Medical Precision Systems in HRM - Case Study Example

Full of Medical Precision Systems' Human Resources Management Policies Case Study Medical Precision System (MPS) produces medical supplies and is based in Birmingham, Alabama. Having started in 1972, it now employs 2000 staff members and has an annual turnover of $150 million. It is an American-owned company that is well respected and employs a policy of best-practice Human Resource Management (HRM) in order to avoid union influence. The company tries to avoid layoffs during slow times as much as possible in order to retain staff loyalty. MPS offers excellent benefits including profit sharing, pensions, and a share-options scheme. (Beardwell and Holden, 2001, p.742.) Employees have the opportunity to get their bonuses in the form of company shares after having been employed with MPS for more than two years. "A share is a unit of ownership. When you own a share you become a part-owner (shareholder) of a company and you will have the right to: receive any dividends paid on each share that you own; receive a copy or summary of the company's annual report Last Name 2 and financial statements as well as any other shareholder communications; and attend, speak and vote at general meetings of the company," as reported by Old Mutual (2008). A performance management culture exists at MPS and appraisals, remuneration, and promotions are highly performance based. Artley and Stroh (2001, p. 5) reports, "All high-performance organizations, whether public or private, are, and must be, interested in developing and deploying effective performance measurement and performance management systems, since it is only through such systems that they can remain high-performance organizations." For fifteen years MPS has been employing a total quality management (TQM) program. Ten employees are on a team and they elect their leader. Group, or team, leaders hold feedback sessions and report what they gather to the senior production managers. (Beardwell and Holden, 2001, p.742.) A great deal of time, effort, and money is involved in providing excellent training in teamwork, people skills, and job education. Along with all of this training, company benefits, and a caring staff MPS also offers recreational facilities, sports, and social events for its employees. The company has strong values and a clear vision and it lives up to its mission statement, "MPS-working for the health of America". (Beardwell and Holden, 2001, p.742.) In the early 1990s MPS took its business worldwide and expanded into Europe, the United Kingdom, Sweden, and France. The strategy had to be adjusted as the company was now global and the system had to cater to global commitments and developments. Although business on the production and marketing side were going well Last Name 3 and the United Kingdom subsidiary in Bath and the Swedish subsidiary in Uppsala experienced steady growth, the overseas HRM experienced many difficulties. Reports revealed there was much potential for the French subsidiary. ((Beardwell and Holden, 2001, p. 742.) The company faced some disadvantages of going global and the lack of success with HRM that other firms run into. These include, as listed on 03 October 2003 by easterangel-ga (a blogger on Google Answers): -Flexibility and change in mindset: Cultural taboos or sensitivities of the market -Level of commitment -Organizational structure: Ensure multinational legal compliance such as labeling, packaging, product safety, and liability laws) -Language barriers MPS's HRM worked for its home-based parent company but did not do quite as well with its subsidiaries. Expatriate managers exerted strong controls over employees in different countries based on goals in financial and production terms, which were set by the parent company, did not give the local subsidiaries much input. They did not have much say in business activities. (Beardwell and Holden, 2001, p.742.) Keeping unions out or making sure that their influence was kept to a minimum were the instructions given to expatriate managers. Profit sharing and the company share scheme were implemented for all subsidiaries. Staff members completed annual opinion surveys. Expatriate managers, host country managers, and employees were Last Name 4 encouraged to keep communication flowing frequently. (Beardwell and Holden, 2001, p.743.) Systems that encourage teamwork, workplace feedback, and improvement mechanisms were employed as TQM programs were introduced. The strong MPS culture, public relations image, and the mission statement (all in the subsidiary company countries' languages) were also employed. The HRM strategy including the feedback mechanisms and training programs were for all employees, including the global members, but were created and implemented in the USA. (Beardwell and Holden, 2001, p.743.) There had been success with many of the initiatives, however, feedback revealed that not all has been successful. Reluctance and even opposition came from the European subsidiaries. (Beardwell and Holden, 2001, p.743.) A full review, as listed by Beardwell and Holden, 2001, p. 743-744, was performed by Jim Grant and the findings were as follows: -Diversity of conditions in the subsidiaries and U.S. practices sometimes do not translate well -Expatriates, industrial relations, degree of control, and style of manage- ment did not fare well with European subsidiaries: it was hard to assign tasks -Although French and Swedish senior managements spoke English very well, communication barriers extended between the American expatriates and their subsidiary staff members Last Name 5 Feedback from the UK showed that regardless of the common language, Americans could not always understand the British way of thinking. Dgray (2005)posts an opinion and perhaps an explanation of the differences in thought processes: "people in areas like Europe, where the mix - and sometimes clash - of multiple languages and cultures are a part of daily life, might think differently than people who dwell in more culturally homogeneous areas like the US. Languages are not simply words, but reflections of world views. To understand and speak multiple languages requires an ability to think in multiple languages. This kind of fluency forces people to see and understand other perspectives. In the US we don't have that fluency. The Atlanticand Pacific oceans, plus the size of our continent, serve to isolate us culturally, and I think our relationship with the global community often suffers because of our failure to fully understand other points of view." The thought of working on weekends to fill emergency orders created resentment. Union officials became obstructive and a large walkout nearly occurred when the idea of having only one union negotiate issues. Much reluctance and disagreement was involved when the performance management system was being initiated. The unions and employees that they had very little control and that the targets were too tough. (Beardwell and Holden, 2001, p.743.) Last Name 6 Feedback from France revealed that excluding unions was fine as this subsidiary is a greenfield site. Although some of the technical staff belong to unions, recruiting new staff was sufficient. Feedback showed that there were problems with the feedback system. This workforce would rather have an authoritative line manager direct them instead of having cellular feedback mechanisms. Expatriate manager Andy Smith, who was in charge of the French subsidiary, felt that there are too many holidays for that country. The work schedule would be hindered when another saint's day holiday came up and his workforce was not happy about working extra hours. Although MPS did set up a work council based on French laws, the workforce still provided the feedback that things were not operating very effectively. (Beardwell and Holden, 2001, p.743.) Workforce, although in a greenfield site, joined unions and 65% of the employees in the Swedish subsidiary were union members. They, like the France and United Kingdom workforce, felt that the targets set under the performance management scheme were too harsh. They did not like the control, pressure, and push of the American management and were not thrilled by the too-much-work culture. (Beardwell and Holden, 2001, p.743.) Jim Grant, who conducted the review, came to the general conclusion that some HRM policies were more successful than others in the subsidiaries. A works council was set up for management and employees under Swedish and EU laws. However, Americans were resentful as they had to conform to these different laws. The Swedish Last Name 7 organizer felt that the Americans, at times, were not willing to cooperate. . (Beardwell and Holden, 2001, p.744.) By focusing on the various factors such as cultural differences, language barriers, different though processes, varying work habits, norms and values, and management style, a global enterprise can conduct operations without national boundaries. Kottolli (n.d.) states, "A Global company is more than a firm with offshore operations; A global firm operates basically without the constrains or traditions of national boundaries and seeks to compete in any high potential marketplace on earth. A leader for a global enterprise must know what to do when competitive advantage is fleeting, when change is omnipresent, and when home base is the globe". MPS can release the tight control and become more entrepreneurial and flexible while providing quick responses so that it can handle cross-cultural influences and conditions. By adopting a global strategy, the company can better meet its goals. The author suggests that, "The customers (are) the center of focus of development and training. In other words, the primary focus of training and development is serving customers increasingly well and with competitive advantage. The firm's global strategy wraps around the training and development approaches; the organization's essential sense of competitiveness and strategic intent is embedded in all training programs and interventions. The six leadership development clusters have a contemporary management viewpoint. The clusters are organized around requirements for global competitive success rather than traditional skill sets." Last Name 8 It is crucial that MPS conducts environmental scans in order to understands the major internal and external influences on the company's ability to find its niche and to create a competitive edge. Observing trends, employing technological advances, understanding influences, and implementing marketing and distributing practices are just a few things that help the company manage the environmental scan. Examining political and cultural influences and internal economics are very important also. (Kottolli, n.d.) Managers must develop and implement competitive strategies that will work for its subsidiaries. The strategy must be customer focused. Kottolli reports, "The resources and assets of the enterprise needs to be looked at in dramatically expanded ways. For instance, the role of brand positioning has to be considered in terms of global strategic presence, as well as local marketing and competitive conditions. The internalization of taste modified by local culture and values, supports the practice of mass customization and segmentation, but always from the perspective of the global brand, product offering or business franchise. The issues of quality, resource efficiency, and cost leadership are becoming elements of marketing as well as financial strategy. Innovation and creativity have strong strategic implications as the organization confronts different competitors in virtually every local marketplace. Marketing tactics such as pricing and promotion plans, which historically have operated on a local basis must now have a global coherence as well as coordinated to face the competition". Last Name 9 The global company must be able to manage organizational versatility, teams and alliance, and change. Global businesses must deal with continuous change as that is the nature of a worldwide enterprise. Along with these managing personal effectiveness is a must as the personal growth and adaptation for managers is important as they operate in a global business. By being able to adapt personally to changing business, conditions, cultures, management and operating styles, and legal requirements, managers can do a better job at management and training their staff. Much training should be invested as managers and their workforce will need to learn all they can as they enter the global world of business. HRM should be thought of in a completely different way than in the traditional way. The customers, which consist of people from around the globe, should be the center of focus. Views about hiring, training, incentives that are offered, leadership, instructions, and measurements of performance should be changed. By doing so, MPS can better meet the demands and reap the rewards of becoming a global business. Bibliography Artley, W. and Stroh, S. The Performance-Based Management Handbook. Volume 2. Oak Ridge: Oak Ridge Institute for Science and Education and University of California, 2001. Beardwell, I. and Holden, L. Human Resource Management, 3rd edtion. NewYork: Financial Times/Pearson Education, 2001. dgray. Online posting. 24 September 2005. CEO Bloggers Club. 12 April 2008 . easterangel-ga. Online posting. 03 October 2003. Google Answer: 10 April 2004. < http://owl.english.purdue.edu/owl/resource/557/09/>. Kottolli, A. (n.d.) Leadership for a Global Enterprise. 13 April 2008. . Old Mutual. 10 April 2008. Old Mutual. 10 April 2008 < http://www.oldmutual.com/vpage.jsppage_id=2185>. Read More