International HRM & Globalization
Case I – IHR practices in McDonalds
Founded by Ray Kroc, McDonalds is one of the most valuable and well-known global brands that hold a leading global market share of the quick service restaurant segment of the informal eating. With more than 30.000 local restaurants serving nearly 50 million people in more than 119 countries each day, McDonalds as a market leader invest in their people. Their global people principles reflect their commitment to comprise and a supportive workplace environment. McDonalds provides growth and employment opportunities for a large numbers of its employees. In their workplace, employees have the chance to learn what it takes to succeed. McDonalds HR Tactic gives employees the opportunity to move on to their careers in different fields from the ones that they have started with, carrying with them essential workplace skills and values. At McDonalds they pay attention to training courses at every level in the company. For example in every branch of McDonalds around the world, crew members receive training and coaching in order to better understand the values of the company and to learn how they can provide outstanding customer service. It is also important for the employees to have the chance to get trained via computer based training system and to learn more about the global market.
Question: What kind of issues faced are by McDonalds in career progress plans for the staff in their local and national branches?
Case II – Factors leading to common HR strategies worldwide
- Globalization
Globalization’s effects are mainly related to the homogeneity in values, habits, way of leaving, buying habits. Thus, this means that even in communities with a strong culture there is a trend skipping core cultural values and citizens are becoming more “westernized”. For an HR department coming from the USA and operating, for example, in European countries, the differences in the way of living has prompted HR departments to adopt a common way in operating by setting up the same policies in hiring, evaluating and even motivating employees. There are many academics who stress that the time is not far away when even the last cultural obstacles will be abandoned and the “global-village” will have come to be. To summarize, in a place where cultural differences in many countries are even smaller, HR departments do not need to be adapted and thus they are skipping any cultural aspects.
- Cost-standardized & economy of scales
It is a costly endeavor for International Companies continually establishing operations in many countries and markets. In order to avoid the cost of establishing a different tailored approach to respect cultural parameters, many companies are standardizing policies and strategies in order to achieve econmies of scale — one of which is the HR strategy. In such situations it is easier both to transfer and teach their strategies and thus avoid cultural adoption. This is a strategy that even more “transatlantic” companies are following in their efforts to expand operations worldwide. Following this strategy HR departments are adopting a holistic approach in the way they are treating employees.
- Standardization of a specific HR strategy globally
As mentioned above one of the greatest costs nowadays, which for many companies constitutes an obstacle in expanding their operations, is the labor costs. Even for big companies setting up from scratch a new HR platform is a costly process. In order to avoid this process many companies are following a holistic approach only for their HR departments, while at the same time the rest of the departments are following a more local approach.
- The need to keep the same brand philosophy globally-through implementing the same HR strategies worldwide.
Another reason for companies to adopt global HR policies is the strong brand image that they have and thus they are expanding their “know-how” globally. This means that they have achieved significant levels of brand awareness that employees are adapting to them and not the company to them. For example, Starbucks is following a HR strategy promoting that “everybody knows they way we are operating, thus they know from the beginning in which company they are going and what they have to do”. This strategy, however, is efficient only in the cases of very strong global brand images.
Question: To what extent is globalization a driver for isomorphic HR practices around the world? Do local variations play an additional role? If yes, what are the main factors of local influence to generic HR concepts?