Novo Nordisk Case Study: Mexican Experience from a Danish Firm: “Changing” Mexican Culture

This report examines cultural and institutional factors of Mexico and how they can impact global HR management and practices. Specifically, by analyzing Mexican culture based on Hofstede’s dimensions, economy, labor legislation, union and employment tradition we reached the conclusion that the features of Mexican culture (high power distance, strong collectivism, high level of masculinity and uncertainty avoidance) and institutional factors have a strong impact on management styles and HR practices of business in Mexico and may arouse some challenges for global company and their expatriates, especially those from countries that bear different cultural features and institutional conditions. In order to minimize the potential conflict between Mexican local employees and expatriates, parent companies need to provide trainings (culture assimilation, country condition, etc.) before sending anybody to Mexico. Also, whether the expatriates should put more effort to disseminate home country (headquarter) culture or to adjust to local culture depends on the company’s strategy in terms of being localized or standardized around the globe.

It is hypothesized that cultural differences in behaviour will mean differences in HRM practices within different cultures but those within the same cultural cluster will be similar whereas those in different clusters will be dissimilar. Employees and managers from different cultures take decisions in different ways – the processes, behaviours and values are not the same. People have different value orientations as a result of individual psychology, life-stage and generation and assumptions about behaviour determined by cultures are linked to a variety of organisational behaviours.

The HRM policy of a firm is looked as a most important strength which needs to be taken care of all the time to have a competitive advantage within the industry they operating in. Multinational corporations (MNCs) seek to transfer their home-country human resource management (HRM) practices to their overseas subsidiary as to them it is just another approach towards globalisation. It can be an element of success for MNCs if they manage to transfer these HRM practices across their subsidiaries in an effective manner. An effective transition of these policies depends on the organisational, cultural, social and relational factors (Bartlett & Ghoshal 1998; Evans, Pucik & Barsoux 2002; Poedenphant 2002). The transition of these policies

They need to build integration among HR practices and strategies of its auxiliary firms in distinctive region with a specific end goal to accomplish general organizational targets. Then again, these associations additionally guarantee a critical level of adaptability in their IHRM procedure on the grounds that representatives from distinctive nations are sponsored by diverse cultures and social qualities. Adaptability impacts the workers' execution. Due to the strengths of globalization and the associations' interest to create and implement a worldwide methodology, International Human Resource Management (IHRM) is turning into an essential to accomplishment of the organizational. The essential distinction between domestic and global human resource administration is the knowledge and obligations

The role of HR in the present scenario has undergone a sea change and its focus is on evolving such functional strategies which enable successful implementation of the major corporate strategies. In a way, HR and corporate strategies function in alignment. Today, HR works towards facilitating and improving the performance of the employees by building a conductive work environment and providing maximum opportunities to

While there are many various global issues that affect the International Human Resource Management to run efficiently, there are two key concepts that play a major role in understanding how to approach them with cohesive and a well coherent strategy; they are the International Human Recourse Management Strategy and Understanding the Cultural Environment. In the International Resource Management strategy, many companies will do their research in finding companies that offer the

Business environment has changed dramatically in the past decade. Economic power is shifting from developed countries to emerging economies. To sustain business competitive advantage, firms are constantly looking for new opportunities. Countries like China, Brazil, and India have become the primary investment destinations today. However, many firms have failed in their business expansion to emerging market. Business is business; risks always come together with opportunities. The decision of choosing an appreciate entry mode strategy has a crucial role, and will decide fate of the global expansion. In this essay, I start with a simple introduction of emerging markets, and its attractiveness for foreign firms; it followed by the discussion

This has highlighted a crucial issue for international companies to be aware of the cross-cultural implications in the conception, design and implementation of the various market entry strategies for the Chinese markets, especially when considering the Human Resources Management strategies since Corporate Strategy will in turn determine the Human Resource (HR) strategy to be deployed.

1. Why is the HRM role so much more complex, and important in the international context? (Chapter Nine). Corporations operating overseas need to pay careful attention to this most critical resource, - one that also provides control over other resources. In fact, increasing recognition is being given to the role of Strategic Human Resource Management (SHRM) that is the two way role of HRM in both helping to determine strategy as well as to implement it. That role in helping the organization to develop the necessary capabilities to be able to enact the desired strategy includes the reality strategic plans are developed in large part based on the resources possessed by the firm, including the human

Companies like Tata Motors and similar industries from emerging countries often face many challenges at one phase, but there are various strategies they can use to compensate their disadvantages and rather gain the advantages from the developing markets and have a prospect to become a global force.

Managing HR in MNC is different from the way the HR is being managed in the country, According to Morgan (1986) there are three factors that differentiate between IHRM and domestic HR: First, the countries of operations such as the -country where a subsidiary may be located, the host-country where the subsidiaries are located, and other countries. Second, the different types of employee, in international environment the HR management have to deal with the host-country nationals (HCNs), expatriates or home-country nationals (PCNs) and third country nationals (TCNs), for example if L’Oreal hired an Indonesian employee in their Indonesian subsidiary the employee is a HCNs, and when manager from L’Oreal Headquarter in France came to work in Indonesian subsidiary the manager is a PCNs, and if L’Oreal employs manager neither from Indonesia nor France to work in their Indonesian subsidiary the manager is TCNs. Third, is the way HR practices (eg. staffing, compensation, training, and etc) are conducted. Although IHR practices seems to have the same activities as domestic HR, in IHR the manager will be dealing with different environment and diversity of employees from different cultural background. Moreover, as mentioned earlier dissimilarities between domestic and international HR management mostly due to profound differences between host and home countries in term of culture,

Briscoe D., Schuler R., Tarique I., (2011). Internatonal Human Resource Management : Policies and Practices for Multinational Entreprise.

International organisations differ in their strategy development practices and processes, based on their approach to internationalism as either ethnocentric, polycentric, geocentric or regiocentric. All are faced with market forces and changes within their sectors, dependant on the cultural and institutional drivers, prevalent in their operational country and in those of country of origin (Farndale & Paawe, 2007). At a global level, human resource (HR) practices are found to be similar in competitive contexts, whereby organisations benchmark practices and processes against similar organisations appearing to operate successful HR policies which are driven by best practice and technology availability, in areas such as: recruitment and selection, reward structures, performance management, succession planning, expatriate management and training and development. Notwithstanding this, competitive advantage is derived from differentiation of organisational culture, structure and strategy and combining leverage derived from human capital (Shen, 2011; Slocum, et al., 2014). The rapidly changing global arena has forced many organisations to adopt an increasingly dynamic approach to performing business by adapting their environment for flexibility, innovation, creativity or cost effectiveness, in order to manage constant changes to organisations in terms of technology, the ascendancy of knowledge workers, worker diversity and the need for constant improvement to meet changing customer

Before proceeding with an overview of current theories of SIHRM, it is important to distinguish between international human resource management (IHRM) and strategic international human resource management (SIHRM). In keeping with Schuler and colleagues ' (1993) and Lado and Wilson 's (1994) work, we define the MNCs IHRM system as the set of distinct activities, functions, and processes that are directed at attracting, developing, and maintaining an MNCs human resources. It is thus the aggregate of the various HRM systems used to manage people in the MNC, both at home and overseas. By including headquarters (HQs) in this definition, we recognize that the parent company can become simply another one of the units of the MNC (cf. Hedlund, 1986). Strategic Human Resource Management (SHRM), in contrast, is used to explicitly link HRM with the strategic management processes of the organization and to emphasize coordination or congruence among the various human resource management practices (Schuler & Jackson, 1987; Wright & McMahan, 1992). Thus, SIHRM is used to explicitly link IHRM

Multinational companies (MNCs) gradually more control the world’s markets, and are playing an essential role in the globalization of economic movement. In sequence, the need for develop new forms of trans-national management organization is very much necessary where MNCs manage their employees on an international standard and this is viewed as important to the achievement of globalizing strategies (Bartlett and Ghoshal, 1989). A considerable body of literature investigate that transfer of “best practice” in Multinational Companies have been made, dazzling the importance emotionally concerned to the effective management of people from corner to corner national boundaries for Multinational Companies performance (Hofstede, 1980, 1997; Bartlett and Ghoshal, 1989; Adler, 1986; Adler and Ghadar, 1990; Yuen and Kee, 1993; Guest et al., 1996; Ferner, 1997; Edwards and Ferner, 2000). HRM practice from the home country to abroad subsidiary may be hampered by constraints set by the culture and tradition of the host country (Jain et al., 1998). In compare to, home country variation are more likely to create complexity for the “reverse” distribution of practice back from foreign subsidiaries. For trans-national business organization trying to develop “global” best practice, national limitations could be resulting from both the home and host country (Ferner, 1997; Edwards, 1998; Edwards and Ferner, 2000; Zhang, 2001). Dissimilarity in national business systems has influence HRM practice