Organisational Innovativeness and Knowledge Sharing - Case Study Example

Effective HRM Practices, Organisational Innovativeness and Knowledge Sharing Introduction The purpose of this research work is to examine the issues relating to the human resources management with a special focus on the case study of Flextronics. The scope of this essay is to evaluate the effects of human resource management on the growth of the organisation. The limitation of this study is that it pertains to a particular organisation, namely Flextronics that deals with electronic manufacturing services. It cannot be generalised to other sectors, such as the service sector. The Flextronics Central and Eastern European (CEE) operations in early 2000 had been headquartered in Vienna. These had chiefly covered Austria and Hungary. The sites in Austria had efficient work routines and an experienced workforce. On the other hand, the Hungarian plants had several issues, including high employee turnover, inexperienced personnel, and inability to adapt production capacity to consumer demand. In order to address this problem, a Flextronics Academy had been established in the CEE region. As such, Flextronics has to focus upon several cultural and institutional features. Diversity Management Human resource management provides an explicit approach to employment management. As such, it endeavours to acquire competitive advantage via the strategic deployment of a workforce that is competent and committed, by employing a wide range of cultural, personnel and structural procedures[Smi071]. The necessity to include context specific insight in a globalised and multi-cultural world justified the relevance of cross-cultural management theory. Explaining the capability for action through an approach that is value based and rational is of greater significance, intellectually more stimulating, and has better prospects of promoting the subject area, instead of engaging in a mere comparison of cultures or nations along reductionist lines or attempting to arrive at predictions on this basis. It had been suggested that implicit responses could be captured, due to the fact that a major proportion of culture was non-conscious and implicit[Jac11]. This buttresses the necessity to formulate new methods to supplant projective techniques that are unreliable, as well as to create new paradigms that can address intuitive, implicit and context-specific action. The competitive compulsions of globalisation have compelled many MNCs to outsource several of their activities, such as innovation functions and manufacturing, to external suppliers. Many economic activities transpire via alliances and outsourcing, and this has made the management of inter-organisational association critically important[Jea15]. Several research studies in strategic HRM have shown that HRM practices affect employees jointly and not in isolation. In addition, it has been contended that HRM practices in a firm influence its performance, in a manner that is directly proportional to the fit among these practices. There has been significant research upon the correlation between productivity, turnover, and financial performance and other organisational outcomes, and internally aligned HRM practices[Fos15]. Nevertheless, organisations constitute socially created phenomena that possess agency and significant power. They are akin to the majority of institutions, to the extent that they emerge from contestation and are fundamentally political in nature[Mey142]. In addition, linkages facilitate the alignment of HRM to business strategy. Moreover, fit is described with regard to the degree of consistency between the requirements, demands, objectives and structure of a component, with those of another component. Several types of fit have been defined, including horizontal, temporal and vertical. These are crucial and the robustness of these links determines the effectiveness of HRM strategy. These are crucial and the robustness of these links determines the effectiveness of HRM strategy. Vertical fit entails the alignment of business strategy and HRM practices, various phases of the product life cycle of an organisation and employee behaviour. On the other hand, horizontal fit relates to the congruence among different HRM practices and other functional areas[Cha101]. Finally, temporal linkages acknowledge the necessity for short-term strategies and performance necessary for addressing the emergent strategic issues. Culture Flextronics had been founded in 1969, with its headquarters in Singapore. This company constitutes a major provider of Electronic Manufacturing Services (EMS). It operates in 30 nations and has a workforce of 162,000 employees. This company’s operations are in infrastructure; computing; consumer digital devices; white, semiconductor and industrial goods; marine, aerospace and automotive; and medical devices. This company has operations across the world. As a consequence, several issues had come to the fore, primarily due to cultural peculiarities. Hofstede had defined culture as: “Culture is the collective programming of the mind that distinguishes the members of one group or category of people from others”[Hof111]. It is apt to describe the safety culture of an organisation by referring to its attitudes, beliefs and values, vis-à-vis safety. Safety culture is improved in the presence of effective top to bottom safety communication and interactions. There should be simplicity and clarity with respect to policies, procedures, safety messages and employee safety responsibilities[Abd16]. In addition, safety culture has to necessarily incorporate hiring practices, safety training and education, company orientation and safety management. Individuals tend to anticipate a degree of cultural adjustment that could result in potential transitions in the values and decision making choices of organisations. Since, strategy is constructed upon the organisational culture; such changes produce a deleterious effect upon the basis of the strategy and have the likelihood of bringing about a transition in it[Dut131]. Upon providing support and fostering the cultural basis of strategy, the basis of strategy can be stabilised and its drift can be minimised. For instance, the bestowal of certificates with regard to the successful accomplishment of a training module evoked contrasting reactions. In the US and Eastern European nations, these certificates had been accepted readily and had been considered a symbol of employee achievement. However, a cautious approach had been adopted by the employees of the Western European nations. These individuals had regarded the certificates as an appraisal that could have a constricting effect upon them. In addition, these employees had demonstrated a proclivity towards a straightforward and simplistic feedback. In addition, Flextronics developed a very useful programme for future line managers. This programme provided leadership and HRM qualifications to the participants. Moreover, this company introduced the Flextronics University, which commenced operations as a web-based learning and management device for its Mexican and US operations. As such, innovativeness and knowledge sharing pertaining to organisations can be affected by effective human resource management (HRM) practices. Specifically, HRM practices have a major influence upon the existence and formation of trust in organisations. HRM, per se, has been regarded as a crucial agent for generating and preserving trust in organisations, as it affects every level of an organisation and moulds employment relationships[Van16]. The primary best practices of HRM are: appraisals, employment security, internal career opportunities, profit sharing plans, training systems, voice mechanisms and the extent to which jobs are designed narrowly. This prediction has been supported by a large number of scholars[Beh131]. Thus, firms that aim to achieve success in the contemporary international environment and competition have to undertake appropriate human resource investment, in order to procure and develop human capital that acquire improved capabilities, knowledge and skills, in comparison to their competitors. In fact, several scholars, including Ferner and Gamble, had demonstrated that the primary influence on MNCs effort to obtain control over their subsidiaries was none other than their country of origin[Thi12]. Moreover, the subsidiaries of MNC like Flextronics are entrenched in several layers of institutional environments. Nevertheless, these subsidiaries are inclined to acknowledge their principal field of reference on the basis of the extent of embeddedness in a specific field. For instance, independent subsidiaries with a local orientation could find it essential to comply with local regulations, norms and values, whilst undertaking their habitual HRM activities. On the other hand, the structured or globally oriented subsidiaries could incorporate a primary field of reference that is internally focused to a greater extent, and could be more likely to adopt HRM practices that are internally consistent[Naj13].The primary reference point for such subsidiaries could be other large international organisations or similar subsidiaries in the MNC network with which they could be contending for survival and resources. Flextronics should entertain concern for these issues in the context of culture and other institutional forces. International Performance Management Performance management is a vital feature of HRM. It denotes an evaluation of contemporary or prior performance or outcomes of an employee, team or organisation. In addition, it constitutes the basis for a number of business practices that are associated with HRM, including, staff training, recruitment, rewarding and career development. With regard to the globalised market, performance management is an intricate process[Sla14]. Since, Flextronics has been conducting business operations in 30 nations, it should make its employees more receptive to the environment or culture of the nation, where they work. In addition, strategic human resource management (SHRM) has been stressing upon the significance of HRM practices for developing the experience, knowledge and skills of employees; knowledge of networks and groups; and organisational capital. These elements are the components of the overall intellectual capital of the firm. It has been recognised, on the basis of human capital theory, transaction cost theory and resource based theory that human capital is vital for preserving the competitive advantage of a firm[Lak14]. As such, the literature on SHRM is primarily devoted to the US context. This has raised apprehensions among researchers regarding its applicability to other national cultural contexts. However, evidence exists that HRM best practices have proved to be successful in South Korea, India, UK and France[Lak14]. Moreover, it has been observed that the developing nations require organisations that are effective, have the appropriate size, and adopt the required work processes and technology. Instances of HRM facilitating development objectives are: selection of competent public leaders, correlation of managerial performance to results, extension of support to regimes that oppose corruption and enhancement of employee engagement[Ber15]. Nevertheless, the contemporary business milieu has compelled companies to resort to new business models, so as to retain their competitiveness in a market that is uncertain, as well as unpredictable. It has become indispensable for organisations to transform and adapt themselves to the demands of the external and internal environment in order to flourish and endure in the competitive environment[Raj13]. This has rendered innovation and innovativeness critical for survival and growth of organisations. Strictly speaking, quality can be regarded as a driver of profit and innovativeness as that of growth, whilst both are drivers of market value. Training and Development It has been conceded that organisational performance is determined by the conduct of employees and that such behaviours can emerge as a source of sustainable competitive advantage. Such practices determine the type of employees that are selected, their motivation and skills, as well as the incentives and opportunities that such employees have in order to design novel and improved means of carrying out their tasks. Such HRM practices are frequently termed as high involvement practices of HRM[Moi11]. For instance, the MNCs of South Korea implement an ethnocentric staffing approach. However, there has been an increase in the employment of nationals from host countries. These companies emphasise language training and international training for expatriates. In addition, these companies implement home-oriented selection criteria and procedures, performance appraisal, and compensation and reward schemes[Kan14]. A vast array of training and development programmes has been provided for the express purpose of developing local managers. Similarly, Flextronics has to concentrate more on training its employees in the specific areas that they attend. This would minimise the problems to be faced by the local managers in dealing with their tasks. In addition, information technology (IT) is integral and fundamental for the growth, support and sustainment of a business. IT ensures high returns, and advanced IT enables firms to address market intricacy and to derive competitive advantage[Far13]. As such, IT has emerged as an essential feature of strategic planning for enhancing the performance of businesses and for improving customer service[Far13]. In addition, advanced IT has the potential to mobilise employees and business partners in the organisation. Moreover, skill development is a national, organisational and functional challenge. It is required of the senior line and HR executives to produce a novel vision and plan for managing talent. Nevertheless, the power of HR could be limited. Thus, some HR managers had disclosed that they could exercise scant influence upon business strategy decisions. In some countries, such as Hungary and Turkey, convergence had been discerned with regard to HR planning, selection, recruitment, compensation, training, job evaluation, salary surveys, employment of outsourcing services and increasing professionalism among HR practitioners[Hor11]. International competition depicts rapid development, which has exposed firms to tremendous pressure to develop rational worldwide strategies. This has promoted coordinated internalisation of HR at every level. In order to address this challenge, firms endeavour to reduce costs by identifying best economic practices in general business operations and in HRM. Thereafter, these firms attempt to standardise these practices in their global operational units. In turn, this leads to the presence of general emerging patterns of convergence in several HRM practices across borders, including, basic employee benefits and pay that is determined by individual performance[Pai11]. Recommendation Flextronics has to develop more innovative programmes through its web-based learning programmes, in order to educate its personnel to adapt to the globalised environment. It should make them more conversant with their training programmes, so as to circumvent any discrepancy regarding their qualification or quality of training procedures based on their location or environment. Conclusion Market economy driving forces induce HRM practices to follow a path that is quite similar, regardless of the nation involved. This rests on the presumption that best practices and methods truly exist and have been adopted in regions where a market economy functions[Sve07] This is evident, whilst perusing the effect of institutional forces in the European Union that ensure increasing similarity in HRM practices in different nations. Furthermore, such HRM practices are affected by deeply ingrained value systems and cultural traditions that promote and preserve divergence. For instance, a comparison between the HRM practices in Estonia and Slovenia provides specific insights into the manner in which the HRM function has undergone a transformation in two of the new Member States of the European Union. Hence, one of the major challenges being envisaged by the Multi-National Companies such as Flextronics pertains to the necessity to strike a balance between local adaptation and global integration. As such, the national origin of the MNC is regarded as having a major effect in arriving at this balance. 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