Wal-Mart China - International Human Resource Management - Assignment Example

Wal-Mart China: International Human Resource Managment Executive summary The study purpose is to evaluate and understand the international human resource management policy and its interaction with the local factors. For this purpose, Wal-Mart china has been selected. The subsequent research highlights that Wal-Mart China uses diverse hiring policy in which different factors are considered. In addition, Wal-Mart China has gender diversity policy in which participation of all segments of Chinese society has been ensured. However, there are certain recommendations that must be followed by the company. The company should offer attractive incentives and rewards for the purpose of retaining employees and avoiding employee turnover. At the same time, the company should introduce active employee participation policy. Introduction Key economic indicators The Chinese food and beverage market has become the largest market in the world (Asia Perspective, 2014). Asia Perspective (2014) maintains that the current status of the Chinese food and beverage market is contributed by the fact that the Chinese economy has experienced a phenomenal growth in the recent years and has been able to maintain the growth trend over these years; and it is the fruit of this sustainable economic growth that has enabled its food and beverages market to obtain and retain the current status; consequently, it has attracted many local and international firms to invest in its growing food and beverage market. Table 1: China’s Top Ten Grocery Retailers in 2010 Source: (IDG retail Analytics, 2011 as quoted in New Zealand Trade and Enterprise, 2012) This graph clearly demonstrates the market potential of Chinese grocery market. The table highlights that the current grocery market are mainly shared by both local and international investors in which lead or majority of the market share is owned by Wal-Mart China as reflected by the table 01. At the same time, some local companies are also competing in the market. Due to this collective investment of both local and international investors, the Chinese grocery market has become balanced as it enables the consumers to experience the benefit of healthy competition in which they will be able to buy products at very competitive prices. In addition, China has a very strong and stable consumer purchasing power and this trend has experienced a sustainable growth and stability over these years. For example, consumers aged 25 to 39 remain the highest earners and they continue to increase as the Chinese market has stable job market for the current and potential graduates (Global Analysis Report, 2014). Future Challenges Fierce competition is unavoidable in the Chinese grocery market. the current trend highlights that many local and international firms actively pursuing their business objectives in which the intend to increase their investment in the different segments of retail industry. Through this trend, it is highly likely that new wave of fierce competition will occur in which it will be very challenging for the current and potential investors to retain and sustain the profitability level because in such kind of situations the competitors use different and unique methods for attracting and retaining the customers. As a result, the consumers will have better chances to experience quality services and products from the retailers but the competing firms are more likely to feel pressure on the profitability and the chances of sudden breakeven point cannot be ruled out. E-Commerce The use and benefit of technology cannot be ignored or undermined. In the recent years, many firms use the concept of electronic commerce in which they try to reach consumers available at different forums, such as social websites, or try different methods, such as emails and other digital marketing methods for reaching the untapped digital market. for this purpose, the Chinese grocery market is growing and has a strong potential for the current and future investors to use electronic commerce for reaching the maximum number of consumers. PESTLE Analysis PESTLE stands for political, economic, social, technological, legal and environmental (Basu and Wright, 2008). It is used as a tool to evaluate and to understand the external environment of an entity and through this understanding it will be considerably easier for the entity to assess its current position with regard to the external factors. By knowing this kind of position, the entity will be in a better position to make more effective and relevant strategic and operational decisions for improving the corporate performance. Politically, China has been stable and peaceful as well. Over the period of last many years, the political system of China has not experienced any increase of political instability or mayhem due to the various factors. First, the primary focus of all political government has been on the economic growth and development of country and because of this reason they have been able to avoid any major political standoff or any harsh political rivalry. As a result, Wal-Mart China and other firms operating in the grocery market have not experienced any major political or policy issue that create problem for the investors. Economically, the Chinese market has been ideal for the local and international investors. Strong purchasing power of consumers and inexpensive labour cost are two fundamental economic indicators which are attracting the current investors to invest more and to the foreign and new investors to avail this opportunity. For example, in many developed countries, including the United States of America and the United Kingdom, the cost of doing business is considerably higher and growing as well. Simultaneously, the consumer purchasing power has remained less ideal for the investors. Under such situation, the Chinese market has both potential and attraction for the current and future investors for investing in the retail and grocery sector as Wal-Mart China and other firms are actively involved for expanding their network of business operations throughout China. Socially, the Chinese culture and traditions have been very ideal for the companies like Wal-Mart China and others. The Chinese are highly hard worker, sincere, committed and dedicated nation as this reflection is also proven by the fact that its economy has maintained double digit growth for many years and this achievement would have not been possible without the contribution of hard work of the Chinese people. In other words, the current and potential investors will have more reliable workforce and this reliability will enable them to translate their business objectives into visible financial and operational performance. Technologically, China has also improved its basic information technology infrastructure. In this regard, it is important to mention that many companies, including Wal-Mart China, have launched their virtual services in which they buy and sell their products and services using the platform of the Internet. At the same time, many technology firms, such as google, apple, and so on, have commenced their business operations in the recent years due to the strong potential in the Chinese market. Legally, the Chinese business environment has not experienced uncontrolled flow of legal proceedings and cases as well. Currently, strong legal and judicial system has considerably enabled the business environment to flourish throughout these years. It is the presence and strong adherence to the local business laws that has enabled firms to experience the smooth and justified proceedings of the cases. Environmentally, the Chinese ecological environment has been under severe criticism from the international environmental organizations. Due to the rapid urbanization and massive industrialization, many Chinese cities experience an unexpected level rise in the pollution and other unhealthy gases, which are posing severe health threat to the citizens. In this regard, it is important to mention that this is a dilemma when a country undergoes a massive process of economic growth and development in which at the one side, strong employment market, purchasing power, increasing middle class, and on the other side, the environmental pollution causes more hazards and threatens overall health index of the country. Company profile Wal-Mart China has developed and has planned to achieve the following aims and objectives: regain price leadership, grow with a focus on business fundamentals, simplify the business, investment in supply chain and technology and develop energized associates (Wal-Mart Long term strategy, 2012). In the first strategic objective, Wal-Mart China has planned to improve productivity besides diminishing operations costs and consequently reducing prices for attracting new customers and retaining the existing customers (Wal-Mart Long Term Strategy, 2012). The second business objective is to increase store performance and ensuring compliance with the related regulatory framework and providing quality products to the customers (Wal-Mart Long Term Strategy, 2012). Similarly, the third objective is about consolidation in which merchandising offices throughout China will be consolidated and the fourth objective is also about investing in the supply chain and using technology for improving on time delivery to and from distribution centres (Wal-Mart Long Term Strategy, 2012). Also, the final strategic aim is mainly directed towards the employees working in different offices in China and this aim is devised to entertain the objective of retaining and sustaining corporate culture along with talent retention and development for providing more durable economic growth to retail industry and to the Chinese economy as well (Wal-Mart Long Term Strategy, 2012). Based on these strategic aims and objectives, it can be deduced that the company has tried to focus more on the business aspect rather than human resource management aspect as four out of five strategic objectives directly and indirectly address to the business related activities and one aim (i.e. develop energized associates) is only relevant to the human resource management. However, certain relevance between business objectives and human resource management objectives can be found. For example, the business objective “grow with a focus on business fundamentals” cannot be achieved without properly developing energized associates as the store staff and their behaviour towards the customers has considerable effect on the overall store performance. At the same time, it can also be highlighted that the Recruitment Process Wal-Mart China uses a particular recruitment process for hiring new workforce. For example, on its official website, the company has maintained that the intended job seekers are encouraged to apply through the provided email addresses and simultaneously they insist that the applicants are not required to send their paper based applications instead they want the applicants to use electronic mail for using as a medium of communication between applicant and the related hiring authority (Store/Club Vacancies, 2014). In addition to that, before carrying out the process of recruitment, Wal-Mart China has provided certain values that they want the current and potential employees should understand them and apply them while providing serving in the firm; they consist of ‘respect for the individual’, service to the customer’, ‘strive for excellence’, and ‘our people make the difference’ (Careers, 2014). In this regard, it is important to mention that the company adopts different range of recruitment practices for hiring different managers, store and customer support services staff members. Each has its unique method and recruitment strategy which is followed by the human resource management department of Wal-Mart. For example, for the position of “Store Asset Protection Manager”, the job description requires that the potential candidate should have strong expertise in the field of risk management planning and implementation relating to the safety and security of associates, visitors and customers; at the same time, it is also expected that the store asset protection manager is required to maintain and retain food safety standards and along with implementing them besides promoting and safeguarding the firm integrity policy and investigating the cases relating to the dishonest employees; for this employment, academic and technical perquisites are : associate degree or above, basic computer related skills, team work and judgemental (Store/Club Vacancies, 2014). In other words, the company does not follow any specific recruitment process but has adopted various methods for carrying out the process of recruitment. In this regard, it is important to mention that it looks considerably challenging for the company to adopt any single recruitment process because each employment vacancy has different prerequisites and job skills. as a result, it is highly relevant and useful for the company to use different recruitment process for hiring new workforce. However, the initial process, such as sending documents for initial screening, remains largely the same whether to hire a manager or customer support staff member. In the subsequent process, interviews, tests, group discussion and other methods are employed for assessing the suitability of the potential candidates. Selection methods Roger has developed and recommended the seven steps for the purpose of selection. These steps include: physical characteristics, general ability, attainment, training and experience, special attitudes, interests, disposition/personality and circumstances (Hayes, 2002 ; Stredwick,2013). Each step separately addresses the requirements particularly in the process of selection. For example, in the physical characteristics, vision, health, appearance, speech and bearing are some of the important factors that are considered and are taken into account (Hayes, 2002). In the second step, educational background, work experience, and extra-curricular activities and hobbies are considered (Hayes, 2002). In the third step, general ability using the psychometric tests, is assessed for evaluating the actual and potential skill and understanding of the candidate (Hayes, 2002). In the fourth step, mathematical, social skills, scientific skills and computer skills are also taken into account (Hayes, 2002). In the sixth step, personality and its different dimensions are measured for the assessing its relevance and workability with the prerequisites of employment skills and individual circumstances of the candidate are also assessed so that the job description and the performance of the candidate have any similarity or contradiction in the seventh step (Hayes, 2002). Wal-Mart China has different selection process for hiring store associates. Shukla (2012) maintains that Wal-Mart China uses several methods for hiring the store associates and one of the most common ways for attracting and hiring the store associates is word of mouth. In other words, the company only uses certain steps for hiring the store associates. For example, from the statement of Shukla, it can be deduced that Wal-Mart China only uses physical features, qualification for hiring the services of the store associates. Based on this selection process, it can be contended that Wal-Mart China completely ignores other steps of Roger’s seven step but only relies on the use of first step. However, in this regard, it is important to highlight that the company only uses the first step for hiring the store associates while it employs other steps for hiring more experienced and professional employees. Training Training is the most important aspect of employment. There are two types of training: on-the-job training and off-the-job training (Madaan, 2009). The former is provided while serving whereas the latter is offered out of the work station (Madaan, 2009). Both have different importance and relevance for the work related activities and services. Wal-Mart china has been offering a range of training and development sessions to the current employees. For example, The Economic Times (2012) highlights that Wal-Mart trains more than 60,000 women workers in China and India in which more than 8,000 women will receive leadership training for developing work life balance along with career development. In this regard, it has been mentioned that due to this training and development sessions, the Chinese youth has learned the way to live life and has gained a remarkable retail experience which has transformed the Chinese youth into the most productive labour in the retail industry (Ahlstrom and Bruton, 2010). Employee participation has been defined as a voice given to employees for making their own decision relating to their work (Griffin and Moorhead, 2014). However, employee participation is not a simple strategy and empowerment process but has become complex than ever before (Pendleton,). In other words, employee participation needs to have a clear and understandable format which enables both employee and employer to work in a way to achieve their respective job-related objectives. For this purpose, Wal-Mart China has introduced a range of programs enabling the current employees to attain and retain the required level of employee participation and empowerment as well. for example, in October 2012, Wal-Mart China developed and introduced the Retail Talent Development Fund in collaboration with the China Youth Development Foundation for empowering and supporting retail education at Bainian Vocational Schools throughout China in which retail training courses have been developed and designed by Wal-Mart and the International Youth Foundation (Social Responsibility, 2014). In other words, Wal-Mart China is incorporating the basic retail education in the future employees in which they are focusing on those schools and vocational training centres where the retail education and the related curriculum has become a part of traditional education system. through this system and support, Wal-Mart China is investing in the leadership program which is one of the long term strategic objectives of the company; in this regard, it is important to mention that this long term strategic objective is not only China specific but has also been pursued in other countries such as India, Bangladesh and others. National Reward system is mainly carried out to encourage employees to provide their best efforts for obtaining its job related activities. in this kind system, it is always expected that the employees are given incentives in the shape of extrinsic and intrinsic rewards. In which, some employees prefer cash, cars, bonus shares, while others prefer to appreciation, encouragement, recognition and other factors included in the intrinsic reward system. Hofstede five dimension model is consisted of: Identity, hierarchy, aggression and gender, otherness and truth and gratification of needs (Ito et al., 2010). In this model, the fundamental focus is on the basic values, such as individualism and collectivism. In this regard, it has been highlighted that the individual society looks after for oneself whereas the collective society does opposite to that approach (Onsrud, 2007). In addition, it has also been highlighted that the expectations pertaining to equality about gender and age are some other factors that are highlighted at the international level (Cullen and Parboteeah, 2013). Organizational issues Gender diversity is at the centre of the company. In this regard, it is important to mention that Wal-Mart China prefers to retain favourable gender diversity policy in which equitable and fair hiring of female staff has always been retained by the company (Shukla, 2012). In addition to that, Wal-Mart China has also employed physically-challenged employees and currently 1080 disabled associates are actively performing their duties in their respective regions (Shkula, 2012). Based on such diverse policy of Wal-Mart, it can be deduced that the company has clearly understood the basic national culture of China and its features particularly the inbuilt characteristics of the local people. Instead of having harsh and selective human resource policy, Wal-Mart China has clearly adhered to the basic human resource policy of Wal-Mart International. In addition, the Wal-Mart China is also attached preference to the concept of collectivism which has been found in the local Chinese culture. For example, due to their strong commitment to the general moral and ethical codes and standards which are commonly followed by many ordinary Chinese, Wal-Mart China has also implemented its human resource policy by keeping in view the basic standards of the local culture. Conclusion and recommendations Wal-Mart China has put in place a diverse human resource management policy. In which it does not follow one particular aspect for the purpose of selecting and hiring the staff but has adopted different human resource strategy for obtaining the objectives of human resource management. At the same time, the company has put in place strong gender diversity and fair employment policy in which it also employs physically-challenged persons as well. at the same time, it has also invested in the leadership and development programs in which it trains current and potential employees through providing them the retail training and development courses in the different vocational and training schools. This human resource strategy is pursued through using the support of the international and local schools. However, still certain recommendations are needed to be introduced for enabling the human resource policy to attain its stated objectives. Active employee participation policy The company should develop and implement active employee participation policy. The purpose of this policy should be that the employees should avail the required level of personal freedom while discharging their services. In this regard, it is important to highlight that the employees should be asked about their issues in the organization. For this purpose, survey should be conducted in which related questions should be asked and the provided feedback should be used for understanding the existing shortcomings in the employee participation policy. In this way, the employees will become more productive and the company will avail the benefit of additional services or input provided by the active employee participation policy. Sustainable hiring policy Currently, the Chinese market is actively growing and the retail industry is also increasing. In other words, the employees have more freedom to switch over to new offers of employment. In that case, the chances of higher employee turnover cannot be ruled out. As a result, in order to avoid such situation, it is highly recommended that Wal-Mart China should develop such hiring policy in which minimal employee turnover is ensured. For this purpose, the company should provide them the attractive incentives and rewards for retaining the employees. References Ahlstrom, D., & Bruton, G. (2010). International Management: Strategy and Culture in the Emerging World. Ohio: South-Western Cengage Asia Perspective, (2014). China’s Increasing Appetite for Imported Food and Beverage. Available: http://www.asiaperspective.net/chinas-increasing-appetite-imported-food-beverage/ Accessed: 11 September, 2014 Basu, R., & Wright, J.N. (2008). Total Supply Chain Management. Oxford: Butterworth-Heinemann. Careers, (2014). Wal-Mart: Join Us, Succeed Together! Available: http://www.wal-martchina.com/english/career/career.htm Accessed: 11 September, 2014 Cullen, J.B., & Parboteeah, K.P. (2013). Multinational Management: A Strategic Approach. Ohio: Cengage Learning. Ito, T., Zhang, M., Robu, V., Fatima, S., Matsuo, T., & Yamaki, H. (Eds.) (2010). Innovations in Agent-Based Complex Automated Negotiations. Chennai: Springer Hayes, J. 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Available: http://www.wal-martchina.com/english/career/othercity.htm Accessed: 11 September, 2014 Social Responsibility, (2014). Wal-Mart China: Social Responsibility. Available: http://corporate.walmart.com/our-story/our-business/international/walmart-china Accessed: 11 September, 2014 Stredwick, J. (2013). An Introduction to Human Resource Management. 3rd edn. New York: Routledge. The Economic Times, (2012). Wal-Mart training 60,000 women workers in India and China. Available: http://articles.economictimes.indiatimes.com/2012-04-06/news/31300149_1_programme-factories-life-skills. Accessed: 12 September, 2014 Wal-Mart Long Term Strategy, (2014). Wal-Mart China Announces Five Key Points of Long Term Strategy. Available: http://www.wal-martchina.com/english/news/2012/20121101.htm Accessed: Accessed: 12 September, 2014 Read More