Personnel Management Practice - Case Study Example

Assignment title: Student name: Student number: Tutor: Campus: Date: 1.0 Introduction Subway is a restaurant that was started in 1965 by Fred Deluca, and is currently a market leader in the sandwich shops and subs giving their customers a better and healthier alternative to traditional fast foods. The restaurant offers submarine sandwiches that have a main meat condiment and vegetables. Subway restaurant has 34395 restaurants in 97 countries all over the world. The company’s headquarters are in Milford, Connecticut, U.S (Subway, 2014). There is still need for the company to consider more expansion in all of the countries that it has not been able to reach. Despite the company being a market being a market leader in the Quick food industry, there is still the quest to make more revenue through expanding its services to countries all over the world. Through expansion of subway’s products to other parts of the world, Subway is going to be able to benefit from the countless opportunities available in other parts of the world. Japan has a different culture which is going to be a strategic issue that is going to affect the International Human Resource for Subway. Japan is known to be an economic house which obviously means that this will be a great opportunity for the Subway restaurant. This report will focus on the differences between USA and Japanese culture and some of the international human resource management strategies that Subway can use to venture in Japanese market. 2.0 Country Analysis 2.1 American culture The American culture tends to be centered on individualistic values where everybody considers himself/herself and others as autonomous, independent and reliant on oneself to be successful in whatever endeavor. It is important to note that American population is more of heterogeneous as compared to the population of other Japan and other countries (Kumayama, 2005). America according to Fells (2012) is a low context country where the message has to be coded explicitly as little meaning can be derived from the context. This reality can be attributed to the heterogeneity of the cultures which creates confusion and thus the need to have explicit encoding of messages. As such the culture is portrayed as competitive when it comes to negotiation, energetic and aggressive in pursuit of goals and objectives (Hawrysh & Zaichkowsky, 2001). Americans have a high sense of equality and thus hierarchy doesn’t have a considerable impact on relationships between individuals in the work place and in the society too. The most important thing is to get things going irrespective of your social ranking .The American culture emphasizes the importance of time as a scarce resource. If things have to be achieved then there is little room for time wastage. If anything, time in America is referred to as money. Due to this, Americans focus on the present and the future short run period. Success or progress has to be achieved within the nearest future period The Americans call it as it is without fearing to lose face. Criticisms, views and opinions are communicated directly in American culture. Assertiveness is an attribute to be envied in America in the sense that one has no fear to express their opinions without indirect connotations (Kumayama, 2005). 2.2 Japanese culture In Japanese and most of the Asian cultures, the society is more important than an individual. As such individualistic tendencies are abhorred while collectivism is admired. The interests of the society rank high up above individual interests. This culture therefore tends to promote a different type of aggression where long term rather than short term benefits are pursued. It is normal for Japanese people to adopt cooperative approach in many projects rather than competitive approach (Gudykunst, 2003). The Japanese culture is a high context society where people communicate more with the context rather than the actual words used. This is made possible by the homogeneity of the Japanese population in terms of culture, language and background. The culture also has high emphasis of being in harmony with the natural surroundings. In effect context is used very effectively in communicating in Japanese culture (Gudykunst, 2003). According to Gudykunst, 2003, Japanese focus on long-term benefits to be accrued from any endeavor they participate in. this is probably caused by the desire to be in harmony with nature and also the high focus on societal wellbeing before individual’s. Hierarchies are important for this society where people ranked high up in the hierarchy are respected more. Equality is not so much a determinant of how things should be done but rather power and position in the society and any organizational setup. Time is of important essence but persistence and meticulous execution is preferred more than hurried actions. Japanese are not so much under pressure from deadlines but rather prefer building good relations and legacies that will outlive the present humankind. It should however be noted that Japanese value time differently from Americans. In Japan everything can be achieved within the present and also in the future while Americans feel under pressure to achieve today (Kobayashi & Viswat, 2011). 2.3 Further analysis of the foreign country culture using Hofstede’s Cultural Dimensions According to Geert and Jan (2005) Geert came up with a cultural dimension which was based on the interactions between organizational culture and national cultures and they affect behavior of an in. Some of these dimensions include power distance, individualism\collectivism, uncertainity audience, Time Oriented, masculinity, uncertainty avoidance, 2.3.1 Power distance in Japan Power distance refers to the degree to which members of a less influential group of people in the organization like a family embrace and expect that the power is differentiated equally (ITM international 2003). As indicated in the diagram above, the power distance of Japan is at a moderate level of 50. Hierarchy and seniority ranks in Japan are very well identified in organizations but past studies have identified that in Japan, the highest is ranked in relation to recognition but have a moderate way of utilizing the skills at the work place (Rehu, 2005). In Japan, the society is believed to have vertical relationship inside the society. All the human relationships in Japan are usually based on the person’s status, education background as well as their hierarchal structure (Jun and Muto 2005). There is need for the international Human Resource manager to recognize this for him to be able to create a good relationship with the workers through persuasive skills. They must fully understand them as well as listen to them and especially be sensitive to their personal problems. 2.3.2 Individualism This is the degree to which the individual members of an organization can integrate into groups (ITIM international, (2003). Japan only scored a low of 40 in this model which makes them a collectivist society. In the history of the Japanese’s, a group was a village or a family and in today’s world, a group is an organization (Herbig & Lawrence 2008). As the saying goes, ‘two heads are better than one’, then it means that when the manager hands over a task to a group of employees and not to an individual, this will enhance collective problem solving through brainstorming. It is important that the international human resource manager ensures that there is harmony in the group which will reduce conflicts in the organization. 2.3.3 Masculinity in Japan This refers to distribution of roles to different genders (ITIM international, 2003). It is the degree of materialism, assertiveness as well as lack of concern for the other people. Japan ranks very high in masculinity with a high of 90 and is actually said to be the country with the highest masculine all over the world. This can be traced to Samurai which emphasizes on masculine, honor, assertiveness and the role of sex separation (Herbig & Lawrence 2008). Here, men have more say than the women since they are considered to be the bread winners of their family.. People in Japan are workaholics. International Human Resource Mangers need not be very sensitive towards their employees and they must be very clear and not be mixed up. 2.3.4 Uncertainty avoidance This deals with the society’s tolerance to for ambiguity as well as uncertainty (ITIM international, 2003). Japan has a very high score of uncertainty in the place of work which makes it impossible for them to work in unexpected situations. Japanese prefer to work with rules and regulation as well as protocols so as to avoid making mistakes. They do not like drastic changes. As an international human resource manager, there is a need to keep the rules and regulations fixed as changing them will make the employees feel unsecure. 2.3.5 Life Time Orientation This is the final dimension. For the long terms, there are thrifts and perseverance but those values that are associated with short term are respect for tradition, [protecting one’s face as well as fulfilling social obligations. Japanese score high for this particular dimension with over 70 making them a long term oriented. A study conducted indicated that Japanese managers usually develop a marketing plan for periods between 3years make sure that the employees follow the same time frame so as to pan for their work (Fredrick & Jun, 2003). This will relate to having a life time employment to avoid high uncertainty. 3.0 Different industry relation system at home and in Japan According to Heibutzki, (2010) Industrial relations basically refer to the relationship between the employer and the employee. The industrial relations differ in USA and in Japan. In USA, the American workers have very little influence over their working conditions as well as their wages. This was until 1935 when the congress passed the National Labour relations act. The workers won the right to join labour unions and participate in collective bargaining. In Japan, they have harmonious labor-management relations whereby, the organization is a paternal entity that takes care of all its loyal employees. About 25% of all the Japanese employees are unionized. Most of the unions in Japanese are organized along their company lines and therefore, there are no craft or industrial unions but just enterprise unions. This type of structure is formed from the very close relationship between the worker and the company which makes this vertical relationship to be a forum for employee participation as well as a strong negotiating body. Collective bargaining is decentralized. The industrial relations in Japan rely heavily on informal consultations between the management and the employees to settle their disputes ( Heibutzki, 2010) 4.0 Job analysis Subway will be seeking to recruit a manager for the subsidy that will be opened in Japan. The job description for this position is as described below. Manager Position Description The person is responsible for directing, planning and overseeing the operations of the new subsidiary to be opened in Japan. Primary responsibilities Work with the HR manager to recruit, interview, select and hire the required number of employees To oversee and direct employees in the operation unit in accordance with Subway policies and procedures Mentor, coach and develop staff and oversee new employees coming on board with the help of the HR manager Foster a spirit of team work among the functional department members Create a workplace culture which will be consistent with Subway’s mission, vision, values and guiding principle. Job requirement Knowledge and experience in international culture issues Better than average written and spoken English and Japanese Should be a citizen of USA Management experience in team-oriented workplace Must have a work permit to work in other countries Education and work experience Must have Minimum of a Bachelor's degree or equivalent in business Specialized training in managing human resources, preferred A minimum of 5 years of responsible leadership experience in management or supervisory positions 5.0 Strategies of International Human Resource management 5.1 Staffing Approach Subway restaurant will use Geocentric or global staffing approach in Japan. Through this strategy, Subway will be able to apply the global integrated business strategy and be able to manage its employees on a global basis. Subway will use expatriates only on key positions as senior managers, high-level professional and technical specialists. In addition, the restaurant will make sure that a certain percentage of its work force will be local citizens. If subway restaurant applies this approach, it will have the following advantages; Will Permit closer control and coordination of international subsidiaries Cultural similarity with parent restaurant which will ensure transfer of management practices Will establish a pool of internationally experienced executive Will Give subordinates a multinational orientation through experience at parent restaurant Increase acceptance of the restaurant by the local community Recognition of the restaurant as a legitimate participant in the local economy Demonstrates trust in local citizenry According to Armstrong (2008), the main purpose of the development function is to offer that adequately trained personnel in an organization who is capable to fulfil his/her goals, as well as to contribute to better growth and performance with his work. Development of subordinates should be treated as a special field of human resource management which includes education, organization development, planned individual learning, training and career development. At the international level, human resource development professionals should consider: 1. Development of a special group of globally minded managers 2. Specialized training to prepare expatriates for assignments abroad 3. Training and development of employees located in subsidiaries around the world 5.2 Training and Development Creation and transfer of international human resource development programs will be carried out through centralized and decentralized approaches. In centralized approach, the training originates at the headquarters of Subway and the trainers will travel to subsidiaries. In our case, geocentric approach is centralized and therefore training will develop via inputs from both at Milford, Connecticut, U.S and subsidiaries staff. Also, to maximize training effectiveness, it is very important to consider how trainees learn most effectively. Cultural factors usually have a very strong impact on training practices in different parts of the world (Dowling, 2002). For example, in Japan, where power distance is moderate, the relationship between the trainer and trainees tends towards equality. Expatriates are more successful when their companies train them to prepare for their work and life abroad and lack of this training is a major cause of expatriate failure. Sub way restaurant should use cross-cultural training (CCT) to train its expatriates. This will prepare these expatriates to work and live in a different culture since coping with a new environment is more challenging as compared to dealing with a new job. The table below outlines some of the popular methods and gives a brief description Cultural Briefings Explain the major aspects of the host country culture, including customs, traditions, everyday behaviors. Area Briefings Explain the history, geography, economy, politics and other general information about the host country and region. Cases Portray a real life situation in business or personal life to illustrate some aspect of living or working in the host culture. Role Playing Allows the trainee to act out a situation that he or she might face in living or working in the host country. Culture Assimilator Provides a written set of situations that the trainee might encounter in living or working in the host country. Field Experiences Provide an opportunity for the trainee to go to the host country or another unfamiliar culture to experience living and working there for a short time. Source: Francesco & Gold (2003) 6.0 Measuring cost effectiveness of the training program To measure the cost effectiveness of the training program that has been developed above, we will use Return on Investment method where the actual cost of training is subtracted from the total value of benefits and the results are then divided by the total cost of training. To begin with, the costs will be subdivided into different items. Once we have determined the different costs, the various benefits are then counted. By doing so, you can determine whether you have value for the money you used in training. The following simple steps are used in determining the ROI on the training program developed above. 1. Defining your objectives The first step is to define the goals for the training. The objective of the training in Subway case is to ensure that the employee is well aware of the Japanese culture that will affect the way they conduct business and let them know of the cross cultural issues that may affect them and some of the strategies they will use to adopt in the new country. 2. Application Application of what was learnt during the training is assessed after three months to determine whether the employees are applying them in the real business context. In this case, has the employee been able to adapt to the Japanese culture, their values and the society. 3. Cost assessment Under this section, the cost is broken down into different items. Each cost item is given its share of cost to determine the total cost incurred in the training. These costs should include trainer development, instructors, facilities, administration, programme materials, travel, meals and accommodation. 4. Benefit assessment Under this section, the benefits are converted into monetary value including those benefits that are difficult to quantify such as the customer satisfaction. Benefits such as time saving are easy to quantify and can be determined by multiplying the number of hours saved by employees and the average hourly rate. 5. Doing the sums Once step 4 is complete, the ROI can be determined using this formula: ROI = (value of benefits – cost of training) / cost of training It should be expressed as a percentage and achieving a minimum of 25% is said to be a good ROI. 6. Evaluation In order to maintain a high ROI, you need to maintain that by regularly checking on the training effectiveness and if it is a low ROI, corrective measures need to be taken. Conclusion From the above analysis, we can conclude that it is necessary to have International Human Resource Strategy when you are venturing into a foreign country especially considering that there are diverse culture which means that people do things differently. If Subway implements the recommended strategy, it is likely to reap a lot of benefit and the adaptation process for the foreign employees will be easy. References Armstrong M. (2008), Personnel Management Practice, Kogan Page Francesco A.M.; Gold B.A.,(2003) International Organizational Behavior, Prentice Hall Dowling P.J.; Schuler R.S.; Welch D.E.(2002), International Dimensions of Human Resource Management, Belmont, Wadsworth Gudykunst, W. (2003). Cross-Cultural and Intercultural Communication . SAGE Hawrysh, B., & Zaichkowsky, J. (2001). Cultural Approaches to Negotiations: Understanding the Japanese. European Journal of Marketing , 25 (10), 40-54 ITIM International. (2003) : Geert Hofsted Cultural Dimensions retrieved on 15th March 2014 fromhttp://www.geert-hofstede.com/hofstede_japan.shtml Kumayama, A. (2005).Japanese/American cross-cultural business negotiations. intercultural communication studieS (1), 51-67 Kobayashi, J., & Viswat, L. (2011). Intercultural Communication Competence in Business: Communication between Japanese and Americans. Journal Of Intercultural Communication , 26 (1) Jun,J. & Muto, H (2005) the hidden dimension of Japanese Administration: culture and its impact. Public Administration Review, 125-134 Rehu M. L (2005). A performance Motivator in one country, A non motivator in another? An empirical study Proceedings of the sixty – fifth annual meeting of the Academy of management Herbig, P & Lawrence J (2008) Cultures as an explanatory Variable for Japanese Innovative process, Cross cultural management, volume 5 Heibutzki R (2010) Industrial Relations Laws Retrieved on 15th March 2014 from http://www.ehow.com/list_7253998_industrial-relations-laws.html Subway (2014) The History Of Subway Retrieved on March 15, 2014from http://www.subway.com/subwayroot/about_us/history.aspx Read More