Global Human Resource Management of Royal Dutch Shell - Assignment Example

A Profound Understanding of Culture: Defining the Key to Global Human Resource Management of Royal Dutch Shell Strategic Human Resource Management Models Guest (1987 in Legge, 2005, p. 104) provides the following definition of human resource management (HRM): The main dimensions of HRM [involve] the goal of integration [i.e. if human resources can be integrated into strategic plans, if human resources policies cohere, if line managers have internalised the importance of human resources and this is reflected in their behaviour and if employees identify with the company, then the company’s strategic plans are likely to be more successfully implemented], the goal of employee commitment, the goal of flexibility / adaptability [i.e., organic structures, functional flexibility], the goal of quality [i.e. quality of staff, performance, standards and public image]. One such model is that of Guest (1987). The model presents that HRM policies ought to work towards the achievement of valuable outcomes, including strategic integration, commitment, flexibility/adaptability, and quality. The organisation / job design policies are expected to yield high job performance for the organisation; the effective management of change will garner strategic integration, high problem solving, change, and innovation; exceptional recruitment, selection, and socialisation are aimed at yielding commitment; effectual appraisal, training and development is expected to lead to flexibility / adaptability and high cost effectiveness for the organisation; and an effective rewards system and communication will lead to quality, low turnover, absenteeism, and grievances. These are captured in the Table below: A theory of HRM HRM policies Human resource outcomes Organisational outcomes Organisation / job design High job performance Management of change Strategic integration High problem solving, change, innovation Recruitment, selection/socialisation Commitment Appraisal, training, development Flexibility/adaptability High cost effectiveness Reward systems and communication Quality Low turnover, absenteeism, and grievances Leadership/culture/strategy Source: Guest (1987, p.516) The current paper aims to concentrate on the recommendation of understanding the cultural context in which Royal Dutch Shell operates to be able to bring about the positive outcomes outlined above. Being a multinational company that operates in several countries, Royal Dutch Shell must have an appreciation of the dimensions of the national cultures in which the company operates. Effectual Work Adjustment Based on a past research by Kabasakal and Bodur (1997), some cultures are characterized by a strong slant towards collectivism and both societal and organisational levels. It may perhaps be useful for Royal Dutch Shell to initially analyze the cultures in which it intends to operate in (or is currently operating in), in terms of power distance, masculinity, human orientation, achievement, and future orientation (Hofstede, 1983). It may also look into these business cultures’ commitment and sense of duty to the organisation, respect for managerial hierarchy, type of leadership, and other ethical norms. Armed with such knowledge, Royal Dutch Shell’s expatriates can definitely influence the expectations of its expatriates and help in their adjustment to the new work environment (Hofstede, 1983). In addition, business culture communication styles should also be assessed by Royal Dutch Shell and the manner through which corporate values and organisational culture are transmitted. For instance, is it through socialisation? In some cultures, exchange of favors, information sharing and friendships are critical means of winning and developing trust. Logically, Royal Dutch Shell managers who are sent to specific countries ought to have such characteristics as patience and being open to socialisation with locals. Apparently, their expatriates may experience a whole host of changes in being sent to a global post. On a personal level, they are required to undergo a transition from an environment to which they were accustomed to one which is very unfamiliar. Naturally, this required modifications in their living habits, and entailed finding a healthy, novel balance between their work and personal preoccupations. For a majority of individuals, this expends too much time and effort. Thus, the human resources department of Royal Dutch Shell ought to take action to prepare them so that they may cope with these difficulties in adjustment. The research of Mendenhall and Oddou (1985) indicate that adjustment to the cross-cultural facets of a global assignment requires three distinct personal abilities, as follows: 1) the capacity to sustain a valued sense of self; 2) the ability to associate to host nationals; 3) the ability to intellectually appreciate the belief systems that underpin behaviors in the host country. If their expatriates were oriented with these traits, it would have been easier for them to adjust because their expectations were more effectively managed (Black, 1990b; Mendenhall & Oddou, 1985). If they possessed such traits, it would be more probable for them to adjust easily in their offshore assignments. In a related vein, Royal Dutch Shell is obliged to help select those individuals with these ideal traits for expatriation assignments. With the integration of global markets and the burgeoning growth of multinational business activity, Royal Dutch Shell has to learn how to effectively manage, coordinate, control and synergise its operations with its offshore counterparts. This preparation process, however, is not such an easy task. The difficulty lies in the fact that this requires them to have unique skills different from those that proved to be effective in Royal Dutch Shell’s mother country. Their expatriates should be equipped with the knowledge of the foreign company’s organisational culture and philosophy, home country business practices, norms and customs. Being assigned to a foreign environment with peculiar political, cultural, and economic working conditions, expatriates encounter both job-related and personal difficulties (Birdseye & Hill, 1995). If these issues expressed by the team are not given adequate attention, this results in extreme stress in both the expatriate’s personal life and life, and ultimately to expatriate turnover. Predeparture Expatriation Training Programs Royal Dutch Shell ought to ensure that training programs are given to candidates for expatriation to facilitate their adjustment to amenities, overall living conditions, and social norms. For example, cultural diversity training programs and learning sessions concentrating on values, habits, beliefs, religion and language of the country must be part of the preparation of their expatriates. These will help them undergo the indoctrination period more easily and quickly. In this context, Royal Dutch Shell expatriates assigned to offshore operations, should also be keenly aware of the particular facets of life in the new country. If expatriates that their families are made aware of these information and their expectations well managed, then unwelcome surprises may be avoided (Cavusgil et al., 1992; Marlin et al., 1995; Tung, 1982). Sponsorship Programs and Social Activities Royal Dutch Shell as the mother company may consider setting up recreational and entertainment activities such as sight seeing time, sports events, company picnics and the like. These are opportunities for the expatriates to interact socially with their offshore counterparts. These interactions outside of the work setting may allow more positive attitudes to emerge between the two nationals and prepare the foundation for building mutual trust and cohesiveness at work. If expatriates will minimize their social interface with the foreign nationals, and concentrate solely on work-related tasks, they risk being out of touch with local ways, the accepted manner of doing things, isolations, and perhaps even organisational insignificance. This is because in most countries, being an “in” team member necessitates team interaction beyond work – which is deemed effectual (Cavusgil et al., 1992; Marlin et al., 1995; Tung, 1982). Apart from structured social activities, building offshore-national sponsorship programs may also be beneficial in easing the socio-cultural adjustment of expatriates. Sponsorship programs could particularly be useful if the sponsoring family’s characteristics match that of the expatriate family in terms of the age and gender of the children, for instance (Cavusgil et al., 1992; Marlin et al., 1995; Tung, 1982). Mentorship and Pre-departure Preparation Royal Dutch Shell may also consider pre-departure training on the offshore business environment and its culture. This will certainly help them to better prepare about what to expect and expedite their adjustment period. On their part, the receiving office may consider establishing a mentorship program for these expatriates. The delegation of a senior executive from their side to act as a mentor will not only assist the expatriate in gaining a profound understanding of the business culture but may also influence others in accepting them more readily since they are under the mentorship of a figurehead. Companies which have proven themselves effective at assimilating non-natives into their fold accord training not only for their expatriate managers but also for their local supervisors (John & Roberts, 1996). Coaching for Repatriation While empirical evidence is not conclusive, it may be worthwhile to consider that an expatriate’s expectations regarding his return assignment is associated to his in-country adjustment. Naumann (1992) and Selmer (1995) suggest a serious consideration of career implications and repatriation concerns in expatriate training programs. In the future, Royal Dutch Shell should clarify to its expatriates the premium of the assignment to the individual’s career and explain his career alternatives afterwards. There ought to be a reconciliation of whether such an assignment is aligned to the person’s overall career goals. If managers perceive that their global assignment is the beginning of a critical part of their career they may be highly motivated and may throw themselves more wholeheartedly into their new role. These managers may seek out contact with offshore nationals as well as take initiative to enhance performance. Building an Effective and Culturally Diverse Team For international organisations there is an impending necessity to get groups of managers from various nationalities to collaborate either as long lasting management teams or to resource specific projects resolving critical business issues. Numerous organisations have found that bringing such groups of managers together can be difficult and performance is not always at the level necessary or expected. Royal Dutch Shell must 1) consider the nature and influence of national cultural differences, and 2) value diversity; and 3) build cultural understanding and awareness. The nature and influence of national cultural differences. It is helpful to determine a clear framework for comprehending and analysing cultural differences. One such theoretical framework has been developed by Hofstede (1983). In his original work, he determined four key dimensions which influence national cultural differences. These are: Individualism/collectivism: This aspect reflects the degree to which individuals value self-determination instead of their behaviour being determined by the collective will of a group or organisation. Power-distance: At the core of this dimension lies the question of participation in decision making. In low power-distance cultures, employees seek involvement and have a desire for a participative management style. At the other end of this continuum, employees tend to work and behave in a specific way because they recognize that they will be directed to do so by management. Uncertainty avoidance: This facet is involved with employees’ tolerance of ambiguity or uncertainty in their working environment. In cultures which have a high uncertainty avoidance, employees will look for clearly defined, formal rules and conventions governing their behaviour. Masculinity/femininity: This is perhaps the most difficult dimension to use in an organisational context. In reality, the hardship is more to do with terminology and linguistics, in Hofstede’s work the dimension related to values. In highly “masculine cultures” dominant values relate to assertiveness and material acquisition. In highly “feminine cultures” values emphasize on relationships among people, concern for others and quality of life. The results of Hofstede’s research are frequently borne out and reinforced by the practical experience of multinationals seeking to deploy international HR policies. Higgs and Phelps (1990) undertook research into Japanese financial organisations operating in UK markets and their findings showed evidence of practical experience which was explicable in terms of Hofstede’s framework. In practice this has significant implications for the development of global management teams. Using this framework, it is possible for Royal Dutch Shell to identify differences in responses to management styles, organisational preferences and motivation patterns. There are some distinct differences which can impact on the way in which managers from different cultures may behave and perform in a team. For instance, for uncertainty avoidance, it may be seen that a UK member (low uncertainty avoidance) and Japanese member (high uncertainty avoidance) of a management team would have significant differences in their initial perceptions and expectations of both team purposes and processes. From this brief illustration it is, hopefully, apparent that in order to build effective international management teams it is necessary to create an environment which both recognizes and values cultural diversity and tries to acquire cultural awareness and sensitivity. Valuing diversity. Frequently, multinationals see the cultural diversity within their operations as an area of difficulty rather than as an opportunity to build competitive advantage. This point is well illustrated by an exercise in the early 1980s carried out by Laurent and Adler (n.d.). Global executives attending management seminars in France were asked to list the advantages and disadvantages of cultural diversity for their organisations. All of the participants were able to determine disadvantages less than 30 per cent could determine any advantage. Usually, comprehending the nature and value of cultural diversity is not well ingrained within an organisation’s thinking and practice. In several ways thinking in this area has not been cultivated aligned with the trend of globalization (Houlder, n.d.). It may well be that effective performance of international management teams has as much to do with the values of multinationals as with the development processes. Adler (1983) lends evidence for this in her analysis of organisational strategies for the management of cultural diversity. However, it is critical not only to comprehend the distinctions between cultures. It is also important to determine the potential advantages and disadvantages that will probably be brought to a team by managers of different cultures. Building cultural understanding and awareness. Hofstede (1983) submitted a general framework for developing competencies for cross-cultural operations, as follows: building awareness of culture and cultural differences; developing knowledge of the impact of cultural differences and of the of the relative strengths and weaknesses of different cultures in a managerial setting; and building skills in identifying the impact of different cultural settings for managerial problems adapting behaviours to achieve effective results in different cultural settings. More specifically, Royal Dutch Shell may concentrate on the following in aspiring to have an effective global, cross cultural team: Develop cohesion and consistency in teamworking; Establish a shared and compelling vision and understanding; Ensure quality dialogue among Nodaka members; Develop feedback mechanisms to review and enhance team processes (Kakabadse & Myers, 1994). Conclusion In conclusion, Royal Dutch Shell must craft strategic programmes to be able to ensure the success of its expatriate operations. This is only possible if it is able to specifically address all the HR functions – recruitment, compensation and benefits, training and development, organizational development – with careful consideration of the culture and norms that operate within the country of its satellite office or subsidiary. This cultural sensitivity would enable it to achieve the desired outcomes of strategic integration, commitment, flexibility/adaptability, and quality, along with the organisational outcomes of high problem solving, change, and innovation; commitment; flexibility / adaptability and high cost effectiveness; and quality, low turnover, absenteeism, and grievances. Royal Dutch Shell must be able to ascertain the orientation of the country in which it operates; that is whether it is towards collectivism or individualism. Moreover, it must analyse other facets such as power distance, masculinity, human orientation, achievement, and future orientation. This may accord them with a better understanding of organisational culture with these as backdrop. 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