International and Comparative Human Resource Management and Employment Relation - Case Study Example

CRITICAL ESSAY By Name Course Instructor Institution City/State Date International and Comparative Human Resource Management and Employment Relation Introduction In the past few years, companies have experienced increased competitive environment, due to globalisation. According to Myloni et al. (2004, p.518), globalisation enabling forces, like the international trade liberalisation, marketing and research by major multinational companies (MNCs), the global production integration, and the advent of key economic regions such as the European Union, has facilitated corporations to invest abroad so as to maintain or gain competitive advantage. HR and values systems assist in shaping the culture of the organisation as well as the individuals operating within and also have an effect on that culture; and in consequence, MNCs try to transfer their human resource management practices overseas. However, Chee Shong (2008, p.94) argues that HRM contains a key limitation when MNCs attempt to put global strategies into practice. This according to Myloni et al. (2004, p.518) is largely because of the intricacies attributed to managing as well as employing individuals from different cultural and national backgrounds. For this reason, the study of HRM practices diffusion across countries has turned to be more and more crucial in international HRM research. In this case, research exhibits that HRM practices transfer from MNCs to their foreign subsidiaries can be dependent on the MNC’s origin country, organisational distances between the parent as well as the host country, in addition to the organisational pressures surrounding the host environment (Lawler et al., 2008, p.2). In spite of widespread evidence concerning the contextual factors associated with the resemblances or differences of HRM practices in MNC overseas subsidiary, little is known concerning the level to which high-performance human resource management practices are established in overseas subsidiaries. The essay, seeks to critically analyse the extent to which Wal-Mart and JUSCO through their foreign host country subsidiaries have aligned with the host nation’s culture and institutions and adopted the host nation’s ER and HRM systems and tried to introduce their own organizational culture and their own ER and HRM systems. Besides that, the essay compares and contrasts the approaches adopted by Wal-Mart and JUSCO to overcome various issues in the host country. Corporate Background Wal-Mart Wal-Mart begun as a small retailer in Rogers, Ark in 1962, and has since grown big to have thousands of stores internationally and in US. Thanks to innovation, Wal-Mart is generating an all-in-one experience that allows customers to shop anywhere and anytime in the stores as well as online. The company is without a doubt generating opportunities and conveying value to communities as well as customers all over the world. Presently, Wal-Mart runs more than 11,000 retail units in 27 nations under 71 banners, and electronic commerce websites are functional in eleven countries (Wal-Mart, 2013). Notably, over 2.2 million associates have been employed by Wal-Mart worldwide, with 1.3 million from United States. According to Wal-Mart (2013), global ethics has been behind the successful Wal-Mart’s integrity culture, whereby policies have been developed and sustained to promote ethical behavior. JUSCO On the other hand Japan United Stores Company (JUSCO) is the largest general merchandise stores in Japan, and a subsidiary of Malaysian-based AEON. JUSCO came into existence in 1970, and the name has been maintained in Japan, but operates under other names in Thailand, mainland China, Hong Kong, and Malaysia. In Japan, JUSCO has almost 170 superstores that it controls as well as almost 560 other supermarkets and superstores managed by its regional chains (JUSCO, 2006). Besides that, JUSCO has expanded into other retail businesses, such as specialty stores, department stores, and numerous restaurant chains. JUSCO is also becoming more and more involved in providing financial, leisure as well as other services and in the development of commercial property (JUSCO, 2006). Countries cultural comparison: Similarities and differences Evidently, Japan and China share many similarities in terms of culture more than their geographical contiguity.  Both countries have created very rich cultures as well as prodigious senses of national identity. Besides that, the two countries share similar value systems and religions, which continue influencing them.  Still, in spite of all the above mentioned similarities the two countries’ recent histories has forced them to deviate into two very different contemporary cultures (Wah Wong, 2014, p.10). This has mainly been attributed to the evolution of economic policy in both countries. Besides that, the value system of Japan was shaped with an integral focus on cultured work ethic, and so this value system functioned to assist instead of hindering evolution of Japan into an Economic Power in the present global economic system. In japan, there is an increased sense of loyalty to work, which according to Gong and Suzuki (2013, p.378) arises from the adopted sense of responsibility that needs Japanese workers to work for the well-being of others. Evidently, the Japanese perception of self is exceedingly distinct from that of U.S people since in Japan, everyone is believed to have a distinctive heart, soul, spirit, and mind, but the concept of self is viewed as an obstacle to development. As stated by Martin (2002), the Japanese create identities, which include co-workers, relatives, and friends openly so as to share feelings as well as overcome their weaknesses. So, the employees’ relationship in Japan’s work setting is very imperative. U.S. employees, on the other hand, are mostly individualist and endeavour to look as self-sufficient and courageous as possible. Moreover, as mentioned by Martin (2002), the Japanese have an exceedingly resilient sense of nationalism and see themselves as more superior than other cultures. Even though Americans as well have a resilient sense of national pride, the country accounts for most racial conflicts, which consequently, lessens the ability to collaborate. The systems of education in U.S and Japan are as well very dissimilar; the Japanese education system is very rigorous, and that is the reason why most workers are recruited while at university, but in US a high-school graduate is still poor in writing and reading. Such dissimilarities according to Sakikawa (2012, p.16) can negatively impact U.S. companies looking for entry level employees. Manager in Japanese firms see employees as their most vital resources, and therefore, in order to develop such resources, the Japanese company offer their workers permanent employment, significant job rotation and cross-training as well as a policy not layoff. In consequence, the human resources are used by Japanese as a competitive weapon. On the other hand, employment in the United States is to some extent similar to an open door, whereby employees are regularly laid-off during the economic recession, and there is almost no commitment to training. According to Martin (2002), US companies use the approach of scientific management, which is rooted in specialisation system where every employee carries out a few monotonous tasks. In companies using this approach, employees are de-skilled and neither the workers nor the management trust one another. U.S managers always poach trained employees from their competitors; so, companies are using other companies' HR investments to remain competitive. Whereas equality seems to be the pillar of obsolete communist culture in China, Mah (2012) posits that Chinese usually have a resilient admiration for etiquette and hierarchy as compared to Americans. Therefore, hierarchy helps Chinese interact with other employees, particularly foreigners in a professional setting. Therefore, Chinese are more accommodating that Americans. The U.S as indicated by Kitayama and Cohen (2010, p.259) is a society supporting individualism, stressing personal achievement and individual personality freedom, and promotes competition among employees. On the other hand, China is the society promoting collectivism, an environment that is easy to create a harmonious association between managers and workers. HRM practice in US, Japan & Mainland China International HRM as mentioned by Edwards and Kuruvilla (2005) involves managing more activities, such as focusing on cultural differences as well as fusion, employees’ personal lives, and external influence experienced by workers. Generally, poor investments in training have resulted in low levels of skills as well as knowledge in workers, which according to Simonin and Özsomer (2009, p.507) is the main obstacle to learning. As evidenced in Simonin and Özsomer (2009) study, employee training improves the human capital of the organization, which consequently improves the Organisational performance. A positive relationship was reported by Autono (2008) between training of subsidiary managers and staffs and the knowledge level transferred by the parent company to the subsidiary. Precisely, when levels of training at parent country and subsidiaries’ countries are high, then the correlation between acquisition of market knowledge as well as diffusion and knowledge transfer from the subsidiary will be stronger. With regard to Wal-Mart, there are lots of differences between American (parent country) and mainland China (host country) concerning culture as well as the institution. According to Culturalist approaches, dissimilarities in national cultures can clarify dissimilarities in behavior of the business between nations, for example, dissimilarities in nationally distinct attitudes, beliefs as well as values, and such cultural values are inherent. Therefore, Wal-Mart HR practices are adjusted to the culture and institution in the mainland China, so as to be able to adapt to the different Chinese culture. So as to become accustomed to Chinese cultural and institutional factors, Wal-Mart transferred HR practices to its subsidiaries in mainland China. Wal-Mart’s IHRM activities consist of training, HR planning, recruitment as well as allocation, evaluation of performance, employee relationship and salary welfare management. So as to develop talents, Wal-Mart established an enduring training approach, focusing on learning and sense of responsibility, and system for internal promotion. Being a growing and fast-paced market, China according to Baycan et al. (2012, p.177) has an enormous collection of opportunities for talented persons, especially at the top level of management. Wal-Mart prefers hiring Chinese for its subsidiary in mainland China because the cost of hiring expatriates is exceedingly high. In consequence, to retain key talent and generate employee engagement, Wal-Mart offers clearly defined career paths as well as offers workers training so as to realize the organizational goals. The United States where Wal-Mart is headquartered is somewhat a small power distance nation, whose workers are inclined not to agree to the administrative privileges concept; junior staffs normally believe to be equal to their superiors. Therefore, when the relationship between managers and workers more harmonious and equal, then the employee will be successful in training, developing, and achieving individuals value in the US. On the other hand, China is a nation with superior power distance, and so the status symbol is exceedingly important, and that is the reason why Wal-Mart adopted the humanistic policies in China, which involves developing a harmonious association between managers and employees, offering training opportunity, and enabling employees to progress. Moreover, Chinese workers are more concerned about training, career development and education as compared to their counterparts in US. The majority of workers in China, particularly top performers, join MNCs not just to be paid well but as well for innovative training as well as development opportunities. Chinese employees clearly understand the existing skill gap between them their counterparts in US, so they are keen to develop their individual knowledge as well as skills. For that reason, it Wal-Mart is aware of the significance of training and development opportunities for its Chinese workers in China and has always promoted training, mentoring, development, as well as development of career path in China. In Jusco, mainly because of the hunt for decision-making consensus, it focuses much on collective accountability as well as responsibility. Wal-Mart invests more in training and development as compared to Jusco, but more efforts are focussed on boosting the managerial quality, rather than all the workers. As evidenced in Yu and Meyer-Ohle (2008, p.34) study, Japanese companies’ training focuses more on production and is anchored on an ad hoc basis (needs of the production as well as the accessibility and suitable timing of courses provided by the outside training providers or the corporation). Basically, various factors impact workplace satisfaction for Chinese workers working at JUSCO, and they mainly include training, promotion, and remuneration. Besides that, JUSCO is process-oriented and, and this orientation is viewed by Yu and Meyer-Ohle (2008) as not an effort to carefully train them, but instead as an approach to supress their independence as well as creativity. Moreover, JUCSO is more unwilling to offer faster monetary rewards, and this can be associated with the perceived desire for controlling labour costs and its reluctance to offer formal outside training can be associated with high labour turnover. Because of the high cost of posting Japanese expatriates in China, JUSCO have hired Chinese managers into numerous higher level positions, but akin to other Japanese companies, JUSCO always promote from within. Therefore, so most of its locally-hired managers have developed within the company, and in combination with absence of training, the managers are only competent their work’s technical aspect and lack adequately structured opportunities for developing soft management skills. Therefore, the quality and quality of training as well as development at JUSCO’s subsidiary in mainland China has been lower as compared in its headquarters in Japan. Training as mentioned by Brimble and Urata (2006, p.12) reflects the attitude of the company toward its employees and its operation. Therefore, JUSCO strong interest to upgrade the competitiveness as well as the quality of its subsidiary in China together with its employees is hindered by lack of clear training programs for its employees. Back in japan, Jusco offers training in various ways, which includes in-house seminars, on-the-job training, and outside seminars, but this is less evident in its Chines Subsidiary. For years, Japanese companies have been recognised for their strong interest in on-the-job training, especially through group activities like seminars. Conclusion In conclusion it has been argued that, even though the American management theory dominance has resulted in the notion of universal management practices that is applicable everywhere, numerous studies have verified that managerial behaviors, values and attitudes are different across national cultures. There exists no good approach to managing an MNC subsidiary, given that the cultural difference in parent and host country occasionally need different management practices. Due to the Chinese system and culture particularity, HR practice transfer in China as evidenced in Wal-Mart case must take into account Chinese cultural as well as institutional factors. Undoubtedly, Chinese cultural and institutional factors have an effect on MNC’s HR practices to their subsidiaries in mainland China. As evidenced in the essay, it is HR management and the process of decision-making, where the Chinese as well as the Japanese approach to HR practices differs significantly from that of the US. Basically, International HRM integrates international as well as cross-cultural factors in the HRM, and in consequence, IHRM experiences lots of challenges due to differing culture between the MNC’s parent country and the host country. For this reason, the IHRM must manage global and local staffing; more complex strategy, expatriate assessment in addition to performance taking into account the distinct attitudes and values of the parent company and its subsidiary. Dissimilarities amongst countries as well as dissimilarities between the MNCs organizational cultures and national cultures results in key challenges to the IHRM. In comparison to HRM, the IHRM must focus more on the factors like cultural differences between nations, population type as well as employee nationality. 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