Savannah Engineering: Global approach in HR
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With significant operations around the world, Savannah Engineering, Inspection, and Insurance Company (SEIIC) is truly a global company. Its most significant international operations are in the European Union (EU) countries and Asia. Growth in China has been particularly rapid over the last five years. Because of the highly technical nature of its business, SEIIC has had a difficult time getting the people with the right skills in the right places and then keeping their skills up to date. The company has worked hard at identifying and hiring local talent, but the efforts have not been entirely successful. To the extent that it can, it has tried to accommodate local needs in its HRM system. However, it has found it difficult to carry out some of its initiatives because of the different ways of working in different areas. It has been difficult for people who transfer from one area to another to deal with the different HRM policies and procedures.
As a part of the overall review of HRM operations, the company is interested in identifying key factors that differentiate its global and domestic operations and in understanding how it can develop a more global approach to HRM.
With a focus primarily on the EU and Asian areas of operations, identify key factors that SEIIC should pay attention to in revising its approach to HRM. Consider, for example, the cultural, economic system, and legal and labor relations differences, in these areas of operation.
(1) Analyze, identify and discuss at least one factor in each of the areas of cultural, economic system and legal and labor relations differences for EU and Asia.
(2) Analyze and discuss how the differences may affect specific HRM activities such as recruiting and staffing, training and development, compensation, performance management, and labor relations.
(3) Analyze the advantages and disadvantages of each approach
(4) Analyze and make a recommendation on whether SEIIC should have a uniform approach to HRM around the globe or a
multiregional/local approach.
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Solution Summary
The solution discusses the following for SEIIC (Savannah Engineering Inspection and Insurance Company
1) Analyze, identify and discuss at least one factor in each of the areas of cultural, economic system and legal and labor relations differences for EU and Asia.
(2) Analyze and discuss how the differences may affect specific HRM activities such as recruiting and staffing, training and development, compensation, performance management, and labor relations.
(3) Analyze the advantages and disadvantages of each approach
(4) Analyze and make a recommendation on whether SEIIC should have a uniform approach to HRM around the globe or a
multiregional/local approach.
Solution Preview
(1) Analyze, identify and discuss at least one factor in each of the areas of cultural, economic system and legal and labor relations differences for EU and Asia.
Cultural
The United States have some of the strictest labor laws of any country in the world. The laws protect the workers and businesses alike. When foreign businesses practice the United States, they are bound to the laws of the land. This is the same when an American company, such as SEIIC, opens a business operation in a foreign country.
In regards to SEIIC expanding to the EU or Asia, the laws are lax and strict, depending on the issue. In the EU most workers are entitled to six weeks vacation and in Sweden, maternity leave laws entitle the mother 16 months of paid maternity leave. (USA Today 2007) Asia also has paid maternity leave, but the maximum for this region is four months.
SEIIC must look at these figures prior to opening an operation in these lands. The paid maternity leave factor is significant and could cost the business in the hundreds of thousands in lost revenues as it will be paying an employee to stay home for an extended period of time with full job guarantee.
These cultures believe in nurturing, whereas the American culture believes in profits.
Government
The governments are vast in differences. The EU is more of a democracy and Asian has many republics. When the governments are part of a Republic, even though laws are on the books, they are often not enforced, making business practices questionable.
Many companies do have operations in Asia, but the workers are paid low, the service is poor and many times, environmental laws are broken because ramification lacks.
Let's look at the recent Coca Cola fiasco in the SE Asian country of India. With economies such as India's, the country's leaders are generally lax and they open their arms too quickly to American companies to earn the golden tax dollars. The greed of the tax dollar puts its own citizens in harm's way.
If the facts prove that prior to Coca Cola opening a plant that the land was fruitful, it becomes apparent that the Coca Cola plant is damaging to the environment. Whether the ...
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