General Electric Company: IHRM Analysis - Case Study Example

GENERAL ELECTRIC COMPANY: IHRM ANALYSIS Name Institution General Electric Company: IHRM Analysis Introduction The analysis of international human resource management practice is truly a complex approach. The success of this analysis lies in the effectiveness of tools of study used in the research. It also relies upon the success of the choice of methodologies in the study. This is in relation to either theoretical or empirical approach. Similarly, enough information must be gathered in relation to the company under study. In this particular case, the focus is on the human resource department of the company. Therefore, all practices of the company in relation to international human resource practices will have to be analysed. The focus is to get the practices of the company that cannot only be identified and analysed, but also put on a scale with other practices elsewhere. In achieving this, the effectiveness of these practices will be of great importance. At the same time, looking at some of the challenges the human resource department and the company in general have faced in relation to these practices may also be very profitable. In our case, the focus is on General Electric Company. More details extending to the mission, vision will also be analysed in the light of drawing reliable conclusions Background of the Company Contribution of Founder Thomas Edison to the Success of the Company The success of General Electric Company is majorly accredited to its founder, Mr Thomas Elva Edison. It began its operations in 1890. By that time, the only competition the company faced was from Thomson-Houston Company led by Charles Coffin. The two companies continued growing together. They kept on exchanging ideas until it came a time when the two founders saw it fit to merge. This took place in 1892 and after the two companies combined is when the name General Electrical was given. Edison made significant inventions that formed the core products around which the company is built. These included lighting, industrial products, power transmission systems, medical appliances, etc. The company was involved in the search for the first engine booster. In 1930, the General Electric launched the plastics department. The growth of General Electric has been overwhelming from then. Their portfolio management has been outstanding over the years and it has contributed immensely to its success. They have diversified their innovations to make sure they fully tap into the mass of opportunities around them. The Role of Research in the Success of Company The first Industrial Research and Development Laboratory in the United States was established in 1900. The facilitator of this research centre was Charles Steinmetz and was supported by three other people. The whole idea about the research laboratory was conceived by Charles Steinmetz. The goal was to explore the arena of lighting and electricity and have a cutting edge over other competitors. After the idea was implemented, a chemistry professor Willis Whitney was chosen to be its first Director. The laboratory was involved in a series of innovations, but the main focus was the incandescent lighting. This was just to mark the beginning of innovations. In 1908, scientist William Coolidge invented a ductile tungsten filament which literally upgraded the incandescent lighting. Ever since, the success of this company has not been a secret. Two of its scientists have won the Nobel Peace Prize in their various areas of specialization. These are Irving Langmuir (in 1932) and Ivan Giaever (in 1973). Currently, the company runs its operations in world class facilities and its growth is very outstanding. Organization’s Mission, Vision, Values, Goals and Strategies The company’s mission, vision and values are reflected in the culture of the company. The company is defined by the culture and the values which govern all its operations. It determines what the company can engage in and what it cannot. Therefore, the customers and clients of the company know this company on the basis of the culture and the values which the company strongly upholds. This is because they set the parameters within which the stakeholders should expect the company to perform. At the same time, it determines the social responsibility and other corporate engagements. The culture of the company is built on the following pillars: people, working environment, volunteerism, leadership and learning and GE Foundation. Concerning the pillar of our people, the company is committed to investing in the human asset to make sure the company is not lacking in quality, visionary and exceptional employees. The company is focused on hiring, training and retaining exceptional employees so that the level of innovation in the company reaches incredible heights. In as much as all these come at a cost, the company is committed in having the best human assets to drive their mission. On the issue of working environment, the company is committed to providing the best working environment and facilities to its employees. The high standards of performance by the company achieved in the past are an illustration of how their good working environment has inspired employees to work even harder. The company prides itself in upholding high standards of integrity. This has earned the company goodwill over time now and this has boosted business performance in all areas. Nevertheless, the company still sees the sky to be the limit and therefore is focused on ensuring higher standards of integrity are achieved. Another aspect which defines the culture of the company is volunteerism. The company is focused just on increased profit margin, but sacrificing all it can to achieve customer satisfaction. This explains the philanthropic activities that the company has occasionally engaged in. The company has participated in a series of volunteer activities directed at communities all over the world. The company has also participated in other social responsibility activities with the aim of reaching out not only to its customers, but to other members of the society. Another aspect of the culture of this company is leadership and learning. To General Electric Co., learning is more than a classroom affair. The patterns of work allow learning to be a continuous exercise in the whole company. This ranges from on-job trainings, practical, apprenticeship, exhibits, etc. This has been the reason behind the growth in the level of innovation and creativity (Linebaugh, 2012). This is because as long as a company embraces learning as an everyday venture, then innovations become part of the business and daily transactions. In summary, the GE Foundation is built upon charity and philanthropy. The desire and willingness to help those in need especially the community has played a vital role in relation to its success. The company has gained not only local, but also international reputation. This has been an essential asset even in its marketing policy all over the world. The company is focused to continue in the same direction. Issues of IHRM under Analysis IHRM is an acronym for International Human Resource Management. It focuses on issues of human resource in a global set up (Dowling, Festing & Engle, 2007). It establishes the framework within which multinational corporations are supposed to undertake their human resource practices. This is aimed at ensuring that the activities of a multinational corporation are in tandem with the human resource framework in the foreign country (Harzings and Ruysseveldt, 2003). This is a wonderful approach through which a company is able to flex its operations to effectively deal with global competition while at the same time maintaining local responsiveness. Some of the factors that a multinational company may be forced to deal with in its launch in foreign market include mergers, acquisitions, restructuring and more so technological advances. This calls for flexibility in order to effectively cope with the new business environment. There many issues that a multinational corporation like General Electric must pay attention to in relation IHRM. These includemanaging international assignments, employee related issues, culture, language and communication (Dowling, Festing & Engle, 2007). Other international concerns to be addressed by the HR include currency exchange rates, compensation schemes, employee risks and exposures in the new environment. Of all these, General Electric had to overcome a number of challenges to be successful in global business. These barriers included resistance to change by some stakeholders, cultural differences, language, international ethics, perceptions, etc. Dealing with the Issue of Deployment and Employee related Contracts One of the common trends in relation to recruitment is outsourcing. This is the 21st century trend. General Electric has been engaged in outsourcing in order to deal with the issue of deployment. This has been in the bid to ensuring the company has the right blend of skills. Most organizations are opting for short employment contracts to make sure their employees are rewarded based on performance. Most employers are of the opinion that permanent employment contracts encourage redundancy. At the same time, many employers are considering outsourcing semi-skilled and skilled labour (Ruona, 2012). This trend shows how the role of human resource personnel is changing. He/she has to approach this issue from a totally different perspective from what has been known as the norm. This trend is continuing and that means human resource personnel must be prepared for this. The General Electric has not dragged behind in ensuring this for the sake of being competitive enough on a global framework. This has been the practice of General Electric for quite some time as a means of dealing with the issue of employment on an international arena. This has proved to be a great move for this company. Through this, a wealth of experience and skills has been brought into the organization. The Issue of Recruitment The company has utilized technology in dealing with issues relating to recruitment in the international market. The process has been effective in ensuring the right personnel have been selected for the respective positions. An exciting issue when it comes to recruitment is the way job applications and subsequent interviews are conducted nowadays. Technology has never been this transforming and General Electric has had a test of it. Job adverts are easily posted onto the company’s website (Garg & Pandey, 2010). It has also been common on social networks like face-book and twitter in the recent past. Job applications are being received through email. These are examples of how technology has revolutionized the whole process of job applications in relation to General Electric’s IHRM practices. Moreover, interviews have also undergone such a transformation in the company. Interviews are no longer guaranteed to take place in offices. There are informal interview arrangements that sometimes take place even at recreational centres like pubs. There are also interviews that are sometimes arranged at times beyond the working hours i.e. at night. This has been structured on a number of occasions in order to overcome the issue of tight schedules at work. On the account of technology, interviews have been facilitated even where the interviewer and the interviewee are at different destinations. One basic way to go about this is through a phone interviews. Besides, interviews can now be conducted by help of Skype and video-conferencing. This has greatly facilitated arrangement of interviews especially where the interviewee is far from the interviewer. Utilization of these technological advances in relation IHRM has enabled the company stand out in its product and service provision. Dealing with the Issue of Poaching Of the many challenges that the company has had to deal with, poaching has been very prevalent. Nowadays, competitiveness is the slogan of almost all companies and other business entities (Linebaugh, 2012). This is even tougher for multinational companies like General Electric. Every firm is putting down strategies to enable it have a competitive advantage over their business rivals. This has led to the rise of so many issues. Poaching of skilled labour has been on the rise during the 21st Century. This is an issue that every human resource personnel in the 21st century have to deal with. Retaining skilled personnel has never been this complicated. It is one of the most expensive affairs in the management of companies. This is because the process of acquisition and training of this skilled labour requires a lot of funds. After the company has invested a lot in these staff, they are poached even before attaining their payback period (Snell & Bohlander, 2012). While some of the means adopted are professional, most of them are unscrupulous. These companies do not want to invest in training and nurturing their own workforce. They adopt shortcuts by attracting already trained personnel with a promise of pay increase. This is proving to be anightmare to many human resource managers in multinational companies. This requires human resource manager to me more innovative and creative in order to successfully retain the workforce. In relation to this, General Electric is committed to providing impressive compensations to their employees to ensure that the most talented skills are retained throughout unforeseeable future. The Issue of Culture, Language and Communication This issue affects not only General Electric, but almost all conglomerates and other businesses launching into foreign market. The ease of adjustment into the new market environment is largely dependent on how quickly a company adjusts to the new environment. While culture affects the perception of the people about a product or company, language affects communication between the company and its customers. This was the issue of concern when the company was launching in some of the markets with extreme beliefs and cultures. Though it might not have been the most effective approach, General Electric Co. had to deal with this issue in order for the international business to excel. In most of the cases, it had to come at a cost to the company. There situations where the company had to hire extra local personnel to facilitate communication in some places of the country. Most of the sales and marketing jobs were strategically given to the locals to help the company deal with the challenge of communication. The company went an extra mile to provide communities with volunteer services in order for the company to effectively sell its brand. There are many other social responsibility practices the company had to engage in order to sell its name among the locals. In most foreign countries, the company took quite some times before fully adjusting to the culture of the people. Issue of Foreign Currency Exchange Rates This is also an issue of concern whenever companies launch into the foreign markets. Foreign exchange rates directly affect the transaction of business on the international platform. Fluctuations in foreign exchange rates affect business seriously. The company requires a policy that will incorporate these aspects to make sure the issues do not haunt the business. The General Electric Company tried putting affordable measure into place to ensure the business transactions went on effectively. It is not very clear which options worked well for General Electric Company, but for sure they must have been effective. Of the many options at the disposal of General Electric Co. in dealing with risks associated with foreign exchange risks, use of forwards and futures are the most common methods used by companies. These are contracts entered in between buyers and sellers with the aim of insuring against possible fluctuations in rates of exchange. This is because these fluctuations determine the price at which goods and services are to be acquired. This is where it concerns human resource most. The services affected can be hiring of expatriates to enhance productivity. Whenever the currency in the country of trade weakens, the company is forced to buy at a higher price than normal and vice versa. Futures and forwards come in to provide an alternative in relation to the issue at hand. They are contracts entered in between the buyer and the seller agreeing to exchange goods in the future at an already predetermined price. The difference between the two types of contracts relates to the fact that one is a formal contract while the other is informal and conditions of exchange are negotiated between the buyer and the seller alone. The Issue of Employee Exposure to Risks like Health, Terrorism, Legal Issues, etc. The department of human resource in the international framework cannot ignore the welfare of expatriates in connection to their risk exposure. This relates to the issues to do with health, terrorism, legal issues and many other exposures. The human resource is faced with the issue of ensuring that the well-being is guaranteed at all cost. This is the only way to get these expatriates committed to their duties in the new environment. Measures available to the company include insurance programs. The expatriates must be insured against all the predictable risks that surround the discharge of their duties and responsibilities. The company will have to cover all these costs on behalf of the expatriates working for them. In relation to General Electric Company, the situation does not seem to be any different. The fact that most of its departmental heads are deployed from the parent country is a sign that at least these costs have been incurred on them. The Consultant Engineers are leading in the number of employees that General Electric has deployed in many countries of its operations. Recommendations/Conclusion It is almost impossible to exhaustibly analyse all the IHRM issues and policies of a company like General Electric. At the same time, it is also hard to access all the information needed for an analysis of this kind. The research methodology has followed both theoretical and some empirical approaches to come up with such a detailed analysis of the paper. The diversity of human resource practices at a global arena has helped define the kind of approach used in this paper. Nevertheless, there are quite a number of suggestions that can help General Electric to deal with affairs of IHRM more effectively. First, the company ought to invest more in technology in order to effectively suit in the emerging trends. These include the use human resource software to monitor and evaluate the issues relating to their employees. This software can be of help in relation to several practices of human resource including employee appraisal. This is to ensure the company is competitive enough to handle every form of competition. Secondly, the company must invest more in innovation and creativity. The company must increase its budget to fully incorporate the needs of hiring innovative personnel to help drive the company to greater heights. Lastly, the company should review its policies to ensure the company effectively handles the issue of poaching. In summary, there many other adjustments that a company can make to improve its performance to higher levels. It only calls for leaders to be innovative and creative enough to make this happen. References Briscoe, D., Schuler, R. & Claus, L.(2008). International Human Resource Management (Global HMR). New York: Routledge. Dowling, J.P., Festing, M. & Engle, A.(2007). International Human Resource Management: Managing People in a Multinational Context. London: South-Western College Pub. Garg, A, Sharma, A & Pandey, M.R. (2010). Emerging Trends of Human Resource Management. Lachoo Management Journal 1(1), 1-53. Harzings, A.K., & Ruysseveldt, J.(2003). International Human Resource Management. California: Sage Publications. Linebaugh, K.(2012). General Electric Feels Its Own Cuts. Wall Street Journal, 23(4), p5-11. Linebaugh, K.(2012). General Electric Weighs Cuts to Lending Unit. Wall Street Journal, 17(6), p23-19. Mathis, R.L & Jackson, J.H. (2010). Human Resource Management, 13th Ed. Mason: South- western Cengage Learning. Ruona, E.A. (2012). Insights on Emerging Trends and Future of Human Resource Development. Sage Journal 14(3), 33-37. Snell, S.A & Bohlander, G. (2012). Managing Human Resources. Mason: South-western Cengage Learning. Read More