Evaluating an International Human Resource Strategy - Human Resource Department of Nestle - Case Study Example

Evaluating an International Human Resource Strategy Executive Summary: The multinational companies are growing very fast and due to the effect of globalization the fruitfulness is enjoyed by all type of business man from small scale to large size organization. Here in this project it has been shown that how Nestle an internationally famous company expand its business in a new dimension. By going with a joint venture agreement with a Chinese group Chi-Med the company wants to introduce new herbal drugs and medicines as well as nutrition food. The company here wants to explore the famous Chinese treatment and the herbal medicines they are using from ancient time. Now as there is a huge difference in the culture of Europe and China so what are the procedure the Human Resource department of Nestle is going to follow that has been described in the project. Contents Introduction: 4 Company profile: 5 Company’s goal- 5 H.R. Strategy of Nestle- 6 Company’s Strategy: 6 FMCG Sector: 7 Joint venture of Nestle: 8 HR Strategies for the joint venture of Nestle in China: 9 Recruitment and Selection – 9 Different position- 10 Appointments- 11 Training and Development- 12 Rewards – 13 Performance Management- 13 Employee Motivation- 15 Cultural Issue – 15 Cultural Difference- 15 Business in China- 16 Conclusion: 16 Recommendations: 16 Jaffery , 2013. Nestle – International Strategy. [pdf]. Available at: https://blsciblogs.baruch.cuny.edu/mgt4880nestle/2013/04/08/nestle-international-strategy/. [Accessed on: March 27, 2014]. 18 Introduction: In today’s world going international with the business has become quite obvious. International trade teaches how to be integrated with different countries of the world. The main purpose why international trading was started was due to the reason that every country does not have all type of natural resource. So it is not possible for every country to produce all types of commodities which are being used by the entire world’s people. Depending upon the geographical reason some country can produces some product where as some other country produces some other useful commodity. Here comes the concept of international trading. The country which have abundant opportunity to produce a particular commodity, it will sell that to the other countries of the world, and regarding which product a country faces scarcity they will buy that product from the other nation where they have the perfect resources and climate to produce that particular product. But to conduct this type of business large amount of work force is needed and this type of business demands highly skilled management to perform it in the different countries of the world. As different countries have different languages, values, customs, and cultures so an international organization has be very careful while making the internal strategies and rules inside the organization. Along with this before establishing a unit in any other foreign country the management has to look for various issues of that particular country as well as the whole world. Those are the political issues, the socio cultural side, the economy the technological environment etc (Dunning, 2004, pp 45-46). By this assignment one can come to know about how in case of an international trading house business is being conducted and how international human resource strategy helps in this work. Company profile: The international human resource strategy can be explained more clearly by critically examining any particular company who is performing in this international business world. Nestle company has been taken as an example to understand the work pattern of the industry and the company itself. The Nestle Company was started by the merger of two companies in 1905. The company was an Anglo-Swiss Milk Company which was established in the year 1866. The headquarter of the company is in Vevey, Switzerland and is considered as the largest food company from the side of revenue earning in the entire world. The prime products of the company are coffee, baby food, ice cream, pet foods, dairy product, breakfast cereals, and bottled water. Company’s goal- The tag line of Nestle says about the goal of the company. It is “good food good life”. The company has always proved that they truly believe it and according to it they serve their consumer. It is always in the prime goal of the company to give the best quality product to a wide range of customer worldwide. In case of Nestle it has been observed that always controversies has chased the company. But the company has always able to reflect the fairness in the way of performing their job. The prime concern of the management has always been towards human respect, honesty and a suitable internal environment inside the organization. It is a major success policy of the company that they have paid attention towards the labor rules, the human rights and to maintain an environment which is corruption free. They also pay great attention towards their share holders (Girard, 2005,pp 3-7). H.R. Strategy of Nestle- Behind the success of any organization in maximum cases it has been found that the reason is its well developed human resource management. In case of Nestle also the story is same. People working in this company experience wonderful work environment. The specialty of the environment is its flexibility, dynamic in nature and variety according to different circumstances. All the employees of the company are assigned with distinct work what they have to do and all over the organization an adequate policies are there which clearly mention the rules and regulation that has to be followed inside the organization. This ensures the sustainability of the employees as in the organization a fare picture exists. The management gives more emphasis on interpersonal relation and in case of building new policies inside the organization the employee’s suggestions plays an important role. Emphasis is given about the change wanted by the employee while making new policies by the human resource department. So in case of Nestle it can be said that the success of the HR department can be assessed by the performance of the employee and the success of the enterprise (Belin, 2011,pp. 2-6) Company’s Strategy: Nestle is that type of company which gives emphasis on the principles on which they have established the business. The company’s principle is created on the basic of three points. Those are corporate principle on the basic of which the business has been set up, the company’s commitment towards the business environment where they want to sustain and the last is to create the share value. This is been shown by a diagram below. Nestle has always concentrate on the outside stakeholders of the company that is the Government, the regularity authorities, the local communities, nongovernmental organization and the intergovernmental organization on which the company has to depend a lot for doing uninterrupted business (Jaffery, 2013). FMCG Sector: The Nestle Company comes under the sector of FMCG (fast moving consumer goods). This is so because this FMCG sector includes those products which are generally used within a week or month or maximum a year and has a short life span. Though from this business relatively small margin can be earned but worldwide this business is popular for low margin but high volume business as in general people either buys bulk amount of FMCG product or at the time of purchase consumer buys lower amount but very frequently they again buy the same (Malhotra, 2009, pp 7-9). Joint venture of Nestle: The Nestle Company has recently gone with an agreement with Hong Kong based pharmaceutical group Hutchison China MediTech (Chi-Med). This joint venture has been made to give attention more on producing healthy food products and to increase in producing gastrointestinal food items. This partnership is built on fifty to fifty tie-ups. The target of this partnership is give the science relating to health factors a new chance of exploring the traditional Chinese medicine to be used in this field. Chines medicine is basically made by herbal plants and are worldwide famous for its usefulness. This particular joint venture will allow Nestle to build up a new dimension in their business regarding drugs and medicines as well as nutrition food. The advantage of this joint venture is it will help the company to bring competencies in nutritional food market. Now if it is critically analyzed that why Nestle is going to build a partnership with Chi-Med group in Hong Kong it can be realized that China is very much popular for its herbal medical treatment since ancient time around the world. A partnership with Chinese Company will make the success rate more as maximum people knows about the famous herbal medicine of the country. Around the world people now want to have those foods or medicines which has no side effect. So it is quite obvious when by this joint collaboration product will be introduced in the world market they will business well .Along with this it is also a benefit for the Nestle company to be associate with a group where from they can earn the goodwill of the product very easily as worldwide the herbal medicine of China has very much trust worthy. The concept is a new one but there is a demand of this type of food and medicine in the world market. So it can be said that this joint venture will do a good business around the world (Kitamura, 2012 , pp.1-12) HR Strategies for the joint venture of Nestle in China: The above said joint venture will need some specific strategies as the origin of both the companies are from different country and the value and the culture of two country are far different. Recruitment and Selection – In case of recruiting employees for this particular project of Nestle have to decide first that where from the company is going to hire people. The option regarding this recruitment is the company can take people from Europe or from China or from any other country. As Chinese culture is very much different from the European culture so it can be a problem for the company to find people from Europe who will be agree to go to China. So it will be a better to select the normal office work employee from different part of China. But in case of people involved in the research work, there a group of employee as well as the people who are in the higher levels of management like the plan maker or the policy in structure team, there must be people from Europe and who belong to the original Nestle Company. As the total project is focused on the herbal medicine and research so here people has to be associated from both the countries. In the research work it is very vital to maintain a schedule and target as on the basic of that the products can be prepared and marketed. But in case of office staff it is better to take Chinese people in work with a European head that can make them understand the exact requirement of the work, the company’s policy as well as he/ she can maintain a balance of work among what company want from them and their comparability about that work (Archibald, 2009, pp.2-5). Now while taking those normal office people as an employee in the organization the interview questions that can be asked are discussed below. 1. What do you know about the company? 2. Do you have any experience in this sector before? 3. Why you want to work here? 4. What benefit a company will get by hiring you? 5. Are you interested in working in the other part of the world? 6. What criteria you give the most importance while choosing a company? 7. How you like to pass your time in your free hour? 8. What is your strength and how you think that can help this organization? 9. What are your weakness and how you overcome this? 10. Say something which is not included in your resume? Different position- In a new branch different positions are there which are to be filled like the office staffs, the executive employees, and the managerial head of different departments. In this particular joint venture other than all these type of recruitment a special type of recruitment is needed and that is the research people. As this venture is based on research so recruitment has to be done on that particular area also. This recruitment will be very vital as on this research group the total project is dependent. Appointments- While selecting the employees through interviews the Nestle Company can follow the Munro-Fraser model for selecting people for different positions. Those are While selecting the candidates the H. R. department has to be very specific about choosing correct candidate with necessary approvals like license, pre experience in a particular work. According to the necessity whatever will be needed to be followed at the time of recruitment. It must be noticed that no disable candidate must be chosen by the H.R. group. The salary must be announced to the candidate along with the other facilities they are entitle to get from the company so that there is no miss understanding or down of expectation in their mind after the recruitment. The duties and responsibilities are to be announced by the recruiter from before so that the candidate who have been selected for a particular job, have the correct idea about what is to be done and can perform his or her job well. It is to be deciding by the management from before that how the selection procedure is to be conducted. That is by majority votes given to a candidate in the interview panel or by decisions of any particular authority. In case of areas where maximum skill is required their ultimate selection can be done after the performance of a structured training. In this situation the H.R. department has to design a well proved training programmed. After that in the selection procedure there must be specific and cleared criteria by passing which a candidate will be selected. The total process must maintain a clear picture and there must be no kind of unfair game behind this selection. All the details of selection must be communicated with the candidate clearly. Secrecy must be maintained about the selection procedure. The selection committee people will maintain the secret inside the organization about the whole procedure. By following all these steps in the time of recruiting people the success of the joint venture will be confirmed. Training and Development- While giving training to the selected candidate the HR department has to identify that total how many types of groups are there to whom training is to be given. According to that the training schedule has to be made and persons have to be appointed for this type of training. In this joint venture there are many types of position and according to the requirement of the job the HR manager has to appoint people for this training. Now the trainer can be an employee from the Nestle Company or from the Chi-Med Organization. The training timing, place of training, durability of the training all these must be planned and communicated with the trainer and the candidates who are being called in the respective training programmed. Another very vital work before the starting the training program I the HR department has to do and that is they have to keep a record of every training program me what is to be taught in every section. Once the training is started the HR department has to observe two prime works very carefully. The first is the HR department has to take feedback regarding this training from the candidate that whether they are getting proper and developed training relating to what they have to work after this training period per day. A proper format of questionnaire has to be designed for this and purpose and should be filled by the candidates every day. Another feedback must also be taken from the trainer about his or her opinion about each and every candidate, how they are performing in the training time, how attentive they are, whether any problem is faced by the trainer for any particular candidate. This work cannot be done through any particular format. After everyday’s training there must be a restriction for the trainer to give his/ her opinion about every candidate (Fitch and Semb, 1993, pp.1-4). Rewards – It is a very compulsory element for every organization to give rewards and awards to their employees for any good work or for hard work. The reward is a necessary step for any organization as it motivates the employees the most. Every human being loves to be rewarded. As rewards gives feelings of achievements. So it is an obvious tool to motivate the organizational employee. Motivated people works more and if there is any target set in front of the employees to get reward by performing good then all the employees work more inspired. The reward again can be more inspiring if it comes with growth opportunity. So again the HR department will decide for different posts what the rewards policies are going to be are. Like where skill is the main purpose of the work there skilled person will be awarded by promotion. Posts where creativity is involved there more innovative employees will be awarded by again giving higher responsibilities. According to the hard work if a growth opportunity can be involved that means it relates more remuneration. So employee will be more inspired and the purpose of reward system will be satisfied. Performance Management- After recruiting people and giving them training the next job of the HR department is to monitor that whether all the work are being done in a correct manner or not. That is the department has to keep watch on every individual employee whether they are performing correctly not. Employees are the greatest asset for the organization as by their work and effort a company performs and achieve its goals. So whether they are performing in the correct manner or not that has to be monitored very critically. Now it is upon the HR department how they are going to assess the performance of each employee. In this the department can follow the 360 degree method in a monthly interval. That is how each and every employee is performing on that an analysis can be done on a monthly basic. At the end of each and every month a feedback session can be organized. This feedback will be taken in three ways for each employee. Like if the employee is dealing with external people like customers, suppliers or any other person relating to the work of the joint venture company, then one feedback will be taken from either of them. The next feedback will be taken from the co employee, subordinate, peers etc from them. And the last feedback will be from the exact superior or the supervisor. Now from these three types of feedback the HR department will come to know that how the employee is performing while he/ she is dealing the outside people of the organization who are very important for the success of the venture. When he/ she are working in a team along with his/ her colleges what role is he/ she playing and how much fruitful work they are achieving. The last feedback helps to understand how that employee is performing when he/ she is following the order given to him/ her and how obedient he/ she is regarding the work given to him/ her. There must be option regarding self assessment and there must be scope of informing any problem faced by an employee. The grievances can be against any one and the employee must feel free to inform his/ her complain. The HR department must maintain a same importance towards each and every employee of the organization (Espinilla, 2012, pp.1-4). Employee Motivation- Motivation is an important tool to have better performance from the employee and it helps to sustain employees in a particular organization for long time. Motivation can be done in many ways; in them the prime way is giving rewards and growth opportunities. Other than that leave facility, good amount of perks also work as a good motivational tool. The HR must structure the internal strategies in such a way that every employee has the opportunity to participate in the decision making process by giving their views, opinions and suggestions. This will grow a good positive feeling in the mind of an employee that their opinion is also considered important. The feeling will help in building the belongingness in the mind of them. Cultural Issue – In this joint venture it will be better to follow the Ethnocentric Model. This is so because in case of this joint venture there as the brand name of Nestle is more famous and Nestle is the company who are going to introduce this new range of product under its brand name so it must follow the rules and policies of the head quarter. This will make an easy form to establish a general rule inside the organization. Otherwise there can be a conflict about following cultures and policies of both the countries among the employees. So this approach will be the better option for this joint venture (Hammond and Axelrod, 2006, pp.1-3). Cultural Difference- The cultural difference in between Europe and China is very huge. In Europe people believes in freedom and love to live their life separately from their family. But in China the picture is totally different. There people loves to live their life in a family with their aged guardians. China follows more rituals and cultural festivals than the European. So it is quite obvious that in this joint venture there will be a combination of people who belong from different culture. It is the responsibility of the HR department to look after this difference and maintain parity inside the organization. Business in China- A Europe based company has every chance to face problem in doing business in China. The international business history says that many multinational companies have faced problem while doing their business with Chinese people as they have a different culture and habits. So before establishing the joint venture in China the total human resource management team has to research in details about the prose and corns of it. So that after establishment of the venture Nestle does not face any loss situation like other MNCs. Conclusion: In conclusion it can be said that the joint venture with a foreign country always brings new opportunities along with new threats. Now while doing this type of projects the company has to be more specific about what is to be done so that the venture does not faces loss. It is the research team who has to do this work. In case of recruitment also people must be selected by the HR department in that basic who are more interested to work within a foreign culture and are enough flexible to adopt new culture and work pattern. Ultimately after the joint venture has been established it is the prime duty of the H R manager to look after each and every member and have to give importance to everyone. Recommendations: In an organization the Human Resource Management plays a vital role. This is so because this department has the total responsibility about how successfully the organization will perform. As they are the only responsible department by whom the employees are appointed. The efficiency of the employee makes the organization a successful one. So if the human resource department can choose the business a group of efficient people the success of the business is confirmed. In this particular joint venture as there is a risk of difference in the cultural side so here the department has to look for very critically while recruiting the Chinese employee as well as the people the company want to take from Europe. In case of Chinese people as they have to see whether the person can survive in a company which follows European rules and customs. On the other side the department must also select those people from the head quarter who are enough capable of adopting other countries culture. References: Dunning. H. J ,2004 . Location and the Multinational Enterprise: A Neglected Factor? [pdf]. Available at: https://aib.msu.edu/awards/8490024a.pdf. [Accessed on: March 27, 2014]. Girard. R. ,2005. Coffee, Water and Kibble: A Profile of the Food and Beverage Giant Nestlé [pdf]. 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