Vancouver Communications Case - Essay Example

Vancouver Communications Case Part I: Research and experience has reinforced the significance of national culture on organisational performance and success. To understand impact of culture on management styles, Hofstede’s (1980) work on the relationship between national culture and organisational behaviour has provided ground-setting principles, in the form of six dimensions, to understand impact of culture on management. Vancouver Communication’s expansion to Turkey has been viewed based on Hofstede’s cultural dimensions and impact of headquarters’ HRM policies has been evaluated. Further, concerns raised by expatriates from Canadian and England office have been analysed and resolutions recommended. Based on Hofstede’s (1980) cultural dimensions, the UK and Canadian culture are that of small power distance and with weak uncertainty avoidance, which is completely opposite to Turkish culture with large power distance and strong uncertainty avoidance. The UK and Canadian cultures are highly practical, and exhibit risk-taking behaviours Turkish people try to avoid uncertainties and risky actions. Turkish culture wishes to involve others to arrive at consensus unlike UK and Canada. On Hofstede’s (1980) individualism/collectivism scale, Canada and UK have small power distance and individualistic nature, whereas Turkey has large power distance and is collectivistic in nature. Therefore, UK and Canada are more participative in nature; have less hierarchical dependency; highly democratic and provides equal rights to all individuals. Turkish culture is highly autocratic and follows hierarchically defined roles and responsibilities. Individualistic nations such as UK and Canada expect every individual to be accountable for self, whereas collectivistic Turkey regards any task or activity to be a collective responsibility. Turkish people are emotionally dependent on each other and morally committed to the organisation, unlike individualistic cultures. In Turkey, rules, policies, duty and security are more important than innovation, autonomy, pleasure or individual financial security like in UK and Canada. Values differ according to the groups in collectivistic cultures whereas individualistic cultures follow universal values for all. Canada and UK fall under weak uncertainty avoidance and masculine nature whereas Turkey has strong uncertainty avoidance and feminine characteristics. In Canada and UK, money is regarded as very important whereas Turkish culture regards people and environment as important. Setting up operations in Ankara, Turkey is complicated and entails a variety of issues/challenges for Vancouver Communications form HRM perspective. Cross-national HRM is most effective when it includes the framework proposed by Budhawar and Sparrow (2002) based on three levels of factors and variables. These include, national factors involving national culture, national institutions, business sectors, and dynamic business environment; contingent variables such as age, size, nature, ownership, life-cycle stage of the organisation; and thirdly, organisational strategies such as HR policies according to the business strategy and labour markets (Budhawar, 2004). The strategic HRM version of Miles and Snow model (1984) suggests that organisations follow generic strategy and then develop a structure and HRM practices in line with the generic strategy (Lundy & Cowling, 1996). Based on the above propositions, main challenges that would surface Vancouver Communications in Turkish operations would be related to human resource management and business strategies. VC was able to apply home country approach to Wolverhampton subsidiary using identical organisational and people management system and practices because of cultural similarities between the two nations. However, application of Canadian management systems to Turkish operations as advised by the CEO to Helen Reeves would be challenging. Though policies may be formulated and implemented accordingly, repercussions could be detrimental to the business and could further lead to inappropriate human resource management. For instance, participative practices followed at home company may provide no direction to Turkish employees because they look up to superiors for directions or dictate tasks. This also means misalignment of goals, lack of information and skills. Secondly, implementation of practices such as performance related pay may not achieve the desired results because Turkish people emphasize collective efforts than individual achievements. Turkish employees might feel offended and/or dominated by such behaviour, which could further affect their motivation and morale. Thirdly, cross-cultural communication can pose great challenge to managers (Francesco & Gold, 2005). Francesco and Gold (2005) refer to two main challenges, i.e., cognitive and behavioural diversity. Different possible resolutions for these challenges/ Integration of Canadian HRM in Turkish settings have been further explored. Adhering to Mike’s proposal of following the home country organisational and people management systems and practices would be challenging for Helen at Turkey. Evidences of implementation of global standardized HRM practices and policies with local adjustments due to pressures of globalization are present. In short, globalization brings critical challenges to managers, related to cultural contexts, which need to be identified and appreciated in their own identities. This would require the managers to gain an understanding of cultural values and practices and a flexibility to adapt. Recommendations to these issues/challenges consider Budhawar and Sparrow’s (2002) framework explained earlier. Firstly, keeping in mind VC’s strategy to save costs by setting up operations in Turkey because of low labour costs, all business strategies formulated need to be aligned to this goal. Formulating business strategies based on home-country approach may not be appropriate because costs in home country are quite high. This would require modification, majorly, in terms of production costs, supplier costs, compensation and pay models, and operation and maintenance costs. Firstly, Helen would require a staffing plan as per international HRM norms and organisational stage. At international level, oorganisations recruit employees based on organisational life cycle (Dowling, Festing & Engle, 2008). Milliman et al (1991) suggest that staffing usually depends upon stages of organisational initiation, functional growth, controlled growth, and strategic integration. Third country nationals are recruited during strategic integration of business or formulation of larger plans related to the business as they come with vast experience and knowledge at global level (Dowling, Festing & Engle, 2008). From performance management perspective, though Turkey is known to be less achievement oriented, Aycan and Yavuz’s (2008) study has identified that the socio-cultural environment in Turkey is changing towards achievement and performance oriented one. In another study, Aycan et al., (2000) found that managers implement HRM practices based on their assumptions about the employees and nature of the task. However, other criteria for rewards also include age, seniority, and loyalty (cited in Aycan & Yavuz, 2008, p.173). Helen should formulate performance management system that would reward individuals based on merit and also teams achievement. Following the practices of innovation, flexibility and involvement of employees would be highly challenging in the Turkish setting. Therefore, the Turkish managers can be entrusted with targets of implementing specific number of new methods/procedures in specific period of time. This will provide a goal and encourage innovation and participation. Home-country managers heading each function in the host location should be trained on cultural adaptation in order to gain acceptance and adapt to the new culture. Cross-cultural training and development of employees moving to new locations to set up business which will prepare them to overcome the hurdles of cross-cultural communication, from cognitive and behavioural perspectives (Black & Mendenhall, 1990; Francesco & Gold, 2005). To summarize, Vancouver Communications’ case illustrates the significance of obtaining an understanding of the dynamics of international HRM before embarking on specific assignments related to expansion of business across borders. Setting up operations in other countries will be impacted by the national culture to a large extent and success of the operations depends on the extent of integration between HRM practices with employees’ needs and cultural preferences. Hence, the HRM practices as followed in headquarters may not be as effective, and would require some modification to suit the local practices; cultural training for managers is also required. Part II: In addition to the business expansion plans to Turkey, responses from current and previous expatriates obtained from email survey by Tony Rossini point to issues related to expatriate adjustment, repatriation process and expatriate compensation, all affecting the employees and organisation in different ways. These issues need to be addressed first in order to avoid similar issues upon expatriation to Turkey. Management specialists explain that the main purpose of sending parent country nationals (PCN) to other locations has three important functions. Firstly, to fill the positions in the new locations to transfer their know-how to the new locations; in addition, this process will also help in filling positions with the right people that can aid in initial stabilization of the organization. Secondly, expatriation facilitates organization development in new locations that is aligned to the parent organizational culture. This is one of the main reasons for expatriation at Vancouver Communications. Moreover, implementation of homogenous practices throughout the company with headquarters policies and systems becomes simpler. Here, expatriation of employees provides opportunity to retain management and control with headquarters. The third dimension includes management development, which helps managers to increase their learning and competence by working in different situations. From management development aspect, expatriation process is a type of planned and deliberate learning process that facilitates learning and growth of managers; this process helps managers in acquiring new skills and abilities by exposing them to a variety of situations including selection and recruitment, performance management, planning, training and development, goal setting, etc (Woodall & Winstanley, 1998; Gooderham and Nordhaug, 2003). These opportunities are available for managers even in the home country, but in foreign locations these activities provide them intense learning with different perspectives. Considering these objectives, expatriation process provides a comprehensive uplift to the managers in terms of responsibility, accountability, learning and skill development. On the contrary, repatriation process often comes with lower responsibilities and accountability if unplanned. For employees returning to resume their employment at headquarters, repatriation process needs to be properly planned. Usually, expatriation takes place for considerably long periods, and it would not be possible for senior members to plan for expatriates’ repatriation in advance. If unplanned, repatriation can cause unnecessary frustration, demotivation, and a waste of expertise if the skills and competencies cannot be used effectively at repatriated locations (Woodall & Winstanely, 1998). Managers returning on repatriation would have acquired more skills, competencies and knowledge and hence their roles and responsibilities upon repatriation should be in congruence with the enhanced competence failing which their motivation would dwindle. This could even lead to employee leaving the organization, which will be a loss for the organization. Another aspect of repatriation is the remuneration, which plays a major role as managers returning usually find that their remuneration has reduced upon returning (Stroh, 2005). The pay package must at least match with the home country compensation; additional repatriation allowances would add great value. The finance aspect of repatriation is important because the employee would be settling in different location after a long time and would face adjustment issues. A third perspective of repatriation is the change aspect upon returning. Parent company would have undergone significant changes with respect to systems, structure, and culture; repatriates must be appraised of these changes else they would experience a culture shock, which would in turn impact their performance and future with the organization. Considering these implications of expatriation and repatriation processes mentioned in literature, the reasons for issues faced in Vancouver Communications are very clear. Firstly, inappropriate repatriation process has left the managers clueless of their future role in Vancouver Communications. Expatriate adjustment affects their psychological state and therefore their performance (Wang, 2002). Varied expatriate compensation has caused significant disturbance to local employees; it has also affected repatriates compensation to a large extent in a negative manner. Considering these responses as feedback from expatriate and local employees, Tony Rossini has the responsibility to act swiftly in order to avoid similar effects in Vancouver Communication’s Turkey operations. Cerdin asserts that the success of an international assignment encompasses the stages of both expatriation and repatriation and affects both individuals and organisations (2008; p.210). The skills gained by expatriate managers can be of great use only if repatriation process is appropriate. In fact, expatriation and repatriation can have great impact on organisation’s success if incorporated into the strategic approach (Mayrhofer, Sparrow & Zimmermann, 2008). Tony Rossini should work closely with Helen Reeves so that they can arrive at solutions to issues surfaced in the email surveys, which could further be applied to Vancouver Communication’s expansion into Turkey. Expatriates’ return process should be well planned and discussed with the expatriate managers before their repatriation process. Studies reveal that high turnover of repatriated managers is due to lack of direction (Fisher, Schoenfeldt & Shaw, 2004; p.846). A thorough assessment of skills gained will be helpful in the repatriation process. This process will also provide direction to the expatriate managers upon return. Skills and experience gained can be used in setting up Vancouver Communication’s Turkey operations. This can be done either by sending some of the repatriates to fill positions in Turkey upon reaching an agreement, or by giving the repatriates the responsibility of training expatriates chosen for Turkey operations. This practice will help the expatriates use their skills and motivate them that their expertise and knowledge are valued. Vancouver Communications adopted home country practices and policies even for expatriate managers in foreign locations, which surfaced as a concern in the email survey. Francesco and Gold (2005) have argued that ideal compensation system is the one which assigns salaries to employees in accordance with internal labour market. Budhawar (2004) notes that expatriate compensation depends on various factors such as personal turmoil related to movement; cultural and lifestyle differences; national factors related to currency denomination, political risks, housing and other prerequisites covered in the package. In order to retain employees in the home country and foreign location, a revision of base salary needs to be undertaken. For expatriates, special allowances may be given which will suffice for their relocation and other expenses. Linking the salary of all expatriates with home and comparing with host location is another approach followed in the European companies. In this approach, higher-of-home-or-host is followed (Berger, L and Berger, D, 2004). The present case represents Vancouver Communications as a successful organisation that has established itself in two nations with different cultures. However, staffing decision is still a complicated one because it is difficult to decide which type of manager, PCN, TCN or HCN, would best suit the assignment. This depends on various factors such as organisational culture, business strategy, organisational policies and nature of product/service as well as organisational life cycle stage (Dowling, Festing & Engle, 2008). In conclusion, expatriation and repatriation processes come with their own advantages and disadvantages and hence should be managed through appropriate planning of various activities. These activities include expatriation training, remuneration, goal clarity and learning and development; for repatriates, it includes repatriation process in terms of goal clarity and role assignment congruent with their skills and competencies, convenient remuneration package, and acclimatization to the cultural, structural and organizational changes in parent company. Based on these aspects, the email responses indicate that Vancouver communications needs to revise its expatriate practices in terms of planning and compensation so that expatriate managers are clear about their roles and responsibilities upon repatriation. This will help the organisation by reducing expatriate turnover. 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