Career Development through International Mobility - Essay Example

Introduction Moet Hennessey. Louis Vuitton S.A. is a French business group and is commonly known as ‘LVMH. LVMH is a parent company having over 50 daughter companies and is the largest producer of luxury products in the world. Most of its daughter companies are independent in terms of conducting business activities. In return, each daughter company manages numerous well known brands of the world. The LVMH Company came into existence as a result of the merger of Moet et chandon, one of the largest manufacturers of champagne in the world, with a renowned manufacturer of cognac, Hennessey. In 1987, this group further merged with a fashion house, Louis Vuitton. LVMH is a France based group with over 56000 human resources out of which 63% employees work in different locations of the world. There exist 50 prestigious brands under this group, making it recognized as a global giant. It deals in various activities that include business in fashion goods and leather, spirits and wines, perfumes and cosmetics, watches and jewelry, among others. In this assignment, am going to major on the company of Christian dior, because it is LVMH’s major holding company. It possesses 42.38% of its share holding, and voting rights of 59.3%. Christian Dior’s mass shareholder is also the chairman of both companies. He is LVMH’s CEO. By successfully integrating various famous inspirational brands, other companies that offer luxurious products, e.g. Richemont and Gucci, which are now the division of French conglomerate, are doing the same. The assignment also covers Chateau d’Yquem, which is a part of the oldest variety of the group, the manufacturer of first-class vintage wine. Challenges facing LVMH There are numerous challenges faced by the company which can be listed as follows: Intercultural Training In order to make possible the adjustments of cross-cultures, a challenge to train its expatriates for international projects, is being faced by LVMH. Therefore, the process of adjustment, involving the training of the employee along with his/her family, would be accelerated. Currently, the language courses are being developed by both pre-departure and post-arrival training. Intercultural training needs to be completed shortly as there exists an international position that needs to be filled without nay delay. This results in the provision of very short training even to ‘culturally tough’ countries like Mexico and Brazil, where people generally get adjusted to their own cultures. Due to this short training, pressure to perform is not executed on such employees. In few cases, new joiners are helped by subsidiaries and the permission is granted to trainees for preliminary field trips. However, as per rule, before sending a candidate to an international exposure, some former international exposure, for instance, through studies or previous professional exposure, must be possessed by him. Support for Spouse The kind of business conducted by LVMH requires its employees to possess the mobility factor. Usually the employees are not found turning down international projects and assignments but it has been observed that the factor that hinders the mobility of an employee is related to the spouse. LVMH comes up with the solution for this problem. LVMH does not offer an international mobility to an employee who is likely to show reluctance due to that spouse factor. To tackle this, those young graduates are offered international assignments who are mostly single and who realize the importance of such international assignments as these are likely to help them develop effectively. Repatriation Whether an employee’s international assignment is a limited contract or an expatriation per se contract, always there is a on purpose limitation of the assignment’s length, basis being that most of the emigrants lose contact with their dwelling country, thus crafting a complexity in the repatriation. Assignments are usually confined to tenure of 2 to 3 years, so as to assist in the repatriation or the next step. In most cases, once one has begun a career with the group of LVMH, they are secured to a home foundation and all through their occupation the home base country remains the same despite of the many global moves. Gender Discrimination There exist some cultures where a man-oriented society prevails. In such societies, women are taken as if they do not exist or if they do, they are their husband’s property. For example, the mobility of women is strictly restricted in Saudi Arabia. Driving cars, travelling alone, staying in hotels or meeting other people without being accompanied by a male family member, all these situations are not allowed for women. This would greatly limit any international LVMH assignment. Child labor The term child labor here refers to the permanent employment of a child that simply eliminates the opportunity of going to school or make it extremely difficult. Around two-third of the nations of the world faces the occurrence of child labor. One of the major reasons that have made child labor so common around the world is that the resources that may secure them, such as unions and some other kinds of organizations, are inaccessible to the targeted children. LVMH’s International Transfer Policy LVMH has been a global business since the beginning. Not so later, it realized that its human resources require international skills as it was greatly lacked. The company came up with a bunch of prospective international managers possessing a working knowledge regarding global markets, in 1987, when it was found out that there were present several managers who lack fluency in English. The global managers are capable to conduct their projects from any location in the world. A global vision and skills to manage multilingual and multicultural teams result in the form of this capability. In order to have one’s skills realized and noticed, one must be able to work in different countries. Mobility instead of formal training is the best way to develop an employee in the views of LVMH. This involves vertical, horizontal and geographical moves within the company. LVMH’s international transfer policy operates as part of a scheme to develop career requiring training of managers internationally, on a basis of limited time. LVMH does not intend to go for a cost effective practice by preparing expatriates who are required to pursue their careers away from their home bases. By offering fascinating career development projects, LVMH struggles to prepare managers for international assignments, although it offers a highly competitive incentive package. The HR department of LVMH offers the manager a challenging project with much liberty than he could get at home, in order to make a manager ‘internationally mobile’. This practice facilitates to overcome language barriers and allows intercultural business to occur. It is the core requirement for LVMH to adopt such recruitment process that can gather a bunch of competent global managers who can be sent on international assignments. The company is not as successful in the global labor markets, although having attraction to French prospects. Due to this reason, the global skills of the employees can be enhanced through global recruitment. Tackling the Issue of International Adjustment To ensure smooth relocation, a logistical support is provided by the international transfer policy of LVMH, which includes finding a house, utilities, help in administrative procedures, among various others. The relocation service not only facilitates families to search schools but also help them to get through the enrollment process efficiently. To aid companies, the international transfer experts report to the suppliers, the requirements for relocation services. Support for spouse is also offered by the organization due to the fact that the many expatriates tend to turn down the offer of international assignments for the sake of their spouses. This policy is effective as there are many employees in the company who are married to non-working spouses. The problem of international adjustment is further dealt by offering intercultural training, mainly on the basis of ad hoc. The features of the host country and the experiences of past practices are considered by the companies while offering this training. Mexico and Brazil are considered as ‘culturally tough’ countries and therefore, less pressure to perform is laid upon the employees in these countries as compared to the employees in the countries having similar culture as that in France. International adjustment is also put into check by repatriation. Expatriates are offered a hypothetical home-based salary although being compensated like the locals, in order to assist their return to home country. This repatriation process commences six to one year before one is ready to return back to home. Mainly, it addresses the fears of the expatriates on return positions and career development in order to deal with issues associated with the career. As a business associate I would pay close attention to the international fiscal condition and speed up essential steps towards sustaining and gaining more market share and enhance the profitability. I would also emphasize on enhancing tangible growth of the operating income and to cash generation. I would utilize the power of the brands, the dynamic innovation policy, the quality of the commodities, the good geographical balance of the sales and the motivation of LVMH teams to be imperative in strengthening the leadership of the group in the international luxury market. Conclusions The globalization of the economy of the world has helped to reduce the entry barriers and liberalization of many markets. The group brands are heavily benefited by the entry and expansion of the markets. However, LVMH needs to build up a human resource management approach through career development and international mobility in order to set up a powerful presence in the market and to make the most of the opportunities that are arising on the rapidly growing regions. The significance of this approach can be realized by the fact that it deals with the changes, future and present, on the firm’s environmental aspects and strategic content. It is the responsibility of an organization’s management to understand the presently existing downsides of ethnocentrism which have an effect on the prospective career opportunities for the non-French employees. References Gooderham, PN & Nordhaug, (2003), International management: cross-boundary challenges, Blackwell, Oxford, pp. 316-335. Adey, P., (2006), If mobility is everything then it is nothing: Towards a relational politics of (im) mobilities, Mobilities vol. 1 pp. 75–94. Cresswell, T. (2006), On the move: Mobility in the modern Western world. London: Routledge, pp. 25-31. Sheller, M. and Urry, J., (2006), The new mobilities paradigm. Environment and Planning A vol. 38 pp. 207–226. Verstraete, G., ed. & Cresswell, T. (Eds.), (2002), Mobilizing place, placing mobility: The politics of representation in a globalized world. Amsterdam: Rodopi, pp. 39-45. Savicki, Victor, (2008), Developing Intercultural Competence and Transformation: Theory, Research, and Application in International Business. Sterling, VA: Stylus Publishing, pp. 81-86. Brislin, Richard, and Tomoko Yoshida, (2000), Improving Intercultural Interactions: Modules for Cross-Cultural Training Programs. London: Thousand Oaks, pp. 114-116. Bartlett, C. A. (1999). Building and managing the transnational: The new organizational challenge, pp. 56-60. M. E. Porter (2001), Competition in global industries Boston: Harvard Business School Press, pp. 367-404. Bhawuk D. P. S. and Brislin R. W., (2000), Cross-cultural training: A review Applied Psychology: An International Review vol. 49, pp. 162-191. Caligiuri P. M. and Cascio W. F., (2000), Sending women on global assignments WorldatWork Journal vol. 9 no. (2) pp. 34-40 Kraimer M. L. , Wayne S. J., and Jaworski R. A., (2001), Sources of support and expatriate performance: The mediating role of expatriate adjustment Personnel Psychology vol. 54 pp. 71-99. Reynolds, C. (2002). Compensating globally-mobile employees, Scottsdale, AZ: American Compensation Association, pp. 136-151. Shaffer M. A. , Harrison D. A. , Gilley K. M. , and Luk D. M., (2001), Struggling for balance amid turbulence on international assignments: Work-family conflict, support, and commitment Journal of Management vol. 27 pp. 99-121. Sheridan W. R. and Hansen P. T., (2000), Linking international business and expatriate compensation strategies ACA Journal vol. 5 no. (1) pp. 66-79 Spreitzer G. M. , McCall M. W. Jr. , and Mahoney J. D., (1997), Early identification of international executive potential Journal of Applied Psychology vol. 82 pp. 6-29 Read More