European Industrial Relations Infrastructure - Literature review Example

European industrial relations infrastructure The incentives of mobility are immeasurable. As such, the European policy makers have since 1987 emphasized on the need to invest in infrastructure (Foreman-Peck, 1999:288). During those years, technological infrastructure development, an initiative already incorporated in the industrial policy, though not pursued consistently, had its base on organization creation. Indeed, this was the start of the emphasis on the need for improved European industrial relations infrastructure (Foreman-Peck, 1999:289). In essence, Quality and efficiency in infrastructure crucially dictates the competitiveness of European Industry. In this, the major concern deviates to energy, communication services, and transport systems. Therefore, upgrading and modernizing these critical networks plays a key role in the industries. Bottlenecks need to be overcome and cross-border connection improved. To realize this, massive investment and initiation of new financial solutions like joint ventures and project bonds can go a long way towards the realization. From research, many of the critical European network services are provided at comparably high prices. For instance, the electricity prices in Europe are relatively high from an international perspective. Arguably therefore, there is a need to implement the energy sector by the internal market. As this paper will present, infrastructure is a factor behind the success of every joint venture as will be presented in the case of Eden group. Eden is a Turkish group of companies that specializes in production and marketing of beer, malt, and soft drinks. The company has fourteen breweries, four malteries and nine coca-cola bottling facilities. Eden has a diverse market that ranges from the Adriatic to China and more diversification programs are underway. Its annual brewing capacity is estimated at1.8 billion litres, malting capacity of 150,000 tones, and coca-cola bottling capacity of 420 million unit cases. These outstanding outputs have been increasing yearly, and the company achieved its 2004 target of 50% increase in beer volume. On the other hand, Pancevo is a Serbian oldest brewery company estimated in 1722. Pancevo evolved gradually in terms of performance and ownership, and by 2003, it had acquired an experience of two hundred and fifty years yet it yields low sales. Hence merging with Eden was a great step forward. With such a diversity, meeting every challenge that comes along with global competition and sustainability increase demands for innovation excellence. As a critical driver for productivity, innovation leads to material efficiency. One factor that needs to be realized is the fact that without innovation, it is a challenge for the European industry to finish successfully in the global market. Human resource management is an extremely sensitive field especially when conducting international business. This is the reason because the diverse global community has different laws practiced in numerous ways. The differences in customs and laws emerge due to different governing system of a country. This difference appears in the case of Eden and Pancevo joint venture where Eden group is a Turkish company whiles the Pancevo breweries is a Serbian company. Before the two companies merged, each company had different systems and practices of human resource management that varied from size and policies governing employees (Hollinshead, 2007:382). The Eden beverage group human resource management had an efficient work force due to complex and diversified multinational team of employees. Pancevo on the other hand was used to small efficient work force that existed until the joint venture happened. By the time the joint venture took place in 2003, Pancevo had three hundred and forty employees from the Serbian community. These employees were extremely afraid of losing their job once the joint process took over. However, the two companies negotiated about the employment practice and went ahead to form a new balanced human resource management team. Ideally, the hard task of transferring and deploying different staff would later emerge due to cultural differences between the original nationalities of the companies. Cultural differences, language barriers, and different payment system would affect the work force of the new formed company. The management team are the most hit by cultural differences because they are obliged to lead a different category of people with different cultures and attitude. In Eden’s case, the human resource management deployed to Serbia would need a thorough research on Serbia’s employment laws and trade union policies as well as Serbian’s way of life (Hollinshead, 2007:382). More so, awareness of Serbian employee benefits and rewarding would be a crucial tool the human resource managers should acquire. On another perspective, managers can adapt Carlsberg management skills where managers are encouraged to look for tools in order to develop a sense of belonging within the new global organization and a common ground for implementing new company strategies (Gersten, Zolner and Soderberg, 2012:144) The joint venture The joint venture between Eden group and Pancevo brewing companies had an official registration in 25th august2003. The joint venture agreed on having a new name to the two joint companies, which is Eden Weiser. The appointment of management teams of both companies took place with an aim of steering the process of organizational integration. The bottom line agreement was that Eden group would venture in to Serbia and take over Pancevo beer manufacture. The immediate contribution of Eden was to inject capital and enhance product quality, which include, reshaping bottles and crates, pasteurization, product rebranding using a new logo and introducing plastic bottles. Eden is lucky that the Serbian politics have not invoked trade restriction on international companies, but has rather embraced the fact that investors come to uplift the infant companies by helping it grow (Adekola and Sergi, 2012:119). Most developing countries usually protect their own corporations by restricting international companies in their markets be4causeb they believe international companies come to ‘kill’ their growing companies. Majority of western firms are improving their investments by collaborating in the form of joint ventures with firms based in Eastern European countries. Joint ventures are increasing by the day despite the existence of strict trade policies like Direct Foreign Investment (DFI) in Western Europe. However, the irony is that the eastern European human resource management is not keeping up the pace of advancing as fast as the joint ventures, hence human resource management model need to restructuring in many areas. To begin with understanding Eastern European’s history is extremely crucial since it influences today’s business and political situation (Mayrhofer, 2012:566). Eastern European states comprise of Croatia, Czech Republic, Bulgaria, Estonia, Hungary, Latvia, Poland, Romania, Lithuania, and Russia. Historical world war created a political world gap between eastern and western Europe. The whole of Eastern Europe was under the governance of the former Soviet Union, which set out rules of centralized economy (Quelch, 2006:515). This type of economy affected the human resource management of that time because it required managers of eastern European enterprises to acquire the ability to bargain and to manipulate production and financial data (Genov, 2010:162). Centralized allocation of resources was the force that drove this type of management system, which ended up bringing out rivalry. Therefore, due to communism political system, most of the large companies were state-owned hence influencing trade unions. On a lighter note, the labor unions in Eastern Europe have raised concern and the policy makers are implementing labor laws to upgrade the infrastructure. Union and labor organizations are emerging to highlight employees’ plights and offer proposed measures to improve the situation. For instance, (UEAPME) emerged in 1996 and advocated for a collective agreement concerning parental leave (Vanachter and Vranken, 2004:117). Besides legal and institutional infrastructure, there is a need to have a practice of industrial relations on European level. This relation is a crucial tool to use in speaking of European social dialogue and collective bargaining between management and labor at national and international level. These agreements should be set in a manner that private parties cannot deviate from them. More so, commissions should add up support by vividly weighing proposed recommendations of management and labor. The policy regulation recommendations come from as far as the community level, and it is upon the European commission to act effectively and upgrade the historic human resource system in Eastern Europe. Prior to history, today’s business operation carries along the historic influences. This is evident in the sense that many senior management executives have their jobs because of connections rather than rightfully acquired expertise. This fact gives the western European managers no other option but to accept and embrace this historic diversification and aim at achieving prosperous business relationships (Clover and Wasserman, 2003:8). Research shows that eastern European employees are inactive compared to western Europe employees. The research bases its evidence in the fact that the majority of the western managers are exceptional and that they easily adapt to local condition to the extent of detecting and solving any technical and organizational problem at a glance. This has led to eastern managers’ rate positioning as second-class managers or employees in the European human resource management market. Finally, political and cultural issues have been set aside for a common goal between the Eastern European countries. Most of these countries have different languages, which range from Italian, Spanish, Dutch English and other different languages. The Eastern European nations have come together to learn each other’s language. Apart from language, these nations have accepted and embraced each other’s education system, finances and other social factors (Harris and Mcdonald, 2004:10). The outstanding evident step that the European countries have taken is that they have accepted unity by embracing the European Union. Comparison between Eden case study and other brewery company industries Luckily, Eden’s joint venture was successful compared to other brewing companies whose joint ventures were affected by inevitable political and environmental forces (Aberle, 2010:4). Two international brands in eastern Europe are victims of such circumstances because their joint venture investment in a new market turned upside down (Adekola and Sergi, 2012:112). These two companies are Carlsberg of Denmark and Heineken of Holland. These two brands are among the top ten breweries in terms of total production, and their products are available in all parts of the world. However, the two brands idea of forming a joint venture in Myanmar country in Asia hit the wall. Political hiccups emerged when military overthrew the government and ruled Myanmar. The rebellious military rule brought instability in the country, and the Carlsberg and Heineken newly merged company looked for measures of withdrawing its investment from Myanmar. As if tension was not enough, the human rights activists in Myanmar protested with claims that the newly ventured Heineken and Carlsberg was contributing economical assistance to the regime, and the government immediately stopped the importation of beers for the venture group bringing beer business to a halt. Another poor market research scenario occurred to two beverage companies that formed a joint venture. Pepsi-cola and Lipton tea agreed that Lipton would make their iced tea using Pepsi’s production processes for sales of iced tea in glass bottles. The firms signed an agreement, and the processing took place, but a year later the market was stagnant and no profit was on reach. The positive news about the company is that the two companies kept their trust and instead of breaking up they searched for better ideas, which eventually brought a new brand called Lipton Brisk, which tremendously hit the market. Lipton Brisk is tea sold in cans and plastic bottles like most soft drinks today. In summary, Joint ventures are investments doors that improve the firm’s brand and its output, which in turn brings profits. However, not all companies and institutions that engage in joint ventures become successful as anticipated. This means that proper research and planning are crucial tools to consider before venturing into a joint relationship (Clover and Wesserman, 2003:8). Organizations should hire efficient and competent managers because they are portrayed as the eyes of a company. Therefore, a competent manager will consider the distance, language barriers, currencies, culture, as well as laws and customs of a targeted market before laying out decisions Brewster and (Mayrhofer, 2012:566). This precautious measures will help a company in avoid nasty situations like the one experienced by Carlsberg and Heineken when they jointly ventured in to the Myanmar country in South Asia. Bibliography Aberle, I. 2010. Why are some International Joint Ventures a Success whereas others are a Failure? And why is the Performance of International Joint Ventures important both for Foreign Direct Investment and international Trade Flows? Mu?nchen, GRIN Verlag GmbH. http://nbn-resolving.de/urn:nbn:de:101:1-2010091313196. Adekola,A., and Sergi, B.2012. Global Business Management: A Cross-Cultural Perspective Ashgate Publishing, Ltd. Brewster, C., and Mayrhofer, W. 2012. 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