Human Resource Management at the POG Azerbaijan Subsidiary Company - Case Study Example

umаn Rеsоurсе Маnаgеmеnt in an Intеrnаtiоnаl Еnvirоnmеnt Name Course: Tutor: Institution: Date: Organizational management has evolved into its current status in the market. In this case, organizations with the increasing multinational status tag are evolving and developing into their new status. The development and emergence of international status and global markets has enhanced increased organizational growth as well as increased profit margins and shareholders’ value. As such, organizations have increasingly developed strategies to venture into these expansive and profitable markets (Harzing and Pinnington, 2011, p.25). Thus, strategies such as franchising, exporting, subsidiaries and joint ventures have been adopted in venturing into these foreign markets (Li, Lam and Qian, 2001, p.116). As a result, organizational needs for human resource in formulating, implementing and evaluating organizational strategies and strategic plans have emerged. With the emergence of international status, organizations have shifted from the traditional human resource management structures to new international human resource management structures ( Karjalainen, 2010, p.103) Traditionally, organizations operated in controlled local environments with similar human resource cultures, social orientation as well as labor regulations. As such, human resource management was effected on the basis of these cultures and local standards (Brewster, Sparrow and Vernonet, 2011, p.44). However, the international human resource management platform presents a different business scenario. The platform allows for increased human resource management issues. This essay evaluates the POG Company case study that focuses on the Azerbaijan subsidiary to evaluate typical issues arising in on human resource (HR) management in the international environment. The POG Azerbaijan subsidiary Company represent a case study of typical HR challenges facing multinational organizations in the management and enhancement of international human resource management policies in congruence with the findings of Lovanirina, Ariss and Barth (2012, p.119) who argued that multinational organizations face human resource management challenges. Organizations face an increased international human resource management challenge leading to the development and establishment of arrange of issue. On one hand, the organization faces a diversity challenge. In the POG case study, the organization, despite its multinational status remains dominantly a Dutch managed enterprise. This extends to increased organizational perception as a culturally biased enterprise (Amaldoss and Jain, 2005, p.1452). Moreover, its workforce is predominantly male leading to failure of attaining merits of women management characteristics. A second issue arising in the case study is the concept of employee working and safety standards at Azerbaijan Company that operates in the foreign market with headquarters at Netherlands4. It is argued that the organization, due to the risky nature of the industry it operates in; present its employees to an increased safety risk. As such, it is expected that the organization should establish legal safety frameworks through which its employees should be secured (Hirsch and Quillen, 2003, p.213). However, instead of adopting these approaches, the organization lacks a centralized employee working and safety standards framework. Instead, its respective business units are charged with the responsibility of developing such frameworks exposing the organizational employees to increased safety risks. A third human resource issue arising from the case study is the concept of recruitment and selection in the organizational workforce. It is established that the organizational recruitment process has over the years been infiltrated by the aspects of nepotism. As such, the organization has over the years increasingly developed an increasingly incompetent workforce that is based on nepotism as evidenced by the interview offered by the POG Company Azerbaijan CEO in the Company case study. Moreover, the CEO argues that this has implicated on the overall organizational promotional framework and subsequent employees workforce motivation due to biased unfair and unequal treatment in the organization. In addition, the organization faces an increased challenge in training its workforce. The organizational training facility in Amsterdam faces increased management costs due to the adopted program challenges. As such, the Azerbaijan subsidiary organization faces the dilemma of cost and benefit analysis. Therefore, the organizational training for its employees working as expatriates has raised the ethical dilemma of the worth of recruiting a diverse workforce if their training increases the overall training and operational costs Finally, another issue emerges in the course of managing the multicultural workforce. It is established that diversity in employee cultures necessitates increased management approach diversity. As such, the existing traditional HR practices and training program at POG Company Azerbaijan subsidiary are insufficient and to some extent irrelevant in serving the workforce. The above issues lead to the existing human resource management dilemma at the organization. In order to enhance increased organizational productivity and performance at POG Company, it is imperative for the organization to address the established issues. As identified above the company case study presents a wide range of issues that seek attention and radical strategic corrective measures in order to facilitate eventual organizational human resource management success and the overall organizational strategic objectives attainment. The POG Company case study evaluation singles out the workforce diversity and recruitment and selection challenges as key among the issues in the case study that require immediate executive management attention to enhance long run organizational success instances. From the case study statistics, it is apparent that the POG Company management and employee workforce lacks enough diversity. Workforce diversity can be evaluated through a range of strategic aspects and approaches. Thus, diversity can be described as it was defined by Fey Pavlovskaya and Tang (2004, p.82). The authors stated that diversity is the concept of inclusiveness. In this regard, the authors stated that diversity includes increased and justified equitable representation in an activity. This can be applied in POG Azerbaijan subsidiary HR management and the respective organizational success aspects. Employee diversity can be explained in terms of gender inclusion and representation. Diversity in this case includes the development of a workforce in which all groups are equitably represented. This can be argued through the implied merits of such gender diversity. Miller (2007, p.435) conducted a study to evaluate the implications gender imbalance in an organizational workforce. In this case, the study sought to establish the actual organizational costs incurred as a result of gender workforce diversity deficiency. In its hypothesis, the study argued that such organizations faced reduced strategic goals achievement rates. In this regard, the study established that organizations lacking gender diversity encountered a reduced and negative reputation in the industry. As such, the study established that organizations lacking gender representation were negatively perceived in the society. It is apparent that the global social and cultures are changing. In this case, the role and position of women in the society has considerably changed. The society and global cultures have increasingly accepted the contribution and presence of women in strategic and leadership positions (Trauth, Quesenberry and Huang, 2009, p.478). Therefore, organizations failing to comply with these new perceptions are perceived as chauvinist in nature and sticking to outdated cultures aspects. In this regard, the POG Azerbaijan subsidiary Company falls at the risk of this category. In the cases study analysis, it is evident that of the 90% organizational executives, only a handful 5% are women. In this regard, it is evident that the organizational executive management is dominantly male that negates the role and contribution of women in its operations due to their increased marginalization. Failure to include gender diversity has denied the organization an increased opportunity to enjoy the organizational management merits of including women in executive management position where policies are formulated and drafted. Jogulu and Wood (2006, p.239) in a study to evaluate the role of women in management, established that organizations faced an increased management success through use of women in strategic plans and strategies development. The study established that women executives were increasingly focuses and customer oriented than their male counterparts. As such, this allowed for increased consumer satisfaction and subsequent customer loyalty. An additional measure to organizational workforce diversity is cultural diversity in the employees’ base. Multinational organizations serve on the global market. In this case, the organizations are required to showcase diversity through employing an increased workforce from the respective foreign markets. In this case, failure to recruit employees form the foreign markets reduces the organizational competitiveness with respect to its market reputation as well as the respective foreign markets political goodwill. Mogalakwe (2008, p.426) argued that in order to enhance increased organizational international human resource management, it is imperative for organizations to recruit foreign labor. However, the acquisition of such labor leads to the emergence of numerous challenges as evidenced by the POG Company case study. In the case study, is apparent that the organization faces a qualifications and expertise challenge in the foreign markets workforce. This is explained by the interview offered by the POG Azerbaijan CEO who states that despite the organizations efforts to recruit local workforce, it is imperatively difficult for the organization to acquire enough qualified workforce as mechanical, electrical and production engineers. As such, this results to increased recruitment and training costs that greatly implicate on the overall organizational profitability levels. Therefore, in a bid to establish a workforce cultural diversity, POG Company faces skills and experience shortage that not only increases the recruitment costs but also risks the organizational operational and management services that could strategically reduce the organizational market competitiveness in the long run. Organizational workforce acquisition process starts off with its recruitment process. In this case, organizations depend on the overall functioning and success of the recruitment process to facilitate successful HR development in the market. Searle (2006, p.339) conducted a study to evaluate the rationale of successful human resource recruitment processes. In this regard, the study developed a hypothesis that company success was hedged on successful recruitment process. In its analysis, the study evaluates the implications of ethical policies in the recruitment process. The study established that organizations applying ethical recruitment process based on fair and justified platforms, encountered increased recruitment success and eventual qualified workforce success in the industry. In this case, the study developed the conclusion that ethics conformance was vital in enhancing the development of a qualified and experienced workforce. In this case, a review on the POG Company reveals that the organization lacks this criterion and faces an ethic dilemma in its recruitment process. On one hand, the organization faces the challenge of nepotism and cultural inclinations in its recruitment process. Abdalla, Maghrabi and Raggad (1998, p.554) argued that nepotism is a bias towards an individual’s relatives and close family members. In the event that nepotism is experience in the recruitment process, organizations end up developing a workforce base comprising of relatives who are in most cases under qualified or inexperienced in developing their expertise skills. Therefore, the organization faces the challenge of an incompetent HR due to nepotism. Keles, Özkan and Bezirci (2011, p.11) sought to establish the negative implications of nepotism in an organizations workforce. In this case, despite the recruitment of under qualified staff, the study sought to evaluate if such nepotism had implications on the overall organizational motivation levels (Keles, Özkan and Bezirci, 2011, p.13). The study developed by Keles, Özkan and Bezirci (2011, p.14) established that nepotism negatively implicated on the organizational employees motivation. In its analysis, the study established that nepotism once it succeeded under the recruitment stage it evolved onto an increased challenge that influence organizational workforce promotion and workforce development (Keles, Özkan and Bezirci, 2011, p.16). Consequently, undeserving employees acquired increased promotions as opposed to the deserving employees’ workforce that subsequently was demotivated by such developments (Keles, Özkan and Bezirci, 2011, p.11). This is the impeding challenge For POG Azerbaijan subsidiary Company. In this case, with increased organizational recruitment nepotism infiltration, the organization risks the emergence of nepotism based promotion processes will negatively implicate on its employees workforce motivation (Keles, Özkan and Bezirci, 2011, p.15). Therefore, the concepts of nepotism in recruitment present as a major HR challenges. Further, the organizational recruitment process faces the cultural inclusion challenge, in this case, the management, that is majorly Dutch dominated, has over the years perpetuated the concept of cultural bias in the recruitment process. McCoyd and Kerson (2006, p.392) conducted a study to evaluate the implications of interview panes on the characters of recruited employees. In this case, the research study adopted a hypothesis that the organizational HR recruitment panel members attributes greatly implicated on the character of recruited employee. In its analysis, the study established that the cultural, gender and social beliefs on interview panel members impacted on their candidates’ selection. In this case, the study established that human beings are naturally biased. In this case, they are biased towards aspects that are in line and agree with their beliefs and culture. Consequently, panel members are inclined into selecting candidates with cultural and social orientations similar to theirs. In this case, the POG Company faces a major challenge in its recruitment process. A majority of its executive members are Dutch implying that the interview panels are Dutch dominated. Consequently, the organization has faced an increased challenge of recruiting an increased Dutch workforce at the expense of other cultures qualified workforce in the industry. This scenario increases the organizational possibility for negative reputation in the market as it is perceived bias and thus reducing its market competitiveness in the foreign markets with qualified workforce denied employment opportunities in the organization on their cultural background basis. St-Onge, Morin, Bellehumeur and Dupuis (2009, p.274) argued that a negative market perception and an increased negative perception in the market considerably reduces the overall organizational global market competitiveness as compared to its competitors. In turn, such a competitiveness loss decreases the organizational capability to increase its profit margins and considerably outdo its competitors in the industry. Therefore, based on this analysis, it is apparent that the recruitment challenge is a major human resource management issue that seeks radical strategic address to reduce on its negative implications. This essay analysis has established two key issues that require strategic management attention to reduce on their implications In this case, the raised issues are workforce diversity and recruitment challenges for the POG Company. Therefore, in order to enhance the resolutions of these challenges, this essay offers recommendations for execution. The recommendations are based on the established analysis and the subsequent theoretical literature available on the raised concepts. Moreover, they represent strategic alternatives for consideration at POG Azerbaijan subsidiary Company decision making process. This evaluation paper recommends the diversity enhancement programs and recruitment outsourcing options to the POG Company management. One of the recommendations that would serve the POG Company subsidiary is the establishment of team work. Team work is categorized as one among the emerging issue in HR management. In this regard, team work is applied in respective HR issues resolution due to its application merits. On one hand, Dysvik and Kuvaas (2010, p.624) conducted a study to explore the merits of the application of team work attribute as a HR management tool. In its analysis, the study developed an argument that team work application reduced on employees’ conflicts and demotivation. Indeed, the study established that organizations adopting this management approach acquired increased employee productivity and the eventual development of a conflict free employee culture. Therefore, the study recommended the application of this tool in managing employees’ conflicts and demotivation challenges. In addition to the study, Emery and Oertel (2006, p.15) sought to establish avenues in which the management would acquire increased organizational performance through team work application. The authors established that increased employees recognition, shared training sessions, workshops and the establishment of cross functional teams played a significant role. Further, they argued that the application of these issues enhanced the establishment of an increased interaction rate between organizational employees that is an imperative component in employees’ team work building approach. Therefore, based on this analysis, it is apparent that employees demotivation and nepotism issues in recruitment at POG Azerbaijan Company, Azerbaijan subsidiary. In this regard, this evaluation recommends the development of cross functional teams and the establishment of an employee recognition program. Employees who perform extraordinarily should not only receive promotions, but an avenues should be established for instance through the establishment of an organsational newsletter, through which such employees are honoured. The utilization of this approach would trigger group competition and subsequently increase employees’ productivity. In addition, the organization should develop cross functional training teams. In this regard, such teams will play a significant role in extinguishing the existing training and development challenges. The cross functional teams would be representative of both professional and cultural diversity. Therefore, their respective developed training programs would reduce on the currently negatively perceived western training culture that is often expensive as the organization operates in the foreign market with its headquarters in Netherlands. The adoption of this recommendation would not only enable the organization overcome the existing motivation and training challenges, but also proactively mitigate against future occurrence of similar HR management issues. An additional recommendation developed in remedying the organizational existing challenges is the development of an outsourcing approach. Studies have developed to evaluate the implications of outsourcing services in organizations. In this case, it is argued that outsourcing is an imperative business practice in the changing organizational framework. In this case, outsourcing enhances increased quality and capacity building in respective organizations. On one hand, outsourcing allows organizations to acquire services and infrastructure. In this case, it is relatively cheaper for organizations to outsource services that do not form the core of their business (Harland, Knight, Lamming and Walker, 2005, p.832). Maintaining services provision facilities is an expensive organizational venture As such, organizations seek to reduce on these costs through outsourcing them at times of need. Further, outsourcing allows for increased service quality. In this case, the outsourced organizations specialize in the services provision allowing for the establishment of systems efficiency and quality (Harland, Knight, Lamming and Walker, 2005, p.835) A study by Colings, Scullion and Morley (2007m p.199) on expatriates use established, outsourced services are often of an increased quality. Therefore, based on these arguments, it can be argued that outsourcing of recruitment services for POG Company would serve as a quality enhancement tool. This can be evidenced in the case of Caspian Oil and Gas Company serving in Azerbaijan that has successfully employed this approach (Tatibekov, Adams and Prochaska, 2004, p.46). As such, it would allow for the establishment of a focused interview panel. This, unlike the organizational based interview panel that is biased towards the Dutch culture, the outsourced services involve a global representative panel that allows for objectivity in the recruitment and selection process. Consequently, the adoption of outsourced services may help in mitigating the existing organizational recruitment human resource issue. In this regard, through objectivity development recruitment, subsequent POG Company human resource challenge such as nepotism, cultural bias, unjustified promotions and the subsequent decreasing employees productivity and demotivation would be considerably reduced (Quartey and Puplampu, 2012, p.84). In summary, this essay develops and argument that international human resource management is an emerging challenging strategic issue in multinational organizations. In this case, the essay argues that the emergence of regulations, culture and perception diversities in the market led to increased management challenges. In order to validate these arguments, the essay adopts the POG Azerbaijan Company case study, a multinational Dutch organization. In its analysis, the essay establishes a range of human resource issues in the organization such as training, nepotism and multicultural workforce management. In particular, the essay single out the diversity and recruitment process issues as strategic and one that require drastic corrective measures. In its analysis, the essay establishes that workforce diversity allows for increased organizational decision making rationality due to increased opinions perspectives diversity. In addition, the essay establishes that a lean and efficient recruitment process allows for the recruitment and eventual selection of a qualified workforce. Therefore, in order to overcome the existing organizational challenges, the essay recommends the adoption of a diversity program as well as outsourcing of recruitment services. Through the establishment of these recommendations, the essay argues that the other emerging issues in the case as the operational issues that could be mitigated through processes adjustments. References Abdalla, H. F., Maghrabi, A. S., and Raggad, B. G. (1998). Assessing the perceptions of human resource managers toward nepotism a cross-cultural study. International Journal of Manpower, 19(8), 554-570. Amaldoss, W. & Jain, S. 2005, "Conspicuous Consumption and Sophisticated Thinking", Management Science, vol. 51, no. 10, pp. 1449-1466. Brewster, C., Sparrow, P. and Vernonet, G. (2011) International Human Resource Management, 3rd Ed. London: CIPD. 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