The European Building Materials Company (EBMC) utilizes a highly decentralized human resource approach. As such, the decision-making authority is moved to the lower tiers of the organization leaving very little to the small human resource staff at the head quarter. However, the organization should consider changing the approach to a centralized one. This would mean that most of the decisions would be made by the higher level of the organization’s hierarchy and as a result the organization would enjoy various improvements which include:
Uniformity
The centralized approach of management will bring uniformity in the company’s way of conducting business. This is because there are fewer centers of power unlike in the decentralized approach
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This involves all the subsidiaries and branches applying marketing strategies coming directly from the senior members of staff. With a harmonized marketing strategy the organization would be able to give a harmonized marketing message to the consumer. For instance, when the European Building Material Company markets their products in different regions, the marketing strategy needs to be one so as to avoid contradiction and thus confusing the consumer (Adam, 2007).
Polycentric staffing approach
The European Building Material Company tends to favor a polycentric staffing approach with high utilization of host country nationals. Thus, the organization treats each subsidiary as a separate national entity with a big percentage of individual decision making authority and permission to hire the host country nationals as managers. This is practiced because the managers have the capability to translate the foreign guide programs to be compatible with the culture of their employees. But here are some disadvantages of polycentric approach as discussed below.
Career mobility The organization’s practice of polycentricism leads to immobility of career from one region to another. This is because the policy insists on hiring the host country’s national thus the employees have a little chance of being promoted to another subsidiary in a different region. As a result the employees are less motivated or go to
Competing in global markets entail many factors and centralization of its human resource practices is certainly vital to improve global competitiveness and empower employees for global assignments. To achieve success in global marketplace, the challenge of all businesses regardless of their size is to understand global corporate cultural differences and invest in human resources which includes selecting and retaining talented employee, training and development whilst encouraging employees to be innovative and creative. Employees selected to work in foreign locations should be prepared beforehand with adequate cross-cultural training. For an organization to be successful in the international marketplace, it must be concerned with this fit from both an internal and
The assumption underlying this argument is that such adoption generally entails the replacement of traditional practices. One key way to be successful in a hyper competitive environment is to use new organizational practices to assist flexibility and responsiveness, this can be achieved through decentralization of the organization. The support for this statement can be found in many business journals, for example Bartlett and Ghoshal (1993) argue that the classic authoritarian “strategy-structure-systems management doctrine is fast becoming irrelevant” and is unsuited to the new “postindustrial environment” and centralization with its emphasis on hierarchy, central decision-making and lack of discretion is replaced by flat, decentralized structures.
In addition, it is essential to generate detailed divisions for merchandise progress and industrial can have an effect on the company’s administrative structure known as product evolution. Centralized management retains all major decisions with one detailed decision-making group, whereas decentralized management lets company managers to have more ‘say’ in the executive process. Next, corporations that participate in the mass production of products may not exert as
Economic Factors: Economic factors play a vital role when MNEs are recruiting. A research by the Intl. J of human resource management noted that some MNEs adopted the polycentric staffing approach based on the fact that it costs less to employ HCN (Home country
b. It allows the company to integrate scale-efficient operations and to cross-subsidize subsidiaries when necessary.
There are two major objectives of decentralization which are to respond more effectively to external and internal change, and cut overhead costs and raise productivity by reducing the number of staff. This concept once achieved can implement the necessity for breaking down hierarchies and assist in downsizing.
Other common terms for the idea of organizational decentralization include: team self-management, self-management, shared control, distributed leadership (Lambe, Webb, & Ishida, 2009) and holacracy (Robertson, 2007). While these terms may have small differences they all describe the common theme of distributing power across organizations. Several concepts help to explain why decentralization and the encouragement of teamwork throughout an organization are often superior to traditional management structure.
The appropriate staffing strategy is to rely on country and company characteristics, perceived needs and staffing outlook. They need to invest in training the employees or contract a company to train their employees in order to build a strong human resource department. The reason for this is because a lot of the expatriates will be working for the company and this is part of their culture and they know how to run the airlines. Human resource department and upper management need to know and understand the tradition, legal and political regulations of the organization in selecting the best employees. With this way, there will be no problems for them adapting to the new culture and the cost connected with expatriates compensations cost will not be enormous. The polycentric approach for Arik Airlines is that they will be able to better guide the company on local market conditions, politics, laws and culture at each foreign location. It also provides for sound training for host country nationals and thereby opening greater possibilities for career advancement (Steers & Nardon, 2005). It can also create major coordination problems for headquarters based on language, cultural and loyalty differences. Polycentric can reduce adjustment problems of the home country national managers that are sent from home office since there will be less managers taking jobs overseas. Like the ethnocentric, this approach may limit career advancements for host country nationals because the company may believe that they are needed in home country nationals. Third country national staffing is the ability of a candidate to represent the company’s interest and transfer corporate technology and competencies. The USA or the host country may not have the best
Marketing strategy is a method of focusing an organization's energies and resources on a course of action which can lead to increased sales and dominance of a targeted market niche. A marketing strategy combines product development, promotion, distribution, pricing, relationship management and other elements; identifies the firm's marketing goals, and explains how they will be achieved, ideally within a stated timeframe. Marketing strategy determines the choice of target market segments, positioning, marketing mix, and allocation of resources. It is most effective when it is an integral component of overall firm strategy, defining how the organization will successfully engage customers, prospects, and competitors in
Every organization needs to have a marketing strategy so that they know who are their competitors, which market they need to target, do they have resources to compete in that market and what strategies they need to adopt to gain competitive position in the industry. The most important thing is with the help of marketing, company is able to make people aware of its product.
The starts with some historical background about Capgemini as Europe’s largest IT software and service group and its growth since establishment in 1967from a local company in France into a transnational organization that has 20 employees in seven different countries. In addition to providing information about the stages of its growth and international expansion over the years, the case tells more about how Capgemini deals with different business aspects and activities related to its strategy as a transnational organization. Also, the case highlights that a subnational part of challenges facing the company is related to HR management. Based on the information provided its strategy and operations, Capgemini has characteristics of an ideal transitional organization, as described in the textbook. For example, Capgemini adopts a decentralized approach for managing its branches. It allows the branches to choose policies and strategies that will help to meet the variation of local demands in the best way to as long any branch personnel reaches 150 employees.
Face to those options and wide resource, the managers in global enterprises have particular concern about the employees’ ability to disseminate knowledge and innovation throughout their global operations . The use of expatriates has seemed to be a logical choice for staffing, while the use of parent-country nations seems to be most appropriate in some specific situation . Some other global enterprises also prefer integrate the expatriates and local human resource. Nevertheless, each procedure has both advantage and disadvantage.
In a centralized organizational structure one individual is responsible for making all the decisions and maintains control of the company by giving direction. While Decentralized organizational structures often rely on several persons with the authority to make final decision for the company’s well being. Some benefits associated with a centralized organization are as follows: Reduction in cost in the work environment, having a focused vision on one common goal and Reduction in conflict. A Few drawbacks of a centralized organization include, No secrecy because all ideas and decisions are conveyed to all, No special attention and Delay in work. Advantages associated with Decentralization are; Huge relief is provided off the top managers, Greater use is made of employees skills and Decision making is left up to educational and well informed people.
The marketing strategy should be tailored around the firm's target market; if this were not the case marketing would be then less successful. Each aspect of the marketing mix would need to be formulated with the target market (consumer) in mind. For example the design of the product would need to be such that it would satisfy the consumer's needs. If it did not consumers would see no need to have it and buy a competitor's product. The price of
A Term Paper Presented to the Faculty of European University In Partial Fulfillment of The Requirements for Human Resource Management