Current International Strategy of ASI
All Scientific Instruments (ASI) has produced scientific instruments since 1975 and is a company based in the outskirts of Newburg, Ney York, United States of America. The Newburg plant of the company has almost 2000 workers but there are no unions in the plant. The policy of Best Practice HRM is followed by the HR department to avoid influence of the union. The corporate culture of ASI is strong and values and vision of the company are discussed with the workforce. The communication bulletins, marketing materials and the pay-slips of the company have the prints of the mission statement “Working for progress in the US” .The profit sharing and share-options schemes of ASI elicit commitment of the employees. The culture of performance management is strong in ASI and the appraisal system is structured highly and is connected to promotion and remuneration. The employees of ASI work in small teams and cellular modular feedback is offered to them with TQM approach. The employees of ASI are trained seriously about technical and people skills and team-working skills. The major export market of ASI is Europe and the boards of ASI took the decision to open subsidiaries first in Sweden followed by France. By 2015, the Swedish subsidiary of ASI employed 270 staffs by 2015. In the year 2004, a plant of ASI was set up in Arcachon, France with a current employee base of 200 staffs .The production and marketing arenas of ASI experienced steady growth however there are difficulties faced by ASI in human resource policies adopted overseas. It is important for ASI to create HRM strategy in alignment with global developmental strategy as well as these HRM strategies should solve problems faced by ASI in overseas subsidiaries. The global HRM policies and practices of ASI and its present international strategies require consideration. Also, a careful planning of policies of expatriation and repatriation is required (Jiang et al. 2012).
ASI uses expatriate managers extensively in technical as well as managerial arenas of the business to control its subsidiaries. The parent company plays a pivotal role in setting up the goals and production targets and the subsidiaries are not consulted while these targets are fixed. The feedback mechanism of ASI is backed by programs of training for all employees. The expatriate managers of ASI are instructed either to keep the unions out or to make sure that the unions have minimum influence on the subsidiaries. The magazines of the company published in the local language and staff bulletins help in the reinforcement of the strong culture of the ASI.
Changes required in the current international strategy of ASI
The current oversees Human Resource policies of ASI face some problems. The Human Resource practices which are followed by the ASI in the United States are not suitable for the host countries, the conditions in the subsidiaries are diverse and this is the problem that ASI is facing currently. The problems faced by ASI are centered around industrial relations, management styles, expatriate managers and the degree of control that is exerted by the parent company on subsidiaries. Barriers of communication are prevalent between the expatriates of ASI in America and the workforce in the subsidiary unit of ASI, even though senior managers of ASI in Sweden and France can converse excellently in English. The culture and the working practices of the parent company and the subsidiary are quite different.
Tom Smythe, the expatriate manger of ASI in Sweden gave the feedback that the subsidiary in Sweden was a start-up operation but the workforce joined unions, 65 % of the employees joined unions in Sweden by the completion of the first year and the number of unionized employees has rose steadily to 88 % till current date. The Swedes did not like the process of imposition of corporate culture of ASI through seminars and orientation sessions. They were of the opinion that these sessions wasted their time and only lip service was paid to these sessions. The performance management schemes were introduced by the corporate office of ASI and the workforce in Sweden did not comply with the targets set by the schemes. According to the law of Sweden and England, setting up of work councils is of paramount importance for the management and employees but the Americans resented these meetings and the Swedish unionists felt that Americans were non-cooperative.
Anthony Martinez who was the head of operations in France faced problem with the role of Trade Unions. The performance management schemes and the performance targets were baulked by workforce in France. It was suggested to implement working at weekends to complete emergency orders. There were many holidays in France and it seemed to be virtually impossible to make the workforce in France work for extra hours. The French workforce wanted to have a line manager who would be technically proficient and would direct the workforce to accomplish work tasks. The team-working feedback mechanism was lamented by the French workforce.
An online questionnaire was followed up by 6 focus groups to survey the experience and satisfaction of the expatriate managers in Gothenburg and Arachon. From this survey, it was found that 68% of the expatriates lived in the country for three years and were ready to stay for another two years because they were of the opinion that the headquarters of ASI did not have a satisfactory career-plan for expatriates. 88 % of the expatriate managers were of the opinion that they had to deal with situation in the host country without receiving adequate support from the headquarters of ASI. 46% of the expatriates faced conflicts in family as their partners did not want to settle in host countries and 79% of the expatriates planned to leave the host country if situation did not improve.
ASI has adopted an ethnocentric approach. The strong corporate culture of ASI is implemented in subsidiaries of Sweden and France to have powerful control on the subsidiaries. The organization needs to change this strong ethnocentric approach and adapt to the European culture of the subsidiaries (Armstrong and Taylor 2014).
- a) ASI should follow a participative approach in decision making. At present the organization sets the goals and targets for the subsidiaries without involving the local subsidiaries in this process of decision making. This process requires change because the workforce in Sweden and France are not ready to accept the unreasonable targets of the parent company. A participative and collaborative decision making approach will increase productivity in the subsidiaries (Armstrong and Taylor 2014).
- b) ASI should respect the culture of the subsidiaries in Sweden and France and should not impose the strong culture of the parent company through seminars, orientation programs, magazines published in local language and staff-bulletin. Instead, the organization should follow a culture in the subsidiaries that is a fine blend of the culture of the home and host countries (Armstrong and Taylor 2014).
- c) The communication barrier that exists between the workforce of the subsidiaries and the American expatriates should be removed. An open communication model should be developed in the subsidiaries (Purce 2014).
- d) A line-manager should be introduced in France. The French workforce will not prefer to work-overtime or during the weekends to meet production targets. Thus an experienced line manager will be able to set SMART objectives for the French workforce and guide the workforce to accomplish tasks within deadline without the necessity to work overtime (Chanlat 2013).
- e) ASI should comply with the laws of European Unions. It is important for ASI to cooperate in the meetings of work councils. The work councils protect the interests and concerns of the workforce.
- f) ASI should adopt a geocentric approach. By adopting a geocentric approach, the organization will be able to collaborate between the subsidiaries and the parent company effectively (Chanlat 2013 ).The geo-centric approach will avoid cultural bias of either the home or host country and by this approach resources can be utilized best worldwide to meet the objectives of ASI.
- ASI should adopt a transnational strategy. The transnational strategy will help the organization to be responsive towards the local culture of the subsidiaries as well as to have a global scope (Beardwell, Julie and Amanda Thompson 2014).By adopting a transnational strategy ASI can have a global vision and can implement this vision by customizing it to suit the local regions and markets of the subsidiaries.
- The Institutional Theory of Human Resource management also suggests that organization should focus on creating and sustaining legitimacy with prime stakeholders and should take into consideration the local circumstances(Hendry 2012).ASI should conduct a PESTEL analysis to understand the macro-environment of subsidiaries in Europe (Brewster and Hegewisch 2017).
The global assignment cycle is composed of steps like the strategic planning, selection, preparation, performance measurement and repatriation.
- The expatriation programme should be effectively managed by ASI. The expatriation program involves selection of the expatriates, training and development of the expatriates, compensation of the expatriates and retention of the repatriates (Bratton and Gold 2012). The three dimensions called self-dimensions, perception dimensions and relationship dimension of the expatriates manager should be developed. The self-dimension of the expatriate manager will help the manager to focus on his psychological well-being; the relationship dimension will help the expatriate manager to maintain strong relationship with the workforce of subsidiaries of ASI in France and Germany. The perception dimensions should be developed in the expatriate’s manager of ASI because this dimension will help them to effectively perceive the environment of the host country (Lee and Widener 2013).
- An appropriate selection procedure should be adopted for selection of expatriate managers of ESI. The skills that should be evaluated during the selection process of the expatriate manager are cultural intelligence, skills for adaptability and flexibility to adjust to the European culture, ability to communicate effectively in the host country, ability to build relationships and technical knowledge(Sparrow, Brewster and Chung 2016).
- The first step to better management of the expatriation process is strategic planning. The different roles that can be played by an expatriate manger are dominance and threat, networking and socialization (Storey 2014).
- A cross-cultural training program should be organized for the expatriate manager of ASI. In these training programs the mangers should be introduced to the cultural difference between the parent company in the United States and the subsidiaries in Europe. Training will enhance self-efficacy of the expatriate’s manager of ESI and facilitate cross-cultural adjustment. The cross-cultural adjustment is the degree of psychological comfort that will be displayed by an expatriate with different aspects of host culture, the framework for international adjustment suggests that expatriates have clarity about their roles in the host country and should receive organizational support during the process of expatriation. The organization support includes social support as well as logistical support during the expatriation process (Baruch, Altman and Tung 2016).
- The preparation of the expatriates for the expatriation program in European countries is of paramount importance for ASI. In this stage of preparation, job variables like nature of the job, the location of the host country, the goals and objectives of the international assignment as well as individual variables like interest level of the expatriate in the assignment should be considered
- The compensation and benefits of the expatriates of ASI for undertaking assignments in the European countries should be considered. The compensation should meet the marker standards of the European countries so that the expatriate manager of ASI can live comfortably in the host countries.
- For instance, P& G has introduced an effective assistance program for the expatriates which foster the cultural adjustment of the expatriates. The expatriates are introduced to the cultural difference between the home and host country, cultural trainings are provided to expatriates in P& G, personal factors of the expatriates like their family requirements during relocation are considered and P& G has developed an effective strategy for compensation and benefits of the expatriates. Global companies like IBM and Procter & Gamble also have introduced effective expatriation management program.
- Repatriation is an essential part of the expatriation program. The human resource department of the ASI should track the career path of the repatriates once they return to their home country. Repatriates gain valuable experience during their international assignments and often tend to leave the organization when they return to home country. Thus ASI should adopt effective retention strategy to retain the expatriate’s manger. A plan for reward and recognition of the valuable experience of the expatriates should be developed (Armstrong and Taylor 2014).
- The experience that the repatriates gain from international assignment should be utilized. For instance, the repatriate’s manager can be utilized in delivering cross-cultural training in the preparatory stage of the expatriate managers of ASI because they are already aware about the cultural values of subsidiaries of ASI in European countries. Also, often the repatriate’s managers feel alienated to the culture of the home country when they return after a long international assignment (Nery-Kjerfve and McLean 2012).An effective communication strategy should be developed by ASI to boost psychological loyalty in the repatriate’s managers.
- It can be recommended that a geocentric approach should be adopted by ASI instead of an ethnocentric approach. ASI can hire local line-managers in France and Sweden as well as employ expatriate managers. The managerial positions should be open to both home and host country and should be merit-based irrespective of nationality. The international human resource management team of ASI will be responsible for selection of these managers.
- It can be recommended that ASI should introduce a culture of transnational culture. A PESTEL analysis should be conducted by the expatriate managers for subsidiaries. The expatriate manager will be responsible to identify the cultural barriers between parent country and subsidiaries.
- After the selection of local managers, the expatriate managers of ASI from the USA and the local managers can develop an effective communication plan to overcome communication barriers with workforce of France and Sweden. The local managers will be aware about culture of their country and can provide valuable inputs to the communication plan.
- The goals and targets in the subsidiaries of ASI should be developed with participation of the workforce of the subsidiaries. The managers in the host country should set these targets along with inputs of workforce in France and Sweden.
- An effective expatriate management program should be developed by ASI. This program will prevent cultural shocks of the expatriate managers. The cultural training program should be conducted by repatriate managers of ASI who have already completed international assignments in the subsidiaries.
Conclusion
It can be concluded that the ASI is a successful organization in its home country, America. However the organization is facing challenges to operate in European countries. The cultural gap between the host country and the home country should be effectively managed by ASI. The organization can adopt a geo-centric approach to avoid cultural bias of either the home or host country. Also a transnational approach will help ASI to preserve a global scope as well as to stay locally responsive. An effective program for management of expatriation and repatriation should be adopted by ASI. The organization should focus on cross-cultural training of the expatriates and invest in expatriate management program. A suitable repatriation strategy will help ASI to retain repatriates when they return to home country.
Reference List
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Baruch, Y., Altman, Y. and Tung, R.L., 2016. Career mobility in a global era: advances in managing expatriation and repatriation. Academy of Management Annals, 10(1), pp.841-889.
Beardwell, Julie, and Amanda Thompson. Human resource management: a contemporary approach. Pearson Education, 2014.
Bratton, J. and Gold, J., 2012. Human resource management: theory and practice. Palgrave Macmillan.
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Lee, M.T. and Widener, S.K., 2013. Culture and management control systems in today’s high-performing firms. Management Accounting Quarterly.
Nery-Kjerfve, T. and McLean, G.N., 2012. Repatriation of expatriate employees, knowledge transfer, and organizational learning: What do we know?. European Journal of Training and Development, 36(6), pp.614-629.
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Sparrow, P., Brewster, C. and Chung, C., 2016. Globalizing human resource management. Routledge.
Storey, J., 2014. New Perspectives on Human Resource Management (Routledge Revivals). Routledge.
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