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Human Resource Management, Causes of a problem - Case Study Example

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As it appears from the case Haier has had a very successful performance so far and it was due to its unique performance management system that successfully moved from a socialist enterprise to a multinational. It is ranked as the world's sixth largest market of large kitchen appliances…
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Human Resource Management, Causes of a problem
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Download file to see previous pages These systems were very successful regarding the Chinese culture of management but since the company wants to increase its global installed base there is a question on how it is going to achieve it by following the same human resource management practices.
These are the following: increase of employee internal competition by implementing an internal ranking of employees. Employees are judged by all performance dimensions and they have to complete their tasks the same day and have continuous self-assessments. Each employee is almost an independent profit center so entrepreneurship is developed. Managers are also continuously appraised like employees and both are given chances to improve their performance by providing abundant training. A talent pool inside the company is also created.
Haier has followed a product diversification strategy i.e. it has expanded to 86 different product categories. It is doubtful if Haier can pursue the same following strategy since product expansion requires heavy investment.
Then a second part of its strategy was product innovation to niche markets i.e. developing products for specific market segments. Under careful consideration this is a strategy that can be pursued at the current moment.
Globalization which is the third component of the strategy is expanding to other countries in all aspects i.e. production, alliances etc. Globalization can also be limited for the time being since it requires heavy financial investment when it comes to building new factory sites that can be quite risky at this period of time. Globalization demands also understanding foreign cultures so it requires further research on this issue.
The fourth component was marketing initiatives that emphasized product quality and market research. Sending a message of quality is a right strategy when an organization wants to establish a successful brand name but there is a question on how Haier in the current economic crisis can keep on holding high product prices.
The last component of Haier's strategy is the innovative human resource management practices. This has been proved successful for Chinese standards but there is a question on how these strategies are going to be successful in other countries and cultures.

2) Possible Solutions.
A solution cannot be suggested without taking into consideration the global macroeconomic environment. In this case there is a global economic crisis the duration of which cannot be predicted. The global crisis has affected investments, consumers' purchasing power, belief in the stock exchange and the banks, banks provide loans to businesses by following very strict lending criteria and as a result of the above businesses limit their expansion plans, their profit margins are reduced and in many occasions they fire people. The consumers on the other side are in a psychological "trap", they feel insecure about their future therefore they reduce and change their consumption habits. They have become more conservative.
Taking all the above mentioned into consideration, Haier has to limit its product diversification since it requires heavy investment in production and marketing and sales. The product innovation to niche markets requires usually an investment in R&D. Haier has to study carefully all its R&D expenses and do a very ...Download file to see next pagesRead More
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