of his firm and to take a polycentric approach that supported recruitment of local managers.
One of these US local managers was John Miller, the marketing director of the company. During the last two years, he had been thoroughly prepared for his job. The company had sent him to various high-level training programs at top business schools and had provided him with a long-term career plan, which included short-term vertical career advancement. While Peter Hansen wanted to support the development of an American manage- ment style, he nevertheless tried to transfer some HR practices which are highly valued in Germany – particularly investing in training and taking a long-term intraorganizational career perspective. While some US firms took this approach, these ideas were not as widely accepted in the USA as in Germany. However, Peter Hansen assumed that these policies would be valued by the new US employees of the firm and would provide an important incen- tive for employee retention.
One morning, Peter Hansen was shocked to learn that John Miller was about to quit his job. A competitor had offered John a challenging position – in large part because he had systematically built up his knowledge and experience base, supported by his German employer. How can you interpret Peter Hansen’s surprise from a cultural point of view?
Discussion Questions:
1Relate the described situation to one of the cultural dimensions identified by Hofstede. Can you explain Peter Hansen’s surprise using this theory?
2How does this situation compare to comparable situations in your home country? What are the limits of a cultural explanation?
1. Case 2.3 Female careers in various environments
Elisabeth Harstad was employed as a trainee at the Norwegian risk management consultancy DNV when she realized that being a woman was a barrier. Although trainees were supposed to go abroad, the company had problems finding a job for Elisabeth in a foreign subsidiary: “I wanted to go to London, Houston, or Singapore. In the end I managed to get an international assignment from Oslo to Copenhagen”.
This was in the 1980s. However, Elisabeth Harstad did not give up and energetically pursued her career. She is now the manager of the research and innovation unit at DNV, and since 2006 a member of the board of directors of the large Norwegian chemical company Yara. When the new members of the board of directors were elected, for the first time it was an advantage for Elisabeth to be a woman. Since 2008, Norwegian companies are required by law to have 40 per cent female members of their board of directors. Thus, Elizabeth is part of an experiment – if women do not make it to the top on their own, politics support this process in Norway.
Discussion Questions:
1Relate the situation in Norway to one of the cultural dimensions identified by Hofstede. How can you explain it?
2Can the rules for quotas of female managers be applied in other countries as well? What are the advantages and disadvantages?
2. IHRM in Action Case 2.4 Meeting on a Friday in Kenya?
Our building company had finished an important project concerning a new major road in Kenya. However, the company had not been paid for all of the completed work. The managing director of the Kenyan subsidiary of the building corporation organized a meeting with a representative of the relevant Kenyan government agency.
The meeting started and the representative was very polite and friendly. However, at the same time he also seemed to be quite nervous. Every few minutes he received a telephone call or had to initiate a telephone call himself. All tele- phone discussions were carried out in the local language. Despite the interruptions, I tried to explain the reason for my visit – the outstanding account balance. Of course, the government representative apologized for every interruption. However, after 15 minutes we were both very tense because the conversation had not advanced at all.
Eventually I said that I was sorry that my counterpart had so much to do and asked for another meeting next Tuesday. Instantly the government representative was relaxed again and happily confirmed the new meeting. Now he could finally concentrate on the preparation and organization of his big family meeting that weekend, which is typical for large Kenyan families.
Discussion Questions:
1Relate the described situation to one of the cultural dimensions identified by Hofstede. How can you explain it?
2How does this situation compare to comparable situations in your home country? What are the limits of acultural explanation?
3. Case 5.1 International headhunting
Peculiarities occur in the selection process when external service providers are assigned to undertake the search for international managers and are involved in the subsequent selection. Whereas in the scientific literature there are hardly any discussions or ideas presented addressing this topic, in practice headhunting is a commonly used method to fill international positions. According to Hewitt’s HR Outsourcing Survey, which includes more than 100 US companies, these companies pursue four central aims with the transfer of most (national and international) HR activities to external service providers. Accordingly, most of the companies surveyed (65 per cent) indicated they want to reduce costs by outsourcing activities. Furthermore, access to external expertise is attractive to many companies, as well as improved service quality and the possibility to more intensively direct internal resources to strategic HRM. With reference to outsourcing IHRM, the survey reveals that 43 per cent of the companies revert to the expertise of external service providers for expatriate management matters and 56 per cent in repatriation issues; 3 to 4 per cent of the companies even plan to outsource these areas in the near future. Concerning recruiting, 10 per cent of the companies surveyed indicated that they already assigned their recruiting to external service providers; an additional 6 per cent definitely plan to outsource their recruiting. As there are no explicit figures available, one can only speculate how many firms make use of outsourcing for their international employee selection as well. However, the specialization of numerous headhunting agencies and management consultancies in the area of IHRM and executive search for international managers indicates a high demand in these areas.
An example is the management consultancy ABC Asian Busin
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