ms-29 july december 2016 solved assignment
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Solved Assignment July Dec 2016 MS-29 (Sample Copy)
Course Code MS - 29 Course Title International Human Resource Management Assignment Code MS-29/TMA/SEM - II/2016 Assignment Coverage All Blocks
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1) Enumerate different approaches to organisational structures in MNCs. Discuss different modes of operation in MNCs citing suitable examples.
Approaches to organisational structures in MNCs-
(1)Product ---------------------------- structure Advantage:-
The product ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ for firms producing multiple products.
It will result in fast ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- in rapidly changing environment.
Responsibility and --------------------------------------------------------------------------------- are clearly fixed.
Disadvantage:-
One of the major --------------------------------------------------------------------------------------- and various department. Some decisions like pay, -------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------- inconsistent between departments. Inter- departments ---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------- of common and overhead expenses etc.
2) Geographical ----------------------------------- structure
Advantage:-
Products and ------------------------------------------------------------ of specific geographical regions. A ---------------------------------------------------------------------------------- of different international area. This organisation ---------------------------------------------------------------------------------- legal systems. It also ----------------------------------------------------------------------------------------------- or losses.
Disadvantage:-
There ----------------------------------------------------------------------------- facilities. Co-ordination ------------------------------------------------------------------------------ be difficult. There would be a ------------------------------------------------------------------------- and diversity. It is difficult ---------------------------------------------------------------------------------- of reputation. This structure adds ------------------------------------------------------------------------------- geographic units.
(3)Decentralised business divisions
Advantage:-
Diversification --------------------------------------------------- and responsibility to a manger at each business unit. Each business unit ---------------------------------------------------------------------------------------------------------------------
------------------------------------ that is delegated with authority to formulate and execute business strategies. Each business unit is ------------------------------------------------------------------------------------------------------------------
--------------------------------------- depending upon strategy, key activities and operating requirements.
Disadvantage:-
The major problem of ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- related activities across business units.
General manger in charge of each --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- task.
(4)Strategic business units Advantage:-
This structure -----------------------------------------------------------------------------------, markets and technologies. It allows strategic ----------------------------------------------------------------------------------------------- total enterprise. It helps to allocate ------------------------------------------------------------------------------------- opportunities. Business units ------------------------------------------------------------------------------------- relevant method.
Disadvantage:-
Corporate ------------------------------------------------------------------------------------ from the division. Conflicts between/among ------------------------------------------------------------------------ can become dysfunctional. Corporate -------------------------------------------------------------------------------------- in this structure.
(5)Matrix Organisation structure The matrix structure ------------------------------------------------------------------------------------------------------------------------------------------------- uses permanent cross‐functional teams to integrate functional expertise with a divisional focus. Employees in a matrix ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------allows technical and general management training across functional areas as well.
Advantage:-
Give ----------------------------------------------------------------------------- priority. Create ------------------------------------------------------------------------------------------points. Facilities capture of functionality based strategies fits in diversified companies. Promoters ------------------------------------------------------------------------------- the organisation as a whole”.
Disadvantage:- Very ----------------------------------------------------------- to mange Hard to ----------------------------------------------------------------------------- lines of authority It is hard to ------------------------------------------------------------------------- from many other people. Violates --------------------------------------------------------- command.
6) Virtual ------------------------------------------------
Advantage:-
These structures ------------------------------------------------------------------------------- and less inputs.
These ----------------------------------------------------------------------------------- of operations.
These -------------------------------------------------------------------------------- effectively.
These ------------------------------------------------------------------------- industries.
Disadvantage:-
Companies ------------------------------------------------------------------------------- in their operations.
Organizations ----------------------------------------------------------------------------- outsourcing.
Failure ---------------------------------------------------------------------------------- entire organisation.
Modes of operation in MNCs citing suitable examples-
The subsidiaries and headquarters of MNCs are linked by a common vision and mission. MNCs prefer to relocate their operations in various based on low wage rates, -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------resources, information, patents, trademarks etc. The subsidiaries of MNCs should respond to the significant environmental forces of both home country and host country.
Multinational companies don’t just sell in foreign markets; they’ve taken the plunge to situate operations in far-flung locales. It’s a serious undertaking, since the complexities ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------that simultaneously organizes work and personnel along three lines: geography, functional activities such as marketing, and product or service.
Organizational structure refers to the way ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------. It is these decisions that determine the organizational operation modes. They are as follows-
Export Only
Once a company embraces an international vision, ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------coordinates with different product divisions on production and marketing. International -------------------------------------------------
As a company’s activity grows in a foreign ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------respond to the geographical conditions and challenges. Global -------------------------------------------
Ultimately, with growth and maturity, ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------. The multinational accomplishes this by dividing its structure into broad groups. Groups form according to product or territory. Groups
For multinationals with a wide range of ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------and the biggest differences in operations lie in locale, grouping by area first makes more sense. Geographical divisions operate beneath the CEO, subdivided by product and then function. Managers must make choices about how ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------structures. For example, the organizational design trend today incorporates a minimum of bureaucratic features and displays more features of the organic design with a decentralized authority structure, fewer rules and procedures, and so on.
Example-
General Motors Company, commonly known as GM, is ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------company purchased the majority of the assets of "old GM", including the name "General Motors".
General Motors produces vehicles in 37 countries under twelve brands: Chevrolet, Buick, GMC, Cadillac, Holden, HSV, Opel, Vauxhall, Wuling, Baojun, Jie Fang, and Ravon.
In addition to its twelve brands, General Motors also holds a ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------.General Motors is divided into five business segments: GM North America (GMNA), Opel Group, GM International Operations (GMIO), GM South America(GMSA), and GM Financial.
General Motors led global ------------------------------------------------------------------ other automaker, and is currently among the world's largest automakers by vehicle unit sales.
General Motors acts in most ------------------------------------------------------------------------------------------------------------------------- through 10 joint ventures. GM's OnStarsubsidiary provides vehicle safety, security and information services.
In 2009, General Motors shed ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------made an initial public offering that was one of the world's top five largest IPOs to date, and returned to profitability later that year.
In March 2016, General Motors bought Cruise Automation, a San Francisco self-driving vehicle start-up, to develop self-driving cars that could be used in ride-sharing fleets.
Based on global sales, General ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------the world. In 2009, General Motors sold 6.5 million cars and trucks globally; in 2010, it sold 8.4 million.
As of 2016, Mary Barra is the chief executive officer (CEO) and chairman of the board and Daniel Ammann is the president. The -------------------------------------------------------------------------------------------------------------------------------------------------- design organization, and as of 2014 the highest ranking African American in the US motor industry.
2) What are different approaches to staffing function in MNCs. Describe different staffing methods adopted by MNCs with the help of relevant organisational examples
Approaches to staffing function in MNCs
Staffing is an important aspect of HRM. The staffing policies of MNCs are determined by their approach to globalization. MNCs with an ethnocentric approach fill all top management positions with home country nationals to ensure that home country practices are replicated in subsidiaries. ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------. The selection, training, period of stay abroad, compensation and repatriation of expatriates are delicate issues that have to be managed by the HR department. On their repatriation, they must be provided suitable challenging assignments that give them the autonomy they have become accustomed to. Since maintaining expatriate managers is expensive, a company must develop local talent.
Companies can apply one of the three different approaches to managing and staffing their subsidiaries.
1. ----------------------------- The home country practice prevails with this approach. Headquarters from the home country
makes key decisions, --------------------------------------------------------------------------------------------------------- follow the
home country resource management practice.
2. Polycentric. Each subsidiary -------------------------------------------------------------------------------------------------------------
----------- local knowledge. Subsidiaries usually develop human resource management practices locally.
3. Geocentric -------------------------. The company that applies the global integrated business strategy manages and staffs
employees on a global basis. For example, Electrolux -------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------------------------
-----. These people constitute a mobile base of managers who are used in a variety of facilities as the need arises.
In the ethnocentric ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------develop practices and hold key positions in the subsidiaries to ensure consistency.
Advantages Disadvantages Lower -------------------------- costs ------------------------------------ citizenry Increases ------------------------- the local community --------------------------------------------------- available
in the local environment Leads to ------------------------------------------ a
legitimate participant in the local economy -------------------------------------------------------------
and constraints in the decision-making process
Makes it ------------------------------------------------------------------------ and global priorities
Leads to ----------------------------------------------------------------------, when they are more difficult, costly, and painful than they would have been if implemented earlier
May ----------------------------------- personnel May reduce -------------------------------------------------
----------------- by headquarters
Figure 1. Advantages and ---------------------------------------------------------- to staff international subsidiaries
Advantages Disadvantages ---------------------------------- ensures transfer of
business/management practices Permits ---------------------------------------------------- of
international subsidiaries Gives ---------------------------------------------------------
- through experience at parent company Establishes a ------------------------------------------------
----------------------------------------- executives
Creates ------------------------------------------------------ foreign environment and culture
Increases ------------------------------- subsidiary May --------------------------------------- costs May ---------------------------------------- problems Leads -------------------------------------- rate Has disincentive --------------------------------------------
------ and motivation May be subject ----------------------- restrictions
Figure 2. Advantages and ---------------------------------------------------------------- staff international subsidiaries
The polycentric approach is in direct ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------practices. Manager selection is based on competency rather than nationality.
As Figures 1 and 2 show, there are both advantages and disadvantages to using local nationals and expatriates in foreign
subsidiaries. Most companies use expatriates only for -------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------percentage of the work force be local citizens, with exceptions usually made for upper management. Staffing methods adopted by MNCs-
Recruitment & Selection is the process that ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------dissatisfaction and loosing the business relationship. Therefore,
Recruitment is defined as ------------------------------------------------------------------------------------------------------------------------------- quality so that the organization can select the most appropriate people to fill its job need.
---------------------------------------------------------------------------- and deciding who should be employed in particular job.
Types of International -------------------------------------:
Short term – up to --------------------------------
Extended - ---------------------------------------- year
Long term – -------------------------------------------
Commuter Assignment – Person lives in ------------------------------------------- and go by weekly or biweekly basis.
Rotational Assignment - Used --------------------------------------------- rigs
Contractual Assignment – Depends --------------------------------------------------- project.
Virtual Assignment – Where the employee does not relocate to a host location but manages, from home – base, international responsibilities for a part of the organization in another country
Selection Procedures of Expatriates:
In view of the direct and indirect costs of ------------------------------------------------------------ assignment, MNCs spend considerable time and effort in screening employees and their families before selecting them for foreign postings.
However, the criteria and the selection procedures ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------considerations, or for situational factors.
However, after an extensive review of literatures ------------------------------------------------------------------------------------------------------------------------- 18 variables and grouped them into four categories:
Technical --------------------------------------------- --------------------------------------------- Skills Ability ------------------------------------------ and
Family Situation In general the factors involved in expatriate selection are as follows:
Expatriate Selection - Example
Western European and ----------------------------------------------------------------- ability to acclimate
North ---------------------------------------------------------------------------- on technical competence
Behaviors ----------------------------------------------------------------- work abroad
Previous ---------------------------------------------------------------------------- future success
Selection techniques of expatriates:
Global companies require the human resources adaptable not only to the job and organizational requirements, but also to the cultural requirements of -------------------------------------------------------------- of domestic jobs. These techniques include:
Interview – structured -------------------------------------------------------- The monitoring and targeting of disadvantaged group – (-------------------------------------------------------------------
------------------------------ and values that are not covered by the law) Psychological Testing- ------------------------------------------------------------------------------ Assessment centre – ---------------------------------------------------------------------
Selection ------------------------------------------------ steps are:
Screening the ---------------------------------------------------------------------------------------------------- other than one’s own, previous overseas travel, knowledge of foreign language and overall Performance.
Testing the ---------------------------------------------------------------------------environment. Testing the ability of the ---------------------------------------------------------------------------- and environment. Predicting ---------------------------------------------------------------------------------------- candidate. Testing ---------------------------------------------------------------------------------- host nationals.
Job duties and responsibilities
Therefore expatriate must meet 6 basic criteria:
They ----------------------------------------------------------------------------- go overseas They ---------------------------------------------------------------------------- the job They ------------------------------------------------------------------------------- They ---------------------------------------------------------------------------------------- relationship They ----------------------------------------------------------------------- ability and They must have supportive families
Example- (Global Staffing)
Motorola India, for example provides ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------eligible to avail this benefits.
Conclusion:
Staffing of the international organization is ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------, searching for recruitment sources, background checks, dual career couples and outsourcing.
3) Compare and contrast leadership style followed in Japanese and French firms citing suitable examples.
Leadership style followed in Japanese Firms-
The rapid economic development of Asia in recent decades is one of the most important events in history. This development continues today and there is every reason to anticipate that it will continue indefinitely unless derailed by possible but unlikely international conflicts. At the core ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------as a very important matter.
Many organizations use regulations and laws to lead their staff to perform tasks and some of them emphasize cultural norms and values as the mechanism of dominance on staff. In Japan, if there are laws and regulations, norm orientation is dominant
on legalism. According to some researches, functionality of Japanese staff is controlled by their own colleagues in the working groups.
Japanese worker doesn’t kick the bucket ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------they rely on others’ kindness and enjoy this kindness.
Two other cultural values having influence on ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------standards force everyone to assume liability in the others
Value-based model of leader and follower relation in Japan is based on kindness and friendship. One of the Japanese sociologists believes that the basis of Japanese society is the relation between two persons in high and low position. This relationship resembles the relationship between parents and child which is called ‘Oyaboon’ and ‘Kerboon’.
Japanese managers spend more time ----------------------------------------------------------------------------------------------------------------------------------------- more to support their superior managers than the American and Indian managers do.
Generally, major characteristics of Japanese leaders including ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ standards are still remained fixed. We can summarize leadership specifications in Japan in comparison with other countries as follows:
1. Japanese leaders compared with leaders of other societies have less power of control because they are expected to have warm and good ------------------------------------------------------- due to their own attitudes and decisions, to an extent.
2. Fidelity of the inferior to ---------------------------------------------------------------------------------------------- should allow inferior to express this fidelity and it is expected that leader rely on his followers to remove his weak points.
3. Leaders should try to ------------------------------------------------------------------------------- among their followers.
4. The highest efficiency of --------------------------------------------------------------------------------------------- their attentions.
Other major specifications of ------------------------------------------------------------------------------------------------------------------------------- and employee, system of promotion on the basis of superiority, group assessment and group bonus.
The Japanese identify strongly with their work groups and avoid confrontation and conflict. They cooperate with their coworkers in every way they can to ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------to an organization, the participative leadership approach would be the most effective style of leadership.
Directive and supportive leadership style is acceptable ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------the loyalty to the company, rewarding can have more influence rather than punishing system.
Examples of Japanese firms which follow Japanese leadership styles-
There are three motor companies in the ---------------------------------------------------------------------------------------------------------------------------------------------------------- due to the weak yen. In fact, their US sales increased 15.6% in January 2015 and have continued to rise throughout the first quarter.
NTT is the king of Japanese ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ percent as of April 2014.
Some others are as follows-
S.N. Company Type of Industry Sales ($bil)
Profits ($bil) Assets ($bil)
Mkt Value ($bil)
1 Toyota Motor Auto ---------------------------- $255.6 ------- $385.5 ---------
2 Mitsubishi UFJ Financial
Major Banks $48.6 $11.3 $2,458.9 $77.7
3 -------------------- Financial
----------------- $46.2 $9.7 $1,494.7 $58.6
4 Nippon Telegraph & Tel
---------------------------------- $110.7 $5.7 $189.3 $61
5 Honda ---------- Auto & Truck Manufacturers $117.7 $4.9 $147.9 $63
6 Softbank Telecommunications Services $55.6 $5.8 $156.6 $91.2
7 -------------------- Major Banks $28.5 $7.5 $1,791.6 $48.7
8 Nissan Motor ---------------------------- $104 $3.9 ----------- $40.2
9 Mitsubishi Corp Trading Companies $74.8 $4.4 $146.5 $30.5
10 Hitachi Electronics $95.7 $2.6 $104.7 $36.2
Leadership style followed in French Firms-
In recent years, France has forged --------------------------------------------------------------------------------------------------------------------------------------------------------- in approach are not surprising when we look at the differences in leadership style.
French are the least likely of all European managers to --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------of will and respect for validity of authority.
Managers of the organizations have full power of decisions making and control on the organization. Managers believe that they have gained their position as a result of -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------, mightiness, superiors’ expectation of inferiors, respect for the superiors are evident specifications of French organizations.
In France, participatory methods in decision ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------, operating with a good deal of energy, intensity, and emotional expression. The French manager will be found in the center of the action.
The French are more understated and subdued. Where the French manager would project warmth and acceptance, the German would tend to maintain distance and be -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- European managers, the French are the least comfortable in the management position, placing less emphasis on taking charge and more emphasis on seeking the advice of others, creating and valuing close supportive relationships.
The French bring what they would see to be their -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------, with a focus on the big picture and looking at wider issues facing the organization before dealing with issues related to their staff.
Examples of French firms which follow French leadership styles-
Country Rank ------------------- Global Rank City ----------------------------
1 ----------- 11 --------------- 231,580
2 AXA 25 Paris 142,712
3 ------------ 30 ---------- -----------------
4 GDF Suez 33 Courbevoie 126,077
5 Carrefour 39 Boulogne-Billancourt 121,734
6 --------------- 58 -------------- ----------------
7 Societe Generale 67 Paris 98,464
8 ------------------- --------- Paris -----------
9 Peugeot 85 Paris 83,305
10 Groupe BPCE 103 Paris 75,082
Japanese Leadership Style vs. French Leadership Style-
Japanese ----------------- -------------------------------
Japanese businesses are more likely to have a bottom-up -------------------------------------------------------------
Top executives may harness substantial power, but new ideas -------------------------------------------------------------------------------------------------------------------------------------------------- and are put in place when they gain enough support.
This process involves -------------------------------------------------- and amended by various departments as it makes its way up the leadership chain.
France’s -------------------------------------------------------------------------------------------------- says this may not be particularly evident at first glance.
CEOs often have skills -------------------------------------------------------------, accounting and personnel – shifting gears as and when required.
Due to this comprehensive coverage, management blunders are --------------------------------------------------------------------------------------------------------------------------------------------- number of decisions across many departments.
4) Explain the role of HR managers in mergers and acquisitions in international perspective. Discuss the issues and concerns arising out of these citing examples.
Mergers and acquisitions (M&As) have become the dominant mode of growth for firms seeking competitive advantage in an increasingly complex and global business economy. Nevertheless, M&As are beset by numerous problems, with 50 per cent of domestic acquisitions – and 70 per cent of cross-border acquisitions .
In any merger or acquisition, one of ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------merger. That would be a big mistake.
HR has so many different and critical roles during --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------. Let's look at a sampling of new roles to be played by HR during a merger. These are over and above the normal listing of roles that keep all HR staff hopping in steady state times.
“Not many HR professionals have ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------what is really critical at different stages of the transaction.”
Here, according to Dixon, are some of the most important considerations HR directors need to bear in mind when working with M&A deals:
HR should be involved at the very early stages of --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------got to consider hidden liabilities such as pension costs and benefits.”
Considering how you’ll retain --------------------------------------------------------------------------------------------------------------- particularly the case in certain sectors where you’re really buying people’s skills,” says Dixon.
Devise a -------------------------------------------------------------------------------------------- the businesses.
Consider how the subtleties of the two companies’ cultures will mesh. “Not ------------------------------------------------------------------------------------------------------------------------------------ if you’re an international business.”
Don’t neglect your core business’s ongoing HR --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------that the business as usual tends to slip by the wayside,” warns Dixon.
Success of merger and acquisitions depends on the people who drive the business, their ability to drive, lead, and formulate strategy, execution and implementation. It is very important to involve HR professionals in merger & acquisition as it involves people and has an impact on key people issues. HR professionals play an active role in the change process by offering their interventions to help ensure a successful merger and acquisition.
Company -------------------------------- Human resources help determine if the cultures of the two companies that are becoming one through a merger or acquisition are compatible. Human resources must have a ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------; the management styles of the two organizations; and the overall attitude of the employees and managers toward business functions and the industry in which they work.
Benefits Problems During the due diligence portion of a merger ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------to continue offering.
Employee ------------------- People often fear change, and a merger or acquisition ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------about layoffs, office relocation or other changes employees fear, giving feedback to management about employee concerns.
Changing --------------------------- Structure When one company merges with or acquires another, ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------in the
organization. Human resources may work with management and employees to alter the job descriptions of various positions, ensuring everyone understands his role in the newly altered organization.
Advocating ---------------------------- during all negotiations The process leading up to a merger can ---------------------------------------------------------------------------------------------------------------------------------------------- one is being scrutinized for valuation purposes. The HR staff must keep all elements of the planned merger under wraps for legal reasons while simultaneously analyzing the potential impact of the merger.
Creating -------------------------------------- HR policies and procedures need to be shaped to the new reality. This involves working with key stakeholders in both units to sort out a steady stream of issues, like flex work plans, vacation plans, salary rationalization, benefits alignment, movement of people, communication systems, and numerous other critical operational decisions. In these decisions, the HR role is that of a pivot player with management and the workforce.
Working to -------------------- cultures Historically, when mergers fail to produce expected results------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------old cultures from becoming calcified and rigid. It is during the integration process that all kinds of dysfunctional and even childish behaviors may become evident at all levels.
Sorting --------------------------downsizings Inherent in most mergers is the ability to trim back on redundant functions in the staff areas and even in production groups. This is a critical issue for any merger process. ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------and after downsizing efforts.
Advocating for transparency Information dissemination during a ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------at any point in time. HR takes on many roles from advisor to top management, to conduit for information, to designing communication processes and being a sounding board for feedback.
Training Integration The Learning Management ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------years. Sometimes a blending of the two systems works well where both groups are called upon to modify their past patterns.
Minimizing distractions What is the name of the merged unit------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------forward decisions quickly become emotionally charged.
It is common in a merger to have both parties feel beleaguered and put out by the other party. It is hard to maintain objectivity and the perception of fairness when groups feel they are under attack. What might seem like a fair split of the pain to top managers may feel incredibly lopsided to both groups on the shop floor.
The workload of HR during the ----------------------------------------------------------------------------------------------------------------
----------- downsize any seemingly redundant HR resources until full integration and stability have been achieved.
Issues and concerns arising out of Merger and Acquisition-
1. Many mergers and acquisitions --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- assume that their knowledge bases apply universally. They do not always take into consideration that performance drivers vary from culture to culture. 2. Language barriers between the participants of ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- between workforces can be effective and productivity can be facilitated. 3. Often human resources professionals are not ------------------------------------------------------------------------------------------------------------------------------------------------------------ strategy and the screening of talent and culture very early on, they will have to play catch-up later on, fixing problems that might have been avoided had they been involved initially. 4. The importance of communication, employee retention, and training and other components of integration is fairly well known. However, integration activities should be ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- and down the organization. 5. Even the most talented business leaders --------------------------------------------------------------------------------------------------------------------------------------------------------, they do not have unlimited time to devote to merger activity. Retain the services of a qualified consultant who understands the company’s merger goals and has the skills to help achieve them. 6. A significant challenge is to ensure that -------------------------------------------------------------------------------------------------------------------------------------------------------- to be met. Solicit customer feedback to verify that all is well on their end. 7. Integration planning and -----------------------------------------------------------------------------------------------------------------------------------------------------------------. If integration is started early, there is a better chance for a seamless transition. 8. Once integration is ------------------------------------------------------------------------------------ progress. It can be challenging to redirect integration activity but it must be done to ensure desired
9. Merger training is often overlooked ----------------------------------------------------------------------------- in automated benefits enrollment. Without necessary training, it will take longer for new employees to feel part of their new work environment. 10. Managers must not only be given adequate information; they must also be trained in appropriate dissemination techniques. They must learn how to ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- are made to feel that their feelings are normal and are given opportunities to openly discuss issues, their concerns can be faced head on. 11. Employee productivity ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- increasingly cautious. Also, the time taken to talk to other employees during the period of uncertainty can affect productivity. 12. HR representatives must work closely with representatives of other functions to ensure that staffing decisions are made strategically. They can help ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------- and benefit programs, and communicate desired information. 13. The assessment and selection of ------------------------------------------------------------------------------------------------------------------------------------------------------ can cost significantly more than retaining original employees in the first place. 14. Lack of information concerning whether ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------and resentment. People are less likely to be effective
during this time, especially in a team environment. It is important to remember that employees often have a great deal of loyalty to their own firm. Make the transition a time of celebrating the company’s history and reassuring employees, wherever possible, that what they valued about their previous company may be transformed but will not disappear. 5 Key Challenges HR Faces during a Merger or Acquisition-
Those in Human Resources face a number of challenges during a merger or acquisition. They include:
1. Identifying and ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- the change will benefit them, and manage the stresses that accompany change.
2. Forming an M&A team and ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- to cultural differences, lead the change process, and retain and motivate key employees.
3. Assessing the corporate cultures. One company may be driven by a sales mentality while another may be focused on innovation. ----------------------------------------------------------------------------------------------------------------------------------------------------- making. HR must anticipate cultural challenges and take steps to integrate the two cultures.
4. Deciding who stays and who ------------------------------------------------------------------------------- key talent.
5. Comparing benefits, ----------------------------------------------------------------------------------- on HR policies and practices.
According to Andrew F. Giffin and Jeffrey A. Schmidt, authors of Why HR Can Make or Break Your M&A,
Examples of Merger and Acquisition- TOP MERGER & ACQUISITION DEALS IN INDIA
1. TATA STEEL-CORUS: Tata Steel is one of the biggest ever Indian’s steel company and the Corus is Europe’s second largest steel company. In ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------access to the European markets and to achieve potential synergies in the areas of manufacturing, procurement, R&D, logistics, and back office operations.
2. VODAFONE-HUTCHISON ESSAR: Vodafone India Ltd. is the second largest mobile network operator in India by subscriber base, after Airtel. Hutchison Essar Ltd ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------its strategy of expanding into emerging and high growth markets like India. Vodafone’s purchase of 52% stake in Hutch Essar for about $10 billion. Essar group still holds 32% in the Joint venture.
3. HINDALCO-NOVELIS: The Hindalco Novelis merger marks one of the biggest mergers in the aluminum industry.
Hindalco industries Ltd. is an aluminum ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------company Novelis for $6 billion, making the combined entity the world’s largest rolled-aluminum Novelis operates as a subsidiary of Hindalco.
4. RANBAXY-DAIICHI SANKYO: Ranbaxy Laboratories Limited is an Indian multinational pharmaceutical company that
was incorporated in India in 1961 and Daiichi -----------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------company in India. Ranbaxy’s sale to Japan’s Daiichi at the price of $4.5 billion.
5. ONGC-IMPERIAL ENERGY: Oil and Natural Gas Corporation Limited (ONGC), national oil company of India.
Imperial Energy Group is part of the India National ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Based firm operating in Russia for the price of $1.9 billion in early 2009. This acquisition was the second largest investment made by ONGC in Russia.
6. MAHINDRA & MAHINDRA- SCHONEWEISS: Mahindra & Mahindra Limited is an Indian multinational automobile
manufacturing corporation headquarters in Mumbai, India. ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------company in the forging sector in Germany. The deal took place in 2007, and consolidated Mahindra’s position in the global market.
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