Human Resource Management In US Subsidiaries In Europe: Issues And Solutions

What are the issues

Discuss about the Human Resource Management In the US Subsidiaries In Europe.

Human resource management is global economy deals with management of employees in business environment that is increasingly global in its expansion (Cascio & Boudreau, 2016). The purpose of this study is to explore the issues associated with Fox Flight Aircraft in Australia. Apart from operating in Australia, the organization also operates in the countries like China, Singapore and Vietnam. However, the organization is facing declining profit level in the business operation. The CEO of the organization is being high stressed with the potential takeover of the organization. The organization need effective communication and proper performance review of the employees for resolving the issues. The study will highlight the issues associated with the organization. The study will discuss the ways in which the organization will be dealing with the issues to prevent its repetition. Apart from that, some solid recommendations with their implementation plan will be demonstrated in the study to eliminate the issues.

Based on the analysis of work done, the identified issues within the airline “Fox Flight” will be considered in more detail:

The analysis points to a serious gap in the relationship between subsidiaries. According to According to Okhoro (2012), such problems can be related to the company’s etiquette policy, which does not correspond to the cultural perception of the chosen region. The confrontation between the host country and the subsidiaries is more likely a consequence of the lack of understanding in the relationship. A similar example is the giant trading network Wel-Mart. Employees had to smile at customers regardless of the situation and buyers did not correctly understand this kind of flirting. Naturally, company ignored that, while the management staff openly opposed this policy and clashed with each other. As a result, Vel-Mart had to leave the German market in 2006, mostly due to such an ethical problems (Fenton-O’Creevy et al., 2008). Based on this example, the initial weak preparation of the airline “Fox Flight” for the internationalization of business existed before the emergence of problems.

The quality of the aviation company’s products is a priority area, as both the company’s profit and reputation depend on taking appropriate measures within the specified 6 months. This is most likely a consequence of interrelated problems in the management of human resources in the host country and production sites – China and Vietnam.

Quality is closely related to the mentality of the country in which this product was manufactured (Haak-Saheem et al., 2017). Therefore, strategic search frequently begins with the nearest neighbors so that there would be an opportunity to stabilize possible negative consequences of production (Furusawa & Brewster, 2016). Since the HR diversification is bearing fruit mainly in the long term, competitors such as Oneworld, Star Alliance, SkyTeam and others, risking their reputation and serious financial losses in strategic search, have mutual assistance agreements (McGraw,2004). Fox Flight, apparently with cheap tariffs, did not take into account the importance of analysts and experts from the markets of China and Vietnam in the critical aircraft parts production and without support is in a threatening situation now. Jackson and Deeg (2008) cover three defining cultural confrontations between the US and China:

• Investment versus autonomy
• Hierarchy against egalitarianism
• Mastery versus harmony

Lack of interaction and mutual communication

From a comparison of the key culture indicators, it can be concluded that the USA and Australia have relatively similar indicators, and both countries are equally different from China in cultural aspects (Figure 1, Appendix).

These confrontations indicate a difference in outlook, which means the need of: time, team diversification and training costs for specialists to ensure approximately equal standards. As it is already noted, such an issue is a consequence of the interrelated problems of all “Fox Flight” HRM elements including HR diversity management, International performance management, staff training and development.

Tensions between young and experienced have existed for many years. Young employees of “Fox Flight” are under pressure from senior comrades and have oppositional views on their proven approaches. Modern studies explain the relationship of such discrimination to differences in the traditions of societies and religious views of people (Haak-Saheem, Festing & Darvish, 2017). There is logic in this, according to Asian traditional norms of behavior, seniors opinion is always prioritized, while the values ??of the cultures of developed states support the superiority of modern, young and fresh solutions. This discrimination consequence is the elite institutions creation within the structure of the company.

This will affect on young necessary specialists are likely to leave the team. Then, elites shall support other kinds of discrimination associated with cultural worldviews, and then, over time, will cease to take into account other points of view and with the company’s standards (Haak-Saheem, Festing & Darvish, 2017). In addition, a large number of people whose rights have been violated will sue with company, which means regular financial losses and bad reputation presence (Kshetri, 2007). The quality of modifications, products and production without new ideas will deteriorate – this will serve as a loss of the company’s stakeholders and then the issue of Fox Fligt’s departure from the country’s market will only is a matter of time.

International performance is closely associated with international performance appraisal of the employees (Jackson & Deeg, 2008). However, such international performance appraisal is lacking at ‘Fox Flight’. Moreover, performance appraisal is only conducted by the human resource managers of Australia, but the other subsidiaries are not performing the same. The headquarters of the organization adopt very ad hoc approach in their performance review without considering the economic factors of the organization. In this way, the employees of the organization are not getting proper value for their contribution in organization’s overall performance level. Furthermore, lack of performance review and career opportunities are demoralizing the motivation level of the employees that can even hamper their productivity level.

Poor product quality

Training and development should be concerned with every aspect of organizational activity (Budhwar & Debrah, 2009). Fox Flight is facing the issues of training and development in regards to the expatriates leaving Australia and being transferred to the countries like Singapore, China and Vietnam. Moreover, the expatriate training provided to these employees is very limited within half a day. There is also lack of feedback avenues for the employees to provide feedback on the effectiveness of expatriate training. Most of the employees are unaware about their career prospects, as the human resource managers do not use career development plans properly.

Kshetri (2007) seven practices is an example of this view, where he holds that employment security, selective hiring, self-managed teams and decentralization of decision-making, high contingency pay, extensive training, reducing status distinctions and barriers, and extensive sharing of information all will have a positive influence on organisational performance independent of organisation and other conditions. Essentially, scientists holding this view believe that it is not necessary to adapt the HR practices in accordance with any particular strategy or to any specific organisational context (Budhwar & Debrah, 2009).

In contrast to the universalistic perspective, scientists holding a contingency perspective argue that the relationship between the relevant independent variables and the dependent variables will vary across different levels of contingency variables. The organization’s business strategy is considered perhaps the most important contingent factor within the HRM-performance literature. The various HR activities that the organization carries out must be aligned with the organization’s business strategy, or other contingencies for having an effective impact on performance level of the organization.

In the configuration perspective, the focus lies on the synergistic effects that the HR practices can create when they are grouped together and exercised in a coherent manner (Tarique et al., 2015). It is argued that the total effect that can be achieved is far greater than the sum of the effects for every single practice. In accordance with this view, the systems of innovative HR practices had a significant impact on production workers’ performance, whilst changes in individual practices showed small to non-existing effects.

The major problem of Fox Flight is the lack of communication between the headquarters and the subsidiaries. Hence, the employees of every subsidiary are not being aware of the common goals and objectives of the organization. In this way, they are not being able to concentrate on the overall goals and objectives, which are ultimately reducing the quality of the products. Hence, the organization should immediately be concerned with smooth communication between the headquarters and different subsidiaries. Moreover, the organization should be more concentrated on enhancing the effectiveness of virtual communication among the employees of different subsidiaries. It will enhance the social cohesion among the employees of different subsidiaries. In this way, they will be better able to concentrate on common objectives and goals of the organization for improving overall quality of products (Lazarova et al., 2014). Hence, proper communication among subsidiaries would hinder the repetition communication issue in the organization.

Problems related to diversity management

One of the major issues of Fox Flight is that the organization does not embrace the rich values of working with the diverse working groups. Furthermore, the senior staffs are intolerant to work with apprentices leading to a strained relationship among them. Hence, the organization should immediately set the diversity policies with adherence with the legal policies for managing and respecting the employees regardless of their race, gender, age and culture. Moreover, human resource managers of the organization must adhere with the Equal Employment Opportunity act for providing equal employment opportunity to the employees regardless of their diverse backgrounds. Such legal policies would definitely influence the human resource managers to recruit the employees based on their talents and skills rather than on their diverse backgrounds (Albrecht et al., 2015). The organization can also implement the informal policy of diversity training for better implementing enhancing the cultural understating among the diverse employees. It will definitely enhance the respect of the diverse employees for each other (Sekiguchi et al., 2016). In this way, the diversity issues would not be repeated again in future.

From the supervision of the organizational issues, it has been seen that only the HR managers of Australia are concerned with the performance review of the employees. However, other subsidiaries of the organization are not concerned with the performance review of the employees. Moreover, the headquarters are highly ad hoc in their performance appraisal approach. In such approach, the human resource managers should implement effective human resource appraisal process as per the general economic condition of the organization (Ilo.org 2018). Moreover, the organization should concentrate more on the recognizing the performance level of the employees rather than rewarding them with monetary rewards. It will keep the organization balanced regardless of their declining profit level. Furthermore, the organization should implement the formal and informal rules regarding the performance review set by the employees of union. It will definitely minimize the gaps between the employers and employees of the organization and would never the repeat the issue of performance reviews and appraisals.

Fox Flight is not capable of providing effective and adequate expatriate training to the employees, who are leaving Australia and are being transferred to the countries like Vietnam, China and Singapore. Hence, the organization should immediately concentrate on providing effective expatriate training to the employees, who are leaving their home country and are being transferred to foreign subsidiaries. It would definitely help them to understand the culture and social tradition of the foreign countries (Jackson et al., 2014). Hence, they will be better able to adjust with different cultural and social tradition of the foreign countries. Apart from that, the HR managers should demonstrate right career development path for the employees for encouraging towards more productivity. It will definitely reduce the potential repetition of issues in training and development of the organization.

International Performance Management Issue

Conclusion 

While concluding the study, it can be said that Fox Flight Aircraft is suffering from declined profit level. The CEO of the organization is worried about the potential takeover of the organization because of lowering profit level. The working team of Australia is not performing well and there is communication breakdown across the teams and management. Apart from that, communication breakdown can also be observed among the different subsidiaries of the organization like China, Vietnam and Singapore. Hence, lack of work performance of the employees is ultimately reducing the quality of the product. Apart from that, the organization is having an issue of embracing the rich values of working with diverse people. In such context, the organization should immediately start hiring diverse employees for embracing diverse talents in improving the quality of the product.

The headquarters of the organization is highly ad hoc in reviewing the performance level of the employees. In such context, the headquarters and different subsidiaries of the organization should adopt systematic performance review method for precisely measuring the performance level of the employees. On the other hand, the expatriates of the organization are not getting adequate expatriate training to accommodate with the new culture and social tradition of foreign subsidiaries. Hence, the organization should immediately arrange effective expatriate training in to the employees leaving Australia and are being transferred to the foreign subsidiaries.

Fox Flight can effectively manage its smooth communication among the global subsidiaries through implementing effective global leadership. Moreover, effective global leaders can ensure engagement and inspiration of the diverse group of employees in challenging work environment across the national boundaries. Such leaders can better understand the different expectations of diverse employees across the countries. In this way, the organization will be able to better communicate their required information and resources to the global employees equally for better engaging them towards improving the quality of the products. In this way, such leaders can perfectly improve the quality of products of the organization.

Fox Flight needs to take diversity management initiatives for mitigating the diversity issues. In this context, the organization is recommended to undertake the measures for monitoring the effective diversity management to resolve the issues practically. In such initiative, the organization would undertake some effective measures like workforce composition, staff turnover, internal staff survey and others for tracking the effectiveness of the diversity management programs. Such measures would definitely assess the degree of effectiveness of the program to ensure diverse employees are getting equal value for their performance and talents. In this way, such strategy would surely resolve the diversity issues associated with the organization.

Issues and Training and Development

In case of the issues in performance appraisal process, the organization should adopt systematic performance review process for measuring the performance level of the organization as per the organizational standard. Moreover, the organization is recommended to adopt some measures for reviewing the performance level of the employees. In this way, the global HR managers of the organization would be able to identify the strengths and weaknesses of the employees in regards to their work performance. Hence, based on such record, the managers can arrange reward for the strong performance of the employees and provide training to the weak performers for the betterment of their performance.

In order to mitigate the issues of expatriate training, the organization should implement proper training session for the expatriates of the employees, who are leaving Australia and are being shifted to the foreign subsidiaries. In such context, Fox Flight is recommended to provide on-the-job training to the employees, who are shifted to the foreign subsidiaries. It will provide hands on experience to the employees on their new culture and social tradition for the foreign subsidiaries. On the other hand, the subsidiaries of the organization should initiate knowledge sharing mechanism for better enhancing the training effectiveness through exchanging of knowledge among diverse employees.

Table 1: Implementation Plan

(Source: Created by Author)

References

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