Evaluating an International HRM Strategy - Assignment Example

?Executive Summary ZARA is one of the leading retailers in fast fashion and has set the standards for competitors to follow. This is largely due to the company’s highly competent global HRM owing to its unique reward structures and attitude towards treating employees as valuable assets. This paper assesses not only the human resource management of ZARA per se but its HRM in relation to expatriate management if it were to enter into joint venture agreement in New Zealand (the host country). To this end, the paper begins with an analysis of the economic environment in New Zealand and its potential relationship with ZARA’s HRM policies. Keeping in view the ageing population pyramid and low female participation rates in New Zealand, hiring expatriates would be necessary as the joint venture team would be a mix of expatriates and host country employees. During this process, cultural training and supporting policies would be necessary to reduce failure rates of expatriate management. Finally, recommendations are offered towards the end regarding the areas that ZARA would need to focus on with respect to strategic human resource management in New Zealand. Contents Contents 1 1.Introduction 2 2.HRM and the Environment 2 3.Recruitment and Selection 3 4.HRM Strategy 7 5.Training and Development 8 6.HRM and Organizational Performance 9 7.Organizational, cultural and national issues in HRM strategy 11 9.Conclusion 14 References 16 1. Introduction ZARA, an iconic global fashion brand, was founded by a businessman Amancio Orgega in 1975 owing to his aim of expanding his factory’s operations by opening a new outlet in La Coruna (don Quijote, 2013). The company has enjoyed great success since its inception with continuous growth in the fashion line being the epitome of ZARA’s overall business strategy. By 1986, the company enjoyed extensive distribution in Spain with outlets in all major cities, whereas two years later, the company decided to open its doors to the global market including its first destination- Portugal (don Quijote, 2013). After the success of this store, ZARA opened up in New York followed by Paris (don Quijote, 2013). Being a part of the Inditex portfolio of brands, ZARA enjoys tremendous presence in all major continents as well as high growth despite the economic downturn. 2. HRM and the Environment ZARA is considering entering into a joint venture in New Zealand which, currently, represents an untapped market for the company. It is, therefore, important to analyze the economic environment of New Zealand at present. The country’s economy now follows the free market mechanism with little government intervention. Its economy is highly export-driven and very competitive. Keeping this in mind, ZARA’s entry into the region could expose it to intense competition from other foreign firms. With an expected growth rate of 2.5% and 3.4%, the country demonstrates high resilience to the global economic downturn that negatively affected the economies of most of the developed world (IHS Global Insight, 2013). On the flipside, New Zealand’s currency appears undervalued compared to the dollar (IHS Global Insight, 2013). This combined with the potential for the housing market in New Zealand to heat up puts it at the risk of facing recessionary effect in near future. Furthermore, the low levels of inflation along with high unemployment levels (50%) (IHS Global Insight, 2013) could mean that the cost of hiring locals for ZARA would be low. Consumer spending is also expected to grow modestly which does not present an overly optimistic picture for ZARA. This is because of the high housing debts compared to slow growth in income. Additionally, government’s intention of reverting to modest surplus in 2015 shall result in reduced spending (IHS Global Insight, 2013). Nevertheless, there appears to be growth in consumer spending with the same increasing by approximately 1.2% by 2015 (IHS Global Insight, 2013). On the whole, the consumption picture appears to be mixed and one may expect fair amount of consumer spending. It is, therefore, critical to analyze the economic drivers of New Zealand’s economy. One of these is the labour market. The unemployment rate has increased owing to falling levels of labour force participation. Although demand for labour is high, economic uncertainty is likely to reduce hiring as well as wage rates. Another economic driver linked to this is that of the population composition. New Zealand presents a case of ageing population meaning that the number of people falling in the working age cohort will shrink (IHS Global Insight, 2013). This can present problems for companies such as ZARA that wish to hire young locals for their operations. It also represents a segmentation challenge for a company such as ZARA which will have to consider the ageing demographics of the region before setting up here. As far as inflation is concerned, the region will experience modest growth in inflation (at approximately 1.5%) with the New Zealand dollar depreciating sharply. Furthermore, the expansionary monetary policy by 2014 shall facilitate the expansion of private capital expenditure as well as produce positive sentiments regarding investments in the business community (IHS Global Insight, 2013). On the contrary, natural catastrophes such as earthquakes could stall the economy and result in negative sentiments in the business community, thereby delaying any investment plans. Overall, the consumption outlook remains mixed with modest growth depicted. Low inflation and low employment are likely to be conducive to businesses setting up operations in New Zealand as they would have the advantage of getting by with lower wages (in the middle of an unsaturated labour market) and dictate their own terms. On the flipside, the ageing population (and, therefore, reduced contribution to GDP) could have an impact as far as ZARA’s segmentation is concerned. 3. Recruitment and Selection The HR department of most organizations is responsible for the attraction, maintenance and retention of human resources. This is where the role of HR managers comes into play. According to Youssef (2012), the HRM of any company must go through the procedure of strategic planning whereby the internal and external environment of the organization is assessed. Furthermore, HR planning is one of the major roles of the HR department in most organizations (Youssef, 2012). Therefore, one of the major tasks of HR is to develop human assets that are valuable, rare and inimitable (Youssef, 2012). ZARA has gone to the extent of creating an international online portal for hiring employees (ZARA, 2010). This is because of the changing fads and volatility in the fashion markets. Since customer trends are changing constantly as far as fashion is concerned, the company is constantly expanding its operations and opening new stores as per its extensive growth strategy. Owing to this, there is always a need for new employees with over 200 different types of positions for employment (ZARA, 2010). ZARA has developed what are known as ‘creative teams’ as far as its recruitment process is concerned (Pearson, n.d.). These teams (as opposed to a team of designers) include product development staff, sourcing staff as well as designers. The idea is to create styles based on previous success stories. Once the company decides upon the location of its stores, it engages in the process of recruitment and selection. For this purpose, Spanish managers were directed to international locations to replicate the hiring procedure of Spain in those countries (Fabrega, 2004). However, owing to subsequent problems in France and Mexico, the company had to change it strategy and rely on hiring the locals to get a better understanding of customer preferences in those markets (Martinez, 1997). The company also hires a high proportion of young individuals and women. Therefore, the approximate average age of its employees is 26 with over 78% of the workforce being women (Ghemawat & Nueno, 2006). This could present problems in New Zealand which is suffering from an ageing population and where the female participation rate is low. Next, it is important to analyze whether ZARA relies on external or internal recruitment or both. External recruitment refers to the process of hiring individuals from outside the company by advertising through company’s website, recruitment agencies, conducting recruitment drives in universities as well as placing ads in the newspaper. Internal recruitment, on the other hand, refers to the process whereby the company fills a vacancy by promoting its existing employees thereafter providing the necessary training and development to the individuals. It seems that ZARA heavily relies on internal recruitment as a way of filling its vacancies. This HR strategy is line with its business strategy of increasing employee commitment and employee motivation. According to research, approximately 44% of employees that are newly hired receive promotion (Soloaga & Monjo, 2010). Additionally, over three-fourths of store managers are those who have served as salespersons with the company in the past (Soloaga & Monjo, 2010). As mentioned earlier, ZARA uses its own website as well as partners (recruitment agencies) such as monster.com and indeed.com to place job advertisements. The “Send CV” option of the company website asks the applicant to register an account with the company first. Thereafter, the applicant is required to select his/her working area which includes areas such as fashion design, logistics and stores. Depending on the applicants’ choice, the working regions are then offered. For instance, fashion designers are only hired in the company’s place of origin; that is, Spain. Next, the candidate is directed to the application form which is fairly simple and requires the candidate to fill in his/her personal details, professional experience, academic qualifications, language abilities as well as computer skills. A critical point to note here is that a special question related to the candidate’s prior experience of working with Inditex has been put reflecting the high importance attached to the same. When analyzing selection process, it is useful to consider the Five-Fold Grading System by Fraser which includes the “impact on other”, “qualifications”, “innate abilities”, “motivation” and “adjustment” as the competencies required on the person specification (Weightman, 2004). Impact on others includes the candidate’s verbal and non-verbal communication as well as physical appearance (Weightman, 2004). The candidate’s communication skills or speech are a critical criterion for ZARA. The qualifications acquired refer to the candidates’ qualification and work experience (Weightman, 2004). This is evident in the work experience and qualifications section in the application form. Once the application form and CV are processed and the employee has been shortlisted, he/she is invited to the company’s office whereby the interview is conducted. However, the interview is not highly structured; in fact, it can be termed as a hybrid of assessment centre and an interview. During the interview, for instance, certain questions are asked regarding how the candidate would deal with customers. These include, giving customers feedback for how a particular outfit looks on them as well as dealing with returns. Since ZARA is a fashion label, it is assumed that the candidates are presentable particularly for in-store and fashion designer vacancies. Next, the innate abilities refer to how quickly the candidate comprehends information and is keen to learn (Weightman, 2004). This is evident in the fact that the applicants are seated in a large room during the interview/group discussion whereby they are asked about general information about ZARA. Next, a video on Inditex (ZARA’s parent company) is shown for approximately 20 minutes after which questions related to Inditex are asked. These judge the candidates’ keenness to learn about the company and its products. Following that, the candidates are told to appear for the group interview. As the name suggests, the ‘group’ interview involves candidates sitting in a circular setting with the candidates asked to introduce themselves to others. This is followed by a team exercise whereby the candidates are arranged into teams and asked to design couture for an event. During this process, great emphasis is given to the candidates’ knowledge about fashion trends including the affect of seasons on these trends. This exercise judges both the “motivation” and “adjustment” points of Fraser’s system. Motivation refers to the types of goals set by the candidates (aiming for unusual and ‘different’ attire rather than merely replicating what they’ve seen) as well as determination and success at achieving them (Weightman, 2004). Adjustment refers to candidates’ ability to handle pressure and get along with others (Weightman, 2004). The team exercise specially judges this as people in the team may have different ideas and developing consensus (rather than arguing) while achieving the task assigned is only possible with candidates who rank high on the adjustment factor. It is also important to note that the selection process relies heavily on behavioural and attitudinal traits of the candidate which are assessed primarily through situational interviews and mini assessment centres rather than written responses to questions. Although assessment centres may cost companies time and resources, it allows the company to use multiple selection techniques rather than assessing the candidate through a narrow range of techniques. Therefore, it is common to find role plays and simulations being used to decide whether or not the candidate achieves a strategic fit with the job. Investment at this stage also lowers the probability of higher costs later on if the wrong candidate is selected or if he/she does not perform as required. This is because performance of the candidates on assessment centres has been demonstrated as being related with one’s performance on the job (Gaugler et al., 1987). Furthermore, the nature of the work is such that it requires high level of creativity and, therefore, unstructured responses. 4. HRM Strategy The model of soft HRM laid by theorists has striking similarity with the “best practice” theory of HRM. The Best Practice view is based on rewarding and value performance of employees. Pfeffer further delineated on selective hiring, decentralization, autonomous teams, high rewards, training and reduced barriers related to information sharing with employees as being the best practices (Pfeffer, 1998). Furthermore, it has been concluded that, despite criticism, the link between HRM and organizational performance is worthy of consideration. ZARA combines both these views by extensive training (including cross-cultural transfers) that provides employees a platform to increase their say in the company’s decisions. As far as ZARA is concerned, it meets the four major goals of HRM including employee commitment, flexibility, quality and strategic integration (Iles et al., 1996). Strategic integration is achieved by ZARA as it has aligned its business strategy of delivering new designs much faster than competitors by empowering store managers to provide real-time data on fashion trends. Commitment refers to the extent to which employees become involved in the work they do and can relate to the organization (Iles et al., 1996). ZARA enhances employee commitment by increasing their say in the company’s decisions which is evident by the fact that even store managers are empowered to provide feedback regarding fashion trends to the design team. Furthermore, flexibility is enhanced by HR both in terms of the organizational structure and nature of jobs. Since the nature of the fashion industry is such that work is less structured and requires more creative thought than fixed steps or tasks, the jobs at ZARA are more or less flexible by nature. Also, there is little rigidity with respect to individuals’ job roles as they are encouraged to participate in the organization beyond their traditional job roles. Finally, quality is ensured both in terms of employees’ treatment and the tasks carried out. ZARA’s commitment to quality is reflected in the fact that it has a failure rate of 1% as opposed to the industry average of 10% (Ghemawat & Nueno, 2006); thereby making it a role model for fashion industry retailers as far as quality management is concerned. ZARA also goes at length to retain its staff through a well crafted rewards program. Store managers, for instance, are entitled to a fixed salary plus variable pay which reflects their performance at store. The variable pay comprises 50% of the total pay which means that the compensation structure is very “incentive intensive” (Ghemawat & Nueno, 2006). This acts as sufficient motivation for store managers to achieve high sales targets. However, this does not end here. Since approximately 75% of salespersons are promoted as store managers (Ghemawat & Nueno, 2006), salespersons also have strong incentives to work hard and achieve their targets. One can, therefore, infer that the corporate culture of ZARA is flexible albeit competitive which necessitates professionalism and meeting targets to climb the corporate ladder. 5. Training and Development This part of the paper refers to the training and development procedures undertaken by ZARA. As mentioned earlier, the company carefully inducts its employees with preference given to internal employees. This increases the need for training as the former employee may have worked in a different area at ZARA and, therefore, may have to develop the necessary skills for the new job. Additionally, in order to adapt to trends in the local market, ZARA needs to incorporate the local management culture in its international operations where the role of training comes into play. The company’s initial experiment of sending Spanish executives to different countries where ZARA opened its outlets was a disaster. In one instance, the company discovered how the French adopted a formal communication style as opposed to informal relationships that dominated the Spanish way of working (Fabrega, 2004). Literature suggests how development of core competencies involves a dynamic process which involves not only capturing existing resources but developing new ones. One way of developing the potential of young managers it to grant them positions in foreign regions as well as transferring expatriates to foreign operations of the company. Training in the case of ZARA, therefore, is not a one-time event but an on-going process whereby the experts in the design department keep travelling and communicating with the managers of local subsidiaries on a frequent basis. Frequent interaction amongst employees of various subsidiaries also reduces the “cultural gap” that exists between the company’s main operations in Spain and its subsidiaries. It is, therefore, important to understand the actual training process of ZARA when it hires new employees. As far as the store operations are concerned, hiring is the responsibility of the store manager. Training usually takes place on-the-job and is undertaken by the section manager (Ghemawat & Nueno, 2006). The new hire is trained for 15 days after which his/her suitability for the post is determined (Ghemawat & Nueno, 2006). This requires personnel assessment which, again, is conducted by the store in charge. Furthermore, as per ZARA’s policy of internal promotion and recruitment, over 90% of the store managers are promoted (Ghemawat & Nueno, 2006). This required training the manager for the new position. As part of this procedure, the store along with the HR department develops a training program for the manager. This training is comprehensive in nature as it includes training at both, the corporate headquarters, as well as other stores. This is known as off-site training and it inculcates not only job-specific skills but the need to socialize and develop a strong social network in the organization. This is followed by training to supplement periodic needs of the organization. As far as the designers in the creative team are concerned, ZARA offers them training to ensure that the number of times the designs are reviewed or altered is minimised along with the need to expedite the design process and reducing the amount of samples to be produced. Such training has produced measurably positive results for ZARA as the company’s failure rate stands at 1% which is 10% of the industry average (Ghemawat & Nueno, 2006). As part of the company’s business strategy to promote fresh and young approach in the design of its products and generation of ideas, the company makes sure that young talent is hired and is trained to make speedy decisions. This is particularly because of the ‘fast fashion’ industry in which ZARA operates which makes it necessary to launch the newest designs before competitors or before they go out of fashion. 6. HRM and Organizational Performance Various theories have pointed to the direct relationship between employee involvement and participation whereby authority is shared with employees for decision making purposes. Employee involvement has further been defined as a collaborative attempt to increase participation of personnel in setting organizational goals, solving problems, planning tasks and taking decisions more than their current positions would allow (Rasmussen, 2009). This effort must not be random; in fact, it is a conscious attempt to give meaningful and continued tasks for the purpose of making employees involved in the work. Four main theories have been developed with respect to employee participation. The Democracy theory highlights how organizational environment is similar to political arena which requires activating and unleashing the capabilities of employees (Rasmussen, 2009). The socialist theory refers to workers’ control of the manufacturing process (Rasmussen, 2009). The Human growth & development theory highlights the role of participation in increasing employee morale and commitment (Rasmussen, 2009). Finally, productivity and efficiency theory states that participation increases the chances that decisions will be accepted as quality of decisions is raised (Rasmussen, 2009). ZARA ensures employee participation in various ways. Firstly, the company uses “quality circles” or project teams whereby responsibility and authority is delegated to employees. Secondly, there are frequent meetings (both within the office) and across regional offices whereby employees are encouraged to share new ideas. Furthermore, the company is open to suggestions whereby they receive rewards for making suitable suggestions. Perhaps, one of the most important features of ZARA’s strategy towards increasing employee participation is that of its team-based design strategy. Under this approach, the company puts together its team of commercial managers and designers who meet regularly within their respective functional roles to determine the fabric, cost, pricing and overall look of the apparel. Even the store managers have a direct voice in the designs of the company’s apparel (Ghemawat & Nueno, 2006). This is because the store managers are empowered to provide real-time information pertaining to customers to the company’s headquarters using a highly effective IT system in-house. Furthermore, store managers are empowered to use PDAs through which they communicate the latest trends to the design team (Ferdows, Lewis, & Machuca, 2005). These managers exchange data related to trends in sales as well as the hype or buzz that is produced by new styles at ZARA (Ferdows, Lewis, & Machuca, 2005). Unlike its competitors, ZARA’s relatively flat hierarchy reduces the threat of communication being hampered by bureaucratic barriers. Additionally, store personnel are treated by top management as mini entrepreneurs as these personnel have clear targets for costs, sales and profits along with requirements for sales reporting. The flat organizational hierarchy at ZARA along with decentralization makes way for greater employee involvement and participation as stores’ sales are monitored closely by the managerial level. 7. Organizational, cultural and national issues in HRM strategy National The strategic role of HRM in international corporations is best explained in terms of the alignment of people, culture and incentives/controls. The staffing policy of such companies involves selecting employees who not only fulfil the job requirements but also fit with corporate culture (Hill, 2010). The polycentric approach, which is one approach towards staffing policy, refers to the recruitment of nationals from the host country for the management of local subsidiaries and nationals of parent country for management of headquarters (Hill, 2010). As mentioned earlier, the fashion industry is dominated with the need to adapt to local tastes and trends as opposed to merely implementing standardised designs across the globe. The need for a highly localized strategy, therefore, encourages ZARA to use the polycentric approach. Such a strategy is also necessary to reduce “cultural myopia” or ensure greater fit between the workers and local culture (Hill, 2010). ZARA’s initial experiment of sending Spanish executives to different countries where ZARA opened its outlets was a disaster. In one instance, the company discovered how the French adopted a formal communication style as opposed to informal relationships that dominated the Spanish way of working. Thereafter, the company adopted polycentric approach to staffing. This is evident in the fact that only “Spanish” designers are recruited in its in-house design team in Spain whereas the store positions across the globe are filled by the respective locals. This approach, however, has the downside of broadening the gap between managers of parent country and those of the host country (Hill, 2010). This is reduced to some extent by ZARA whereby regular meetings across the company’s various regional offices ensure that the communication gap across the globe is reduced. Organizational MNCs often face failure when expatriates return prematurely or poor repatriation. Poor management of expatriates can negatively affect organizational performance. Failure to selection, retain and develop expatriates that are competent can result in failed assignments costing companies large sums of money (Ivancevich, 2008). To this end, cross-cultural training is necessary with the duration of training depending on the length of stay of expatriates in the host country. At the highest level, the parent company is responsible to provide assessment centre, simulations, sensitivity training and simulations to expatriates (Chew, 2004). This goes beyond language training and cultural assimilator training. Furthermore, the parent company is expected to plan in advance for expatriates’ accommodation, school registration of employees’ children (if applicable), allowance and shipment of one’s personal goods from parent country to host country (Chew, 2004).. It is further assumed that expatriates will receive higher compensation in their host country. Although ZARA at present does not engage in the practice of sending expatriates for its international operations, the company must consider training expatriates not just in the parent country but also in the host country. Local support groups and development of language skills is extremely important at this stage (Chew, 2004). ZARA must also focus on providing additional financial as well as non-financial support (such as child care, employment of spouse, club memberships and relaxation leaves) to these expatriates. Cultural Hofstede’s model of cultural dimensions aptly explains countries based on their cultural traits on the basis of common dimensions including power distance, uncertainty avoidance, individualism, masculinity and long term orientation. The parent country, in this case is Spain which ranks high on power distance, moderate on individualism, low on masculinity, high on uncertainty avoidance and low on long term orientation (Geert Hofstede, n.d.). In other words, Spain is characterised by a culture that discourages negative feedback and acknowledges power as being vested in one’s position. Compared with its non-European counterparts, Spain is considered as individualist although team work is encouraged (Geert Hofstede, n.d.). Considering the feminine culture, Spanish are motivated by intrinsic nature of work, consultative management and consensus rather than by setting high goals at the expense of others’ welfare. Uncertainty avoidance is high; therefore, one may expect job security to rank high on employees’ list (Geert Hofstede, n.d.). Finally, Spanish believe in quick fixes with little scope for delays (Geert Hofstede, n.d.). This seems to be, in many ways, the opposite of the culture prevailing in New Zealand. As opposed to the high power distance of Spain, New Zealand ranks low in the same (Hofstede, n.d.). This means that information sharing and bottom-up communication is encouraged with informal and direct communication. This means that ZARA would have to ensure increased employee participation and reduce the bureaucratic barriers underlying communication between managers and non-managers. As far as individualism is concerned, New Zealand ranks high on this dimension whereby initiative and self-reliance are valued (Hofstede, n.d.). This is not so different from the culture of ZARA’s parent country. However, the rewards system would require alteration as rewards of the locally recruited individuals must be tied largely to individual performance rather than group performance. Once again we see a strong contrast between the two cultures as far as the masculinity dimension is concerned. As opposed to Spain, New Zealand is highly masculine where success, achievements and promotions are considered important aspects of life (Hofstede, n.d.). This is in line with the large number of promotions granted by ZARA to its employees. However, since design teams are an important aspect of ZARA’s operations, care must be taken to ensure conflict management procedures are in place especially since New Zealanders believe in having an individual, win-win approach to conflict resolution. Finally, New Zealanders rank moderate on uncertainty avoidance (Hofstede, n.d.). This would go in favour of ZARA as New Zealanders have high degree of acceptance towards innovative ideas and have the urge to try something new. Considering that the fashion industry involves coming up with something unique and cutting –edge, this increases the rate of acceptance of new technologies and business practices. Finally, both Spain and New Zealand share short-term orientation meaning that both aim for quick results. 8. Recommendations Keeping in view the above, it is recommended that management at ZARA adopts a blend between democratic and laissez-faire leadership style when dealing with employees. This means that employees’ suggestions are heard and employee participation is encouraged. The soft HRM theory further supports this management style as this theory proposes organizations to focus on their strategic objectives and treat workers as valued assets. According to this view, employees’ input deserves trust and can contribute positively to productivity for the achievement of common business goals. Considering that ZARA has positioned itself as a fast-fashion retailer and faces cut-throat competition in the field, it must unleash and utilise the creativity of its employees to the maximum to achieve a strategic edge. The people-oriented and personalized nature of “fashion” means that employees have a lot to contribute. On the other hand, managing HR of international subsidiaries is a challenging task as far as global strategic HRM of ZARA is concerned. Furthermore, significant cultural differences between New Zealand (the host country) and Spain (the parent country) necessitate the need for employing a high proportion of expatriates to manage the joint venture in New Zealand. This is especially because of the cultural differences between the countries owing to power distance and masculinity dimensions. This can affect work ethics and, consequently, the way of working. However, managing expatriates is not easy because of the cultural shock, lack of training and family issues. To this end, it is highly recommended that ZARA maintains cultural sensitivity as a major criterion for selection of expatriates and that previous international experience must be considered a mandatory requirement for hiring of such expatriates. As mentioned earlier, an impression approach should be adopted in cultural training of such employees considering that the expatriate employees will be part of the joint venture team (for a longer term). Additionally, ZARA must ensure that the local (New Zealander) managers must be prepared to train the incoming expatriates. 9. Conclusion After analyzing strategic and global HRM at ZARA it is evident that the company has adopted a soft HRM policy with significant degree to localization and decentralization. The highly flexible corporate structure along with a flatter hierarchy gives way to significant bottom-up communication whereby innovative ideas from employees are encouraged and even rewarded. Furthermore, the current compensation structure is competitive and encourages competition as 50% of the compensation for store managers is performance based. This, combined with the power delegated to store managers to update the design team regarding current customer buzz and trends makes store managers feel as mini entrepreneurs which can be highly motivating for them. Moreover, the high rate of internal promotion also makes way for higher motivational level of employees. Nevertheless, the company must come to terms with the diverging culture between Spain (the parent country) and New Zealand (the host country) which means engaging in cross-cultural training and selective hiring of expatriates. Additionally, the low female participation rates could mean lack of locally available female staff in New Zealand which may necessitate bringing in expatriates. Considering the low employment levels and inflation in New Zealand, however, it is strongly recommended that the company goes ahead with the joint venture agreement in New Zealand. References Chew, J., 2004. Managing MNC Expatriates through Crises: A Challenge for International Human Resource Management, Research and Practice. Human Resource Management, 12(2), pp.1-30. don Quijote, 2013. Zara: The Largest Spanish Clothes Company. [Web] Available at: HYPERLINK "http://www.donquijote.org/culture/spain/fashion/zara.asp" http://www.donquijote.org/culture/spain/fashion/zara.asp [Accessed 17 September 2013]. Fabrega, F., 2004. Zara. El modelo de negocio de Inditex. Madrid: Claves de gestion. Ferdows, K., Lewis, M.A. & Machuca, J.A.D., 2005. Zara's Secret for Fast Fashion. [Online] Available at: HYPERLINK "http://hbswk.hbs.edu/archive/4652.html" http://hbswk.hbs.edu/archive/4652.html . Gaugler, B.B. et al., 1987. Meta-analysis of assessment center validity. Journal of Applied Psychology, pp.493-511. Geert Hofstede, n.d. Spain. [Web] Available at: HYPERLINK "http://geert-hofstede.com/spain.html" http://geert-hofstede.com/spain.html [Accessed 18 September 2013]. Ghemawat, P. & Nueno, J.L., 2006. ZARA: Fast Fashion. Harvard Business Review, pp.1-35. Hill, C.W.L., 2010. International Business. New York: Mc Graw-Hill. Hofstede, G., n.d. New Zealand. [Web] Available at: HYPERLINK "http://geert-hofstede.com/new-zealand.html" http://geert-hofstede.com/new-zealand.html [Accessed 18 September 2013]. IHS Global Insight, 2013. Country Intelligence Report: New Zealand. Country Intelligence Report. Colarado: IHS Global Insight IHS Global Insight. Iles, P., Forster, A. & Tinline, G., 1996. The changing relationships between work commitment, personal flexibility and employability: An evaluation of a field experiment in executive development. Journal of Managerial Psychology, 11(8), pp.18-34. Ivancevich, 2008. Human Resource Management. New York: Mc Graw-Hill. Martinez, M.A., 1997. Jose Maria Castellano. Economistas, 73, pp.118-126. Pearson, A.M., n.d. The Story of Zara – the Speeding Bullet. Report. Northamptonshire : Unique Business Strategies The Strategist’s Choice. Pfeffer, J., 1998. The human equation: Building profits by putting people first. Boston: Harvard Business School Press. Rasmussen, E., 2009. Employment Relations in New Zealand. 2nd ed. New Zealand: Prentice Hall. Soloaga, P.D. & Monjo, M., 2010. ZARA CASE STUDY: THE COMPANY WHERE EVETHING COMMUNICATES. HARVARD DEUSTO MARKETING YVENTAS, 101, pp.60-68. Weightman, J., 2004. Finding and Selecting People. In Managing People. 2nd ed. London: CIPD. pp.103-14. Youssef, C., 2012. Human resource management. California: Bridgepoint Education. ZARA, 2010. WORK WITH US. [Online] Available at: HYPERLINK "http://www.zara.com/us/en/company/work-with-us-c18003.html" http://www.zara.com/us/en/company/work-with-us-c18003.html [Accessed 12 September 2013]. Read More