Evaluating an International Human Resource Strategy - Case Study Example

Evaluating an International Human Resource Strategy Executive Summary This essay is prepared with an intention of gaining insight of the human resource strategies adopted by Lenovo and NEC to execute their business operations with utmost efficiency. Understanding these strategies shall be considered with due significance, as these companies are noted to be entering into joint venture recently in Japan, wherein the friction between the HR strategies adopted by these two organizations shall be high importance. In order to gain adequate knowledge regarding the mentioned issue, the essay has emphasized the recruitment and selection processes and analyzed the parity between both the companies after acquisition. The various HRM strategies adopted by both the companies have been studied in adherence to the probable chances of challenges to arise during the acquisition. This essay has also studied the probable chances of attaining adequate success through the adoption of the accurate strategies of human resource policies and the ways in which, the joint venture program can be made successful. Table of Contents Executive Summary 2 Table of Contents 3 Introduction 4 Economic Drivers Influencing the International Business Environment 5 Recruitment and Selection processes adopted by Lenovo and NEC 8 Effectiveness of HRM Strategies of Lenovo 9 Analysis of the Difference in the Global HRM Approaches 10 Critical Evaluation of Relationship between HRM and Organizational Performance of Lenovo 11 Organizational, National and Cultural Issues that Influences the HRM Strategy 12 Conclusion 14 References 16 Introduction Lenovo Group Limited is one of the renowned personal computer manufacturers in the world, listed subsequent to Hewlett-Packard and Dell of the US, and Acer of Taiwan. The brand is widely regarded as the manufacturer of desktops, laptops, personal computers and mobile devices. The company also provides assistance and support in providing information technology services. It operates its activities from its headquarters in Beijing, Peoples Republic of China and in Morrisville, North Carolina, USA. Initially, it was renowned as the manufacturer and developer of personal computers along with the other internet devices. However, with the passage of time and gained popularity, it also started its business in manufacturing and selling of various mobile devices along with the area of smart phones and applications. It has also been significantly observed that the company is operating its business in three of the major market segments i.e. Chinese market (as its home country), emerging markets, an markets offering huge opportunities for its market growth irrespective of being developed or developing and has the potential for future growth and development (Thomson Reuters, n.d.). In its recent performances, it was observed that Lenovo has entered into a joint venture with NEC Corporation, which is one of the largest multinational companies operating in Japan since 1924. It serves the goal of leading the advancement of the social structure of the world through the leverage of information and communication technologies and the adoption of newer business models (NEC Corporation, 2011). It is also engaged in the task of providing safe and secure solutions to the governmental and non-governmental organizations through its diverse advanced technology and the networks of sensing technologies and advancements. In the recent days, it has been observed that these two companies have been entering into a joint venture in the land of Japan to enhance both the companies’ strategies into a single and common goal. As it is entering into a new venture, both the companies are looking for the recruitment and selection of the newer staff members within the various departments (NEC Corporation, 2012). With regards to this need and requirement of both the companies, the proper recruitment and selection process will be analysed in the essay, so that both the companies can effectively recruit staff members for their new venture. Economic Drivers Influencing the International Business Environment In order to analyse the external or the economic drivers that can strongly influence the environment of international business, it is quite necessary that the PESTEL analysis must be done on the host country wherein the joint venture is taking place. Thus, the external environment of Japan will be assessed in order to understand the economic forces influencing the business environment of the place. Political Japan possesses a constitutional monarchy form of government. The King is the supreme power of the country wherein limited number of legislative powers persists to nurture a democracy. According to the constitution of Japan, the King is quoted as the symbol of unity among the people of Japan. Apart from the King, the Prime Minister holds the electoral power among the other members of the Parliament of Japan. In the year 2009, a huge uniformity was observed in the political environment of the country. It is due to the reason that the social liberal Democratic Party of Japan had taken over the powers after 54 years, which also became a landmark case in Japan. Since then, there have been substantial developments in the country, as major focus always remains on the growth of the country’s economy and peace (Lambert, 1996). Economic Japan is the third largest country in terms of rich economic structure. It comes after the United States and People’s Republic of China. Its currency rate is also higher as similar to that of other developed countries in the world. As per the estimation done in the year 2009, it was observed that the GDP accounted to be $5.073 trillion and its growth per year was recorded at 0.4%. In the similar context, it was also observed that the people below the poverty line are estimated to be of 13.5%. Due to the less volume of people below the poverty line, it is also observed that the rate of unemployment is 5.6%, which is comparatively lower than that of the other developing countries of the world (Lambert, 1996). Social Since the ancient times, Japan possesses a patriarchal and monogamous structure of family. They do not follow only one particular religion in their society; rather, they allow the existence of various minority religions such as Christianity and Islamism within their social premises. It is also noticed that the majority of the Japanese population prefer Japanese as their first language. Apart from all these social factors, it is observed that the education plays a special role in the life of Japanese people. Education is formed as a legal compulsion to all the students of the nation, which further enriches their labour market scenario. Thus, it signifies that the people of Japan are well educated, which also adds value to their social life standard (OECD, 2008). Technological Till the year 2007, Japan had become the third largest country using the broadband services. It was observed that there were 27.7 billion broadband lines throughout the country. Japan also possesses the virtues of a highly advanced technology that is used in all the sectors of commercial as well as business purposes. The telecommunication market of Japan is also highly advanced as one of the fastest growing markets in the world. Most of the public places or the organizations are found to be highly automated with advanced technology in Japan that also adds to its industrial value (OECD, 2008). Environmental Japan is one of the highly dense populations in the world. It is also estimated that around 70% to 80% of the nation is covered with mountains and forests, making the land unsuitable for cultivation and residential purposes. It is also a rainy country with high humidity. Due to its wide range of latitudes, the country has different climatic conditions as compared to that of the other countries in the world contributing to its diversity at a larger scale (Lambert, 1996). Legal The modernised form of law is dependent on the European legal system. Few of the commonly practiced law used in the country are corporate law, trademark law, consumer contract law and the labour law. These laws were developed mostly in the year 2006 to provide both the employers and employees protection of the legislative norms (Goodman, 2008). Recruitment and Selection processes adopted by Lenovo and NEC When assessing the recruitment and selection processes of Lenovo, it has often been observed that the company prefers to recruit personnel through the internal processes itself. This further implies that the managers or the personnel are recruited or selected from within the company itself through proper grooming and development. If suitable candidate is not available from the internal sources, the company prefers to select the appropriate personnel through by conducting three phases of interview. Lenovo posts its vacancies through its websites and selects the candidates through the screening of their CV. Lenovo has designed its own recruitment websites and selects the candidates completely on the basis of their qualification, knowledge and skills. The standard of personnel requirement of Lenovo is not to select the top grade candidates but to find out the appropriate person for the job and therefore, the internal recruitment process followed in Lenovo cannot be considered as a facet of its retention program. Interview is considered as the central method of selection in Lenovo. Lenovo uses various other techniques for selection such as group discussion and various forms of aptitude tests. One of the most common selection procedures is the analysis test, using five people with different personality traits. In this process, the candidates are asked to rearrange these people according to the one most likely to succeed in the work. This test is conducted with the intention to identify the leadership and verbal communication skills of the candidates. Lenovo also keeps three months of probation period to analyse whether the candidate is capable of performing all kinds of tasks and fit himself/herself best in the workplace and in Lenovo’s organizational culture. Thus, it can be affirmed that using the similar recruitment and selection techniques, Lenovo and NEC can benefit their joint venture by gaining better and strong employee forces (Chen, 2006). Effectiveness of HRM Strategies of Lenovo It is quite difficult to measure the effectiveness of the recruitment and selection processes, as it is difficult to analyze the extent of overall organizational performances. The effectiveness of the recruitment and selection processes in Lenovo can further be examined through the level of satisfaction of the managers after the recruitment and the level of employees’ satisfaction during the job. In one of the surveys conducted in Lenovo, it was observed that the employees had 63% of job satisfaction, which signifies that the people recruited for the job has adjusted them in the environment of Lenovo. It also signifies the commitment of the employees towards the betterment of the organization. The strategies developed for the recruitment and selection process, such as analysis test and direct interview, helps the employees to be flexible and forecast their skills of leadership, which again creates a better impression on the employers mind. Correspondingly, it has been apparently observed that the recruitment processes of Lenovo are not so effective but it has gained popularity due to its effectiveness in terms of employee satisfaction and commitment along with the reward system management within the organization. The three phases of recruitment, i.e. formal interview, aptitude tests and final round of interview by the top level authorities, have further helped in determining the flexibility and the strategic integration of the employees. On the other hand, it has also been observed that the reward system management is the other determinant that makes the recruitment and selection processes easier and smoother. If the company is offering a good and attractive package of salary along with the other compensation, it is likely that the candidates will be attracted towards the selection procedure of the particular organization. Thus, it can be observed that the success of the organization largely depends on the recruitment process of that company. With the similar notion, Lenovo believes that with the adoption of proper recruitment techniques, the company can build a strong group of employees for its organization along with assuring increased efficiency of the organization in terms of employee commitment, reward system and flexibility of the employees (Snape & Redman, 2010). Analysis of the Difference in the Global HRM Approaches From the above discussion, it has been assessed that Lenovo has been emphasizing more on the proper recruitment and selection processes along with the introduction of the reward management system. These HR approaches has been designed by Lenovo in adherence to its visions and objectives. Lenovo believes that these two approaches are the major determinants for the selection and retention of the potential employees within the organization. The proper training and development sessions of the employees will make them productive and again, the introduction of the rewards system will help the organization to retain their employees for a longer period of time (Peng, 2008). On the other hand, NEC follows a simpler framework of HRM strategies such as planning, staffing, compensation, appraisal and training as their major policies (Beechler & Bird, 1992). As compared to that of Lenovo, it can be affirmed that the major differences in both the organizations is that Lenovo does not consider appraisal as a part of their HRM policies. In the modern context, performance appraisal is also one of the major determinants through which the employees can be retained for a longer period and contribute largely towards the increase in the efficiency of the organization. Hence, it can also be stated that if such differences in the HRM policies arises, the difference can lead to complexity issues in the recruitment and selection processes post merger of the company. Performance appraisal is one of the tools of gaining better candidate that also aids in increasing the productivity and efficiency of the employees. Appraisal helps the organizations to boost its employees to become more productive and give better performances in the organization. Hence, from this discussion, it can be understood that creating a difference in the HRM strategies of both the companies can create complexity in the recruitment of the new staff members after the joint venture between Lenovo and NEC commences. Critical Evaluation of Relationship between HRM and Organizational Performance of Lenovo Since its establishment, Lenovo has been adopting similar strategies for recruitment and selection of the potential candidates and to perform its various HR functions such as training and development, reward system enclosure and managing the participation of the employees. Through the use of these strategies, Lenovo has been successful in attaining its organizational goals along with attracting a huge volume of potential customers. The training and development of the employees make them competent enough to perform well within the organization and raise the level of productivity. The organization has been largely benefited by the introduction of the reward system, as it helps the organization to retain its employees and also boost them for increasing their competency level to a substantial extent. The only lacuna that prevails within the work culture of Lenovo is the performance appraisal. It not only affects the retention power of the employees but also helps the organization to raise its HRM standards to the highest level. Thus, it is suggestible that Lenovo must develop effective strategies for boosting its effectiveness in the performance appraisal system. Lenovo must also develop this system so that it can help the organization during the commencement of the joint venture with NEC Corporation. If a degree of differences is observed in the policies between two of the companies entering into joint venture, it is quite obvious that there will arise certain complexities in the efficient operation of the business. It is also suggestible that Lenovo must comply more of the practices of employee participation as it shall help in effective decision making within the organization. It is suggestible in this context that Lenovo emphasizes taking assistance from expert personnel in this context that can reward it with immense benefit (Kuye & Sulaimon, 2011). Organizational, National and Cultural Issues that Influences the HRM Strategy National Lenovo needs to take few aspects into consideration before entering into joint venture with NEC in Japan. It must take few of the organizational, national and cultural aspects into consideration. The initial aspect that needs to be taken into consideration is the understanding of general mind-set or psychology and work culture prevalent in Japan. The people of Japan were much productive as compared to that of the other developed countries and are observed to possess low demands from their employees. The labor force in Japan is further observed to be much involved in decision-making through complete participation (Pudelko & Harzing, 2009). These national features observed within Japan will surely benefit the smooth operations of Lenovo, as the developed understanding and identified key attributes shall assist the personnel in developing a proper design of its HRM policies. Organizational The organizational issues that influence the work culture of Lenovo can be assessed studying the various duties and responsibilities of the company. Lenovo usually follows the system of rewards and compensations with an intention of boosting the employees to raise their productivity. During this period, the employer must train their employees in a manner that the employees ascertain higher level of commitment towards the organization. The staff members who will be recruited for the newer venture in Japan must also be provided with attractive salary along with incentive schemes so that they can deliver better performance and raise the organizational standard in Lenovo post acquisition. Thus, these responsibilities will assist Lenovo in dealing with the various organizational issues during the acquisition (Konrad, 2006; Noe, 2006). Cultural From the above discussion, it can be assessed that the cultural issues likely to be witnessed in the post-acquisition period between Lenovo and NEC, might range from the issues of employee participation to its performance system. The cultural issues faced by Lenovo can also be ascertained through the help of Hofstede’s cultural dimensions theory. The five elements of the cultural dimension of Hofstede’s theory, i.e. individualistic/ collectivistic, masculine/feminine, uncertainty avoidance, power distance, and indulgence/restraint and time perspective, altogether provides an unambiguous explanation regarding the proper definition to the cultural issues within the organization (Peng, 2013). With the implementation of this particular model, Lenovo shall be able to identify the rudimental differences persisting in its organizational culture and that followed in NEC. This will further guide the company to take requisite measures to bridge the gaps persisting in the cultures of the two organizations and subsequently, make the change implementation process more sustainable. All these elements entail the prevalence of sound and smooth business operations within Lenovo. Conclusion The managers of Lenovo must take necessary steps to gain the support of the employees so that the organization can improve their Human Resource Management (HRM) policies and achieve success in the creation of new venture with NEC in Japan. It has taken adequate measures in providing immense facilities to the staff members so as to retain them with efficiency. The company should also focus on adopting various techniques of interviews such as formal interviews, test analysis and other methods such as group discussion to fortify its relationship with the existing workforce of both the companies and increase their readiness towards the change upcoming with the acquisition. It has been observed earlier that the company adopts various HRM strategies such as performance management, reward management, proper training and development and participation of the employees in decision making. Suggestively, as the leading company in the acquisition, Lenovo must also take active participation in understanding the differences and the similarities between the HRM processes used in both the companies individually to implement strategies in a more efficient manner and retain experienced employees in the long-run. Much of the lesser focus remains on the adoption of performance appraisal of the employees. Hence, it is suggestible that Lenovo must focus on the introduction of performance appraisal system as NEC Corporation does so. In order to maintain parity in the recruitment process of both the companies and assure success in the joint venture of Japan, it is highly required that Lenovo must emphasize the adoption of the similar strategy. With the adoption or improvement of the aforesaid strategies, it is believed that both Lenovo and NEC can attain the set goals and objectives determined in lieu of the acquisition. References Beechler, S. & Bird, A., 1992. The Best of Both Worlds? An Exploratory Study of Human Resource Management Practices in U.S.-Based Japanese Affiliates. Working Paper Series, pp. 1-56. Chen, H., 2006. Recruitment and Selection in China: An Application to the Case of Lenovo. Human Resource Management in China, pp. 1-74. Conlin, M. V., & Jolliffe, L. (2013). Mining heritage and tourism. Routledge Advances in Tourism, 1-213. Goodman, C. F., 2008. The Rule of Law in Japan: A Comparative Analysis. Kluwer Law International. Gunn, C. A., & Var, T. (2002). Tourism planning: basics, concepts, cases. New York: Psychology Press. Konrad, A. M., 2006. Engaging Employees through High-Involvement Work Practices. Employee Engagement and Firm Performance. 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