International Human Resource Management Strategy: Seiko Instruments - Case Study Example

INTERNATIONAL HUMAN RESOURCE MANAGEMENT STRATEGY: CASE STUDY OF SEIKO INSTRUMENTS Organizations in today’s competitive world have been looking for different methods and ways to create competitive edge over other competitors. One of the recent development in this regard is treating the human resource of the company as a strategic asset. For this reason, the organizations are working on the development of effective and efficient human resource management strategy. One of the important domains in this regard is the development of the international human resource management strategy. Globalization has forces the organizations to change the overall business operations and strategies. On one hand, globalization has allowed the organizations to expand in new markets for increasing the overall performance and profits. On the other hand, globalization has resulted in the creation of different issues and problems for the organizations. One of the major questions in this regard is the formulation of human resource policies in the host countries and hiring of the employees. In this report an attempt will be made to understand the factors and elements which should be kept in consideration while devising human resource policies for overseas operations. For this purpose, the human resource management strategies and polices of Seiko instruments in the Scottish plant will be analyzed. Seiko instruments is operating globally with 70 subsidiaries in different parts of the world. The company has been very careful in selecting the international location and formulating the international business and human resource management strategies. The company selected the location of Scotland because of several factors like, successful experience of other Japanese companies, availability of the skilled staff and workforce, and close to other markets in Europe. The management of Seiko instruments have been considerate of the local rules and regulations in term of human resource management strategies. All strategies and policies have been formulated keeping in view the legal, political and international industrial relations context. For this reason, the company adopted and implemented a human resource management strategy which allowed the overseas subsidiaries to operate their personnel and human resource functions according to the local environment and take decision on autonomous basis. It is important for the organizations to understand that the organizational behavior of the subsidiaries is directly dependent on then norms, practices, values, and policies prevalent in the environment of that particular country subsidiaries are operating in. In order to make sure that the organization is able to manage its international operations in effective and efficient manner, it is important that the human resource management operations and policies of the subsidiary company should be in accordance to the local culture and traditions. Same has been done at Seiko Instruments. The company has automated the entire personnel and human resource strategy of the Scottish plant. The general management of Scottish plant has devised recruitment, training, compensation, and other related strategies according to the local traditions and preferences. The company has been successful in creating a balance between the global standardization and localization of human resource management. The management of the company has made sure that the overall standard and quality of the products are according to the international standards and on the same time have localized the human resource management and personnel management strategies. The organizations, while devising the human resource management strategy, should keep in mind that the human resource practices and strategies are directly dependent on the culture of the host country. For instance, Seiko instruments was not able to implement the policy of the hiring the school leavers for operators because the school leavers in Scotland were not mature enough to understand the responsibility of the professional life as compared to the school leavers in Japan who were more mature and trained. Hence, it is important for the overseas subsidiaries to create a balance between the local culture and the mission of the parent company while devising the human resource management strategies and policies. International human resource management, hence, requires an integration of the cross cultural management and comparative HR and IR systems as shown in the image below: (Dowling, Festing, and Engle, 2008) The aim of the international human resource management is to maximize the overall satisfaction of the workforce and staff in a diversified and complex environment. This is because of the fact that the organization which is operating in different locations is in need of the appropriate delivery of the organization’s mission and ideology. The model of international human resource management is depicted in image below: (Dowling, Festing, and Engle, 2008) In order to understand the international human resource management strategy of Seiko instruments, it is important to comprehend the different options available to the managers for devising international human resource strategy, and the factors which directly influence the formulation of this strategy. The most important factor which shape the international human resource strategy is the overall organizational strategy. Other factors which influence the international human resource strategy are as follow: the industry in which the organization is operating, the structure of the organization, the life cycle of the organization, the international orientation of the parent company, the cultural, political, and legal environment of the host country, and the resources available. Taylor et al (1996) have identified three different approaches or orientations towards the international human resource management. These three orientations are: adaptive, integrative, and exportive as shown in the image below: The adaptive orientation of international human resource management results in the generation of different human resource systems and policies for the subsidiaries, which are in accordance to the local rules and environment. Under this orientation, the parent firm and the associated subsidiaries maintain the complete differentiation among all human recourse policies and practices. One of the main benefit of adaptive orientation is that every subsidiary can maintain its policies and practices according to the local environment and requirements. However, this complete differentiation sometimes also results in lack of coordination and coherence among the parent organization and the subsidiaries. These three approaches can be understood by looking into the staffing decisions taken by the multi-national organizations. Organizations looking for expanding their businesses in different overseas countries tend to follow three main strategies for human resource recruitment or staffing. These three strategies are; ethnocentric, polycentric, and geocentric or regiocentric. The organizations following the ethnocentric strategy tend to hire employees from parent country for the important top management positions. The companies normally opt for this strategy in view of keeping a unified and constant corporate culture in all counties of operations (Karadjova-Stoev, and Mujtaba, 2009). However, the organizations opting for ethnocentric approach face different challenges and issues. One of the most important issues in this regard is suffering from cultural myopia and ignoring the local culture practices (Zając, 2011). Organizations which opt for polycentric strategy hire nationals of host country for the management of the operations in the respective countries (Karadjova-Stoev, and Mujtaba, 2009). This approach allows the organizations to overcome the issues of cultural myopia. However, at the same time this approach can lead to the creation of the cultural gap between the parent country operations and host country operations. Organizations which select geocentric or regiocentric strategy for staffing tend to hire the employees who are best fit for the job regardless of their nationality. This approach leads to the generation of several benefits for the organizations like hiring appropriate and most suitable person for the job and understanding the culture and practices of the host country and devise strategies according to the local culture and traditions (Karadjova-Stoev, and Mujtaba, 2009). However, at the same time this strategy also offers the challenges and issues associated with the management of the diverse workforce and staff (Boussebaa, and Morgan, 2008). It is important to acknowledge here that there is no right or wrong approach of staffing and international human resource management. Every organization have to select the best suitable approach according to the prevalent conditions and environment. For instance, Lemma group is working Read More