Essay: People Management to Strategic Human Resource

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People Management to Strategic Human Resource Management

The future of multinational corporations in global competitive market forces depends on the ability of global companies "to change and adapt their resources strategically to the nuances of the broadening global playing field. Business strategies, which organizations adopt to maintain competitiveness, should be developed in conjunction with their human resource departments." (Caligiuri and Stroh 1995 P1). Global enterprises are the companies having extensive oversea operations. Ability of a global company to achieve competitive market advantages depend on the extent the company has been able to strategically manage its global human resources. However, management of human resources (HR) on a global basis involves challenges that a global company must address to achieve global competitiveness. Inter-country differences have been the common challenges that global companies face when implementing the right policies with regard to HR management. Economic factors and labor costs of different countries also determine the type of HR resources practice to adopt. Getting the right skills regardless of the geographical location is very critical and dissemination of knowledge and innovation to enhance competitiveness of a company at overseas operations has been the challenges facing global companies when adopting human resources practice. In addition, global companies face challenges in identifying, developing and managing talents on the global basis. (Dessler, Cole, and Sutherland, 2011). Standardization of human resources has been identified as an effective tool to address challenges facing global companies when attempting to adopt effective human resources practice on a global basis.

The objective of this paper is to analyze and critically evaluate the HR practice to be standardized on a global basis for Toyota Motor Co. Ltd. (Toyota). The paper suggests Human Resources standardized skill set and competence on a global basis.

The rest of the paper is structured as follows:

The study suggests where different approach of standardization of HR would be suitable.

Moreover, the paper discusses the strategy the global policies can be implemented in each of the subsidiaries.

Finally, the study suggests the strategic advantages that the company should adopt.

Literatures Review

The study reviews the literatures to answer the following questions.

1. Which HR practices would you standardise on a global basis?

2. Where would you allow different approaches?

3. How would you ensure that global policies are implemented by each of the subsidiaries?

4. Would your suggestions achieve any strategic advantage for the company, and if so, how would this be demonstrated?

Which HR practices would you standardize on a global basis?

Standardization of human resources is critical for a global company that attempts to adopt HR practice on a global basis. HR practices practice to be standardized on a global basis is a standardized skill set and competence. Standardization of Human Resources (HR) is the process where human resources practice such as selection, incentive practice, training and the whole of HR function is transferred from the headquarter to all the units of a multination enterprises. This set of practice becomes standardized because firms will manage people in the same strategy with the practice being adopted at corporate headquarter. On the other words, standardization of HR is the management initiatives to transfer the HRM policies and practice to the company international operations with the belief that standardization policies will enhance best performances for the headquarters and the subsidiaries. Standardization of HR policies is critical to achieve competitive advantages, and many multinational enterprises implement standardized HR policies to attain competitive advantages. HR practice to be standardize on a global basis is to transfer the HR practice being adopted at the company headquarter to the company subsidiaries. This type of HR practice is referred to Standardization of Human Resources (HR) where the company implements the same HR resources practice being adopted at the headquarter at the company subsidiaries.

Dessler et al. (2011) argue that cultural differences are the major factor affecting selection of managers on the global basis. While it might be easier to select managers for an expatriate assignment, however, screening the manager to adapt to new environment may be challenging. Adaptability to new cultural orientation in a new country is very critical for the success of global operations. Couple with the difference in cultural orientation, labor, law and motivation may also be different from country to country. Formulation of human resources practice on the global basis is very critical to enhance the success of HR.

Chen & Wilson (2003) argue that standardization of human resources is an effective HR strategy on a global basis. Morgan and Liker (2006) reveal that Toyota success lies on the method the company manages team of engineering to enhance people development and growth within the organization. Training on-the- job is the type of HR standardization that Toyota employs on a global basis. The company employs standardized skill set and competence to enhance product development (PD). The standardized of skill set "enable development incredible development speed drives task variation out of the development process." (P 112). Toyota HR culture is to create high performing team and professional trust on a global basis. Typically, Toyota specially trains its line manager to enhance company output, and to achieve corporate objective. The company also uses its line manager to achieve HR advantages. (McGuire, Stoner and Mylona, 2008).

Dickmann (2008) points out fundamental success of Japanese firms are their capability to obtain zero defects, and first rate products. Japanese firms have been able to achieve this success because their HR practices are tailored with the "job flexibility, team work and cooperative relations between management and employee, and intensive on-the-job training" (Dickmann 2008, P 71), and many Japanese firms transfer the HR practice into their subsidiaries in North America. Toyota adopts this type of standardized process to demonstrate a leader in the production of vehicles. Toyota follows the headquarter process when hiring professional candidates for engineering position. After a lengthy selection process, Toyota only hires 1.1% of professional applicants, and once they are hired, engineers follow standard skill acquisition development process. The process focuses on the intensive mentoring for technical skill and competence to enhance technical and skill advancement. As being practice at the company corporate headquarters, engineers are expected to undergo on-the-job training for two years before being allowed to move to the first level engineer. Typically, Toyota incurs three or four-year investment on each engineer before being allowed to become a team contributor. An engineer is expected to spend between five and six years in the company before being considered first rate engineer. Toyota employs training on-the- job on a global basis to ensure that the personnel achieve rapid growth. The action plan to develop human resources consists of experience that enables personnel to develop technical skill set and development of talent within the organization.

The standardized HR practice being implemented by Toyota is to employ flexible capacity strategy whereby the company transfers skilled technician into the company subsidiaries to ramp quickly and become almost productive instantly. Typically, the technicians transferred from the company headquarter to work in the company subsidiaries have already been familiar with relevant standard and specialize by part.

Thus, "they are able to checklist, master cross section, and standard locator to the design space, which is provided by the surface scans from the clay and K4 body structure drawing, to produce final designs that reflect the new styling and performances intent of the new program." (Morgan and Liker, 2006 P. 104).

Standardization of HR practice is critical to firms because it enhances high level of interdependence among various units of Multinational Corporation. High level of standardization occurs when subsidiaries highly depend on the headquarters for the supply of raw materials. To enhance organizational profit maximization, company often implements management practice for the subsidiaries similar to what is being practice at the corporate headquarter. With the significant position held by the corporate headquarter, the HRM approach needs to be tailored to the management decision to achieve strategic competitive advantages.

In addition, the standardization of HR resources is critical to ensure that firm is able to maintain consistence as well as enhancing internal equity in employee management. This is very important when firms intend to coordinate and control different subunits to achieve innovation and expertise among different subunits. McGuire, et al. (2008) argues that line manager contributes to the coordination of different subunits within an organization. A line manager plays a central role in the management of HR personnel, and the greater involvement of line manager in personnel functions is to perform the role of coach, leader or conductor to achieve high performances. Typically, global firms are now using line managers on a global basis to implement international HR functions. Although, the critics argues that involvement of line manager in the HR practice may devalue the importance of HR. (DeJong Leenders and Thijssen 1999).

On the other hand, Chen & Wilson (2003) point out that the main driver for the implementation of standardized HR is management believe that the HR practice in the headquarter is superior and it is critical to extend the same HR… [END OF PREVIEW]

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