Human Resource Development at Eurocompanies - Essay Example

appears here] appears here] appears here] appears here] Euro-companies The multidisciplinarynature of what is contended to be HRD makes attempts to precisely define HRD difficult. There is some evidence in the literature of ideological or descriptive-normative models for aspects of HRD. For example Walton (1999) has identified 'Strategic HRD' as a distinctive and almost freestanding dimension of HRD. Similarly, the much discussed idea of the 'learning organisation' (Senge 1997), is a good example of the ways in which the normative prescriptive models are used as the basis for examining current practice. HRD is often presented as different to training and development with the focus being on learning and development for the organization as well as the individual. There is often a futuristic focus, with prescribed contingent outcomes. Although there are often attempts to address both the practice and the conceptual aspects of HRD, the drive to express HRD in relation to models, frameworks and typologies could result in a distancing between rhetoric and reality, similar to that found in HRM debates. As Hatcher argues, 'Without a focus on the theoretical foundations of research and practice, HRD is destined to remain atheoretical in nature and poor practice will continue to undermine its credibility' (2000:45). Historically, the development of HRD can be traced from training and instructional design, to training and development, to employee development, to human resource development. Traditionally, the field of HRD was defined by practice, not from a theoretical frame or set of research. Pat McLagan (1983) postulates the boundaries of HRD as individual development, organization development and career development. O'Brien and Thompson (1999) apply a similar framework in the Irish and European context. More recently, the emergence of HRD related journals have presented an opportunity to define the field on the basis of theory and practice. There is also a blurring of the boundaries in relation to the affiliation of researchers. Many early American researchers emanated from either an instructional design or an adult educational base. Recently Jacobs has reported that there are an increased number of manuscripts coming from business schools. This trend is a reversal of the European and UK situation. In the UK, HRD is very much the child of the explosion of HRM literature in the 1980s and 1990s. In the introduction to this volume we discuss the emergence of the HRD literature in the form of HRD texts, journals and academic symposia. In addition, the scope of HRD research can be seen to be expanding, with recent focus on areas that were not traditionally considered to be within the domain of HRD. These include organizational leadership, organizational values, workforce development issues at the societal level and labour economics. Multidisciplinary foundations and an expanding scope both have the effect of expanding the discursive resources and therefore language available to and used by HRD academics and practitioners. While acknowledging that HRD is a distinct field of scholarly research and practice in relation to HRM, it has to be acknowledged that the contextual factors in mainland Europe are an important influence upon HRD outcomes. If anything, the UK context is somewhat closer to the US experience, and it is a mistake to assume that the rest of Europe is mirrored in UK practice. So, for example, the historical role and development of HR professionals varies considerably across Europe, as do their career paths (Tyson and Wikander 1994). So, for example, in the UK a strong professional body representing both HRM and HRD practitioners regulates initial training. Elsewhere in Europe this does not happen, and HR professionals can undergo very different training. So, in Germany the extensive legal responsibility of HRM professionals for collective employee relations necessitates a strong legal training, while their counterparts in HRD are more likely to have a background in adult education or psychology. There are also differences in the extent to which HR activities are contracted out (very high in the Netherlands and Belgium) and also in the extent to which HR responsibilities are devolved to line managers (particularly high in the UK and Denmark, but much less so in France). The involvement of HR professionals in corporate governance is also highly variable with no direct relationship between this and representation on corporate boards. In addition, there are widely different emphases upon empowerment, the role of communication, the importance of training and career management, and the role of pay in performance management. The conclusion of these earlier studies in HR was that Anglo-Saxon models of HR did not fit comfortably with the reality of HR in mainland Europe. At best mainland European countries could be grouped into three: 'Latin', 'Central' and 'Nordic'. So, HRM and employee relations in the 'Latin' countries of France, Portugal, Italy and Spain are characterized by ideological divisions between the trade union confederations, a persistently strong state presence in business ownership, and the key role of trade unions in regulating many aspects of employee relations and welfare. Conversely the 'Central' countries of Germany, the Netherlands, Switzerland and Austria would feature a strong corporatist macro-economic management, a strongly legalistic 'dual system' of interest representation in employee relations, to exert co-determination over wide areas of corporate business practice, including training and development, and trade union movements (with the exception of the Netherlands) that are non-political and all-encompassing. Finally, the 'Nordic' countries of Denmark, Finland, Norway and Sweden would feature a highly centralized and institutionalized manner of handling collective bargaining based on a long-standing compromise between business and labour, endorsed by predominantly social democratic (with some occasional exceptions) hegemony in political life. However, a recent publication (Brewster and Holt Larsen 2000) would argue that the Netherlands, UK and Ireland share much in common with the 'Nordic' Group. The key features identified are a democratic approach to HR, a low power-distance culture, an acceptance of legal regulation, a history of strong state ownership, and high levels of trade union membership. In particular, they signal out a strong commitment to competence (especially in the Scandinavian countries, UK, the Netherlands and Ireland), embracing various forms of flexibility (mainly functional in Germany and Finland, but very high part-time employment in the Netherlands) that contrasts strongly with southern European countries. These countries also share an acceptance of the decline of the traditional career and greater line manager involvement in HR. However, it would be a mistake to argue that these countries are all very close to North American practice within HR. So, in most 'Northern' European countries except UK and Ireland working hours in excess of 48 per week are not worked by more than 5 per cent employees, short-term contracts are not extensively used, and variable pay systems do differ, with PRP and bonuses being commonly used in the Netherlands and Denmark, but profit sharing very common in France and Germany, and employee share ownership plans (ESOPs) in UK and Ireland (Brewster and Holt Larsen 2000). Yet, there is a risk that the distinctions between the different national business and employee relations systems become overdrawn. There are two additional international dimensions that complicate the European context for HRD. The first is globalization, and the second is the specific impact of the European Union. While it is easy to list the key features of globalization (the expansion of international companies; the increasing vulnerability of domestic business 'champions' to international competition; the accelerating velocity of business transactions aided by information communications technology, and the internationalization of production by means of multinational corporations (MNCs)), it is less easy to ascertain what this might mean for HR at the firm level. Even within MNCs there is considerable debate as to whether there is a general trend towards either 'homogenization' of HR practice across different companies and sectors, or a move from 'polycentrism' towards distinctive company-based employment systems, or towards greater heterogeneity between MNCs with a simultaneous corporate 'isomorphism' (Ferner 1997). Recent research would suggest that there is a 'nationality' effect on MNC HR practice strongly influenced by the country of origin, but mediated through the context of policy and practice in the host country. The resulting tensions force MNCs into various adaptation strategies, the most important of which is 'Anglo-Saxonization': a convergence in MNC structure and behaviour around a model of international operation typical of highly internationalized British or US MNCs. Home business systems can differ substantially in terms of the inter-relationship between companies structure, the financial system and the nature of corporate governance and control systems. So, for example, long-term relationships with banks and a relatively low degree of reliance on the stock companies as a source of finance in Germany can be contrasted with the 'short-termist' focus upon share price typical of UK and US firms, with their consequent heavy reliance upon financial control and performance management systems and the predominance of the finance function over the commercial and production functions. The interrelation between this and labour companies institutions such as the nature of collective bargaining, the system of vocational education and skills acquisition, plus the division of labour within the enterprise, has significant implications for approaches to human resources in general, and to HRD in particular. So, for example, in Germany this involves a view of human resources as an investment in the firm, encouraging employment stability for core workers, accompanied by flexible work organization and the acquisition of skills through heavy investments in training. Yet, at the same time the influence of traditional German approaches to management development and managerial career development will often persist in German MNCs which emphasize the long-term acquisition of specialist expertise within a specific management function, as opposed to the more Anglo-Saxon career 'tournament' or 'carousel' of frequent moves across different functions, and even companies spurred on by performance-related pay systems that link executive remuneration to personal and corporate performance, all underpinned by general executive development programmes. Thus, the growth of global business adds considerable complexity to the context of HRD practice within Europe. In addition, at the supranational level, 'the structures and institutions of the EU and the EEA are creating an economic, political, and regulatory space whose character and dynamic are distinctive when set against wider global developments' (Marginson 2000:11). Unlike any other region in the world, the EU and the European Economic Association (EEA) have political institutions that have considerable capacity to control the process of international economic integration. This is evident in the implementation of the programme to create a single European companies which has involved considerable rationalization and restructuring of European industry, and a competition policy that has opened up national companies to European-wide competition, such as in airlines and telecommunications, and financial companies. This has had the effect of encouraging European companies to organize on a pan-European basis, and for international companies based outside Europe to inwardly invest in order to consolidate their presence. It is therefore not surprising that cross-border mergers and acquisitions involving both European and US-based companies have increased, and the single companies has also led to the creation of new European scale companies through joint ventures and strategic alliances. These developments illustrate why the pattern of HRD policy and practice has become so complicated, and why distinct European regional management structures have been created within international businesses - Eurocompanies emerging in certain industries and sectors, as distinct from the global corporation. Finally, it is important to acknowledge the strength of small and medium-sized enterprises (SMEs) throughout the European economy, and also that the state sector until very recently was very prominent in Austria, France, Italy, and Spain (Ferner 1994). Across the EU, over 99 per cent of businesses employ less than twenty-five people, and SMEs (those employing less than 250) account for two thirds of total EU employment, and 55 per cent of total business turnover. However, there is considerable variation between EU countries, both in terms of the relative sizes of SMEs (micro-businesses employing less than ten people predominate in the southern European countries of Greece, Italy, Spain and Portugal, while SMEs tend to be on average much larger in the 'Nordic' and North European countries). Measure of government support for SMEs also vary with substantial investment in human capital for management and workforce training in Denmark, Finland, Norway, Portugal, and the UK, and a close integration of SMEs within active labour companies policies in Belgium, France and Germany. However, in contrast with the USA, where since 1993 70 per cent of the 18 million new jobs created have been in SMEs, the infrastructure of public-private partnership is not so well developed in respect of guaranteed loans and venture capital, and the transfer of R & D from universities to SMEs. So, in conclusion, the contextual basis for convergence and divergence in HRD practice is complex: the different origins and scope of the field of HRD, different national business systems, the differential impact of globalization upon business located within the EU and EEA; the persistence of distinct national business systems, and the strong position of SMEs. All these shape the European agenda for HRD. There are both similarities and differences between European countries, and also with the USA. It is therefore to be expected that this will influence the European HRD agenda. To date there have been few comparative studies of HRD practice between Europe and the US, and few between different European countries. Such a project requires a community of European scholars of HRD sufficiently familiar with the prevailing US models of HRD, to be able to devise a common research design. The First Conference on HRD Research and Practice Across Europe, held at Kingston University in January 2000, can be seen as a step in this direction, providing an opportunity for exchange of ideas for around seventy delegates from the UK, France, Italy, Spain, Germany, the Netherlands and Finland. Reference: Brewster, C. and Holt Larsen, H. (eds) (2000) Human Resource Management in Northern Europe, Oxford: Blackwell. Ferner, A. (1997) 'Country of origin effects and HRM in multinational companies', Human Resource Management Journal, 7(2): 19-37. Hatcher, T. (2000) 'A study of the influence of the theoretical foundations of human resource development on research and practice', Proceedings of the Academy of Human Resource Development, North Carolina. Marginson, P. (2000) 'The Eurocompany and Euro Industrial Relations', European Journal of Industrial Relations, 6(1): 9-34. McLagan, P.A. (1983) 'Models for excellence: the conclusions and recommendations of the ASTD training and development competency study', Washington, DC DC: ASTD. O'Brien, G. and Thompson, J.E. (1999) 'The development of Irish HRD professionals in comparison with European professionals' roles, outputs and competencies', International Journal of Training and Development, 3(4): 250-68. Senge, P. (1991) The Fifth Discipline: the Art and Practice of the Learning Organisation, New York: Century Business. Tyson, S. and Wikander, L. (1994) 'The education and training of human resource managers in Europe', in C. Brewster and A. Hegewisch (eds) Policy and Practice in European Human Resource Management: the Price Waterhouse Cranfield Survey, London: Routledge. Walton, J. (1999) Strategic Human Resource Development, London: Financial Times/ Prentice Hall. Read More