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Report on Human Resources Management in the UK SME

7 pages
1780 words
Carnegie Mellon University
Type of paper: 
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Table of Contents

1.0 Introduction 3
2.0 Managing People across Cultures: influences affecting Human Resource Management practice 3
3.0 The role of HRM in establishing a common culture 5
3.1 Resourcing 7
3.2 Performance and reward 8
3.3 Training and development 9
3.4 Employment relations and communication 10
3.5 Equality and Diversity 11
4.0 Summary/conclusion 12
5.0 Recommendations 12
6.0 Reference List 14

1.0 Introduction

The UK SME for over a decade has been at the forefront in developing technical software for business and industrial automation. The company has managed to design softwares for different organizations both in the UK and other foreign countries around the world. The company is based in London, and it has been privileged to reach out and serve a wider base of clients in Northern Ireland, Scotland, England and Wales who makes up about sixty percent of our customers. After recording improved growth and product success, the company decided to solicit more support and partnership from a renowned Japanese based company, Stegro, and establish a common culture and way of doing business that is consistent with the practice and culture of Japan. This is intended to improve further the performance of our organization and market its brand in foreign markets. This report gives the most important information that Stegro organization needs to know before the start of the proposed cultural integration between the two companies. In this report, a thorough explanation and assessment of the challenges as well as the potential opportunities the new company may face while working at the London based company is provided in greater detail. This will inform the new Human Resource Management (HRM) team about resourcing, performance and reward, training and development, employee relations and communication and equality and diversity as they plan to operate in the UK.

2.0 Managing People across Cultures: influences affecting Human Resource Management practice

The process of shifting the operations of a company to a foreign country involves a lot of changes that must be put consideration for any success of cultural integration and way of doing business to be realized (Armstrong and Cummins 2011, 12). Upon establishing an organization in another country HRM team usually, find it difficult to manage employees from different cultural backgrounds. For instance, Japan and UK are two distinct nations that exhibit contrasting cultures in different aspects. It is expected the HRM practice in the UK differs considerably from the way it is done in Japan. The apparent differences stem from the unique HRM orientations adopted by organizations in the two countries. The environment of doing business in Japan is not similar with that practiced in the UK.

HRM practice in the UK focuses more on effective management of employees and considers it a crucial parameter in the delivery of products or services. Most entrepreneurs in the UK spent quite a lot of time thinking about the management of employees (Greene 2015, p. 16). This represents the major concern that companies and organizations contend with. In contrast, Japanese entrepreneurs focus more on the product or service and although they might spend time thinking and worrying about the management of their workforce they do not do it as much as their UK counterparts. They are known to figure out differently the human resource practice.

These apparent differences in organizational cultures between the two companies, will present a set of difficulties that might negatively impact a smooth cultural integration. The new management must put into consideration these differences and initiate appropriate policies that would help in addressing them.

Despite these apparent differences, there are similarities of human resource practices advanced by the two countries. For instance, the recruitment of employees focuses more on the suitability of an individual to the culture of an organization. The two countries hire people who possess proven positive attitude, exclusive commitment to work, employees who are willing to learn and ready to take prompt initiatives.

In a bid to transition well into the new environment, the new Japanese based company must put into consideration these differences. Besides these inherent cultural differences, the HRM team should also pay close attention to external influences that are likely to affect the human resource management in the UK (Truss et al. 2012, p. 41). Government regulations should be the first consideration the new company must understand. New workforce from Japan should acquaint themselves with government regulations in the UK by complying with the set standards. Unlike in Japan, regulations put in place in the UK are tougher and influence every process of HRM practice namely hiring, training, compensation, and termination.

Economic conditions represent another influence that affects the human resource management of a foreign-based company. Stegro in its plan must consider the UK economic status as this marks a significance influence that can affect HRM practice. This will not only affect the quality of employees, but also it might have a major bearing on the ability of the organization to hire anyone at all (Arthur 2001, 21). Your company should have a thorough assessment of the prevailing conditions in the UK and develop appropriate plan to handle and manage effectively human resource in the event of an economic downturn.

3.0 The role of HRM in establishing a common culture

The HRM department in any organization is quite invaluable. It encompasses the formal systems put in place by an organization or a firm to manage people. Essentially the most important functions of human resource department are often categorized into three main areas, these include employee compensation and benefits, defining or designing work and staffing (Elo 2012, p.35). They help to maximize the productivity of an organization by laying out concise frameworks that optimize the potential of employees.

Human resource shapes the culture of any given organization. This is because, as a human workforce they are directly involved in the day to day activities of the organization. They embrace and establish a particular culture within an organization that ultimately characterizes its work's environment. With this understanding, HRM team who intends to bring change to the culture of a given company ought to roll out this process through the employees and by the employees recruited to the organization.

As Stegro plans to introduce a Japanese cultural orientation to the UK, they should be aware of the HRM practices. Practices such as training, recruitment, selection among others that are likely to impact the performance and stability of the organization in their attempt to establish a consistent and common culture like that practiced in Japan (Monden 2013, p.48). HRM practices can affect the behavior of employees that in turn creates values which shape organizational culture (Bewster 2014, p. 34). Because behavioral change reflects how an individual conduct oneself as a result of HR practices within an organization, it, therefore, follows that the development of sound HRM practices involving positive thinking can help to foster the establishment of an organizational culture that reaps positive results in the end.

Moreover, Stegro must embrace the best International Human Resource Management (IHRM) approach that would best help them replicate a Japanese workplace environment in the UK. The approach should be suitable and align well with the philosophy of the company. IHRM is an essential concept that every company intending to engage in international business must consider. It reflects the corporate management philosophy of a company that determines how it views the world in relation to itself as well as how it wants to manage human resources in foreign countries (Petrakis 2014, p. 19). Different companies adopt unique approaches that range from the ethnocentric, polycentric, regiocentric and geocentric approach. These four approaches all relate to staffing decisions that companies have to make to fulfill and develop effective human resource capabilities that can function within an international framework.

Of these four IHRM approaches, ethnocentric represent the best approach that will help Stegro company explore new opportunities in the UK market. This is because ethnocentric approach involves the use of staff from a parent country to occupy key positions in a company based in a foreign country. For this case, a perfect opportunity will be presented for the company to stamp its authority in the UK environment by deploying experienced managers from Japan to occupy key positions and thus effectively initiate and manage the development of a new organizational culture (Dowling 2008, p.24). They will establish this culture by managing employees through resourcing, performance and reward, training and development, employee relations and communication and maintaining equality and diversity. Each of these activities is discussed in the following subsections.

3.1 Resourcing

Resourcing will be an important aspect the company must consider in its attempt to transform the culture of the UK based SME. Recruitment and selection criteria of employees must reflect the ultimate goal of the organization to stamp its authority and initiate cultural integration (Mondy et al. 2005, p. 45). For this case, experienced staff from Japan should be selected to occupy key managerial positions within the company while also retaining the best managers from the host country to facilitate a smooth change over. The company will find new opportunities to exercise a new level of control by bringing new workforce from Japan who are motivated and committed to taking over the technological mandate of the London based company to the next level.

By bringing new employees from Japan, Stegro Company will face a cultural backlash from resident employees in the UK. This is because recruitment of employees in most UK small and medium-sized enterprises is usually done based on the qualification of the applicants. First, the positions are advertised and those selected are interviewed to determine their suitability for their new roles. This criterion sharply differs with that used in Japan where higher ranks and most vacancies are occupied with individuals who are within the company and understand well the culture of the organization (Martocchio 2015, p. 18). Resident employees may not welcome the idea of bringing foreign employees to work and partner together in their attempt to streamline the policies of the organization. The HR team from Stegro should be cognizant of this challenge and prepare in advance appropriate strategies that they will use to sensitize the employees in the host country.

3.2 Performance and Reward

The performance of every employee working in the company should be rewarded accordingly. Essentially the two companies have similar performance and reward system that ensures the employees are well compensated (Biswas 2013, 35). The UK SME have in place an efficient compensation and reward framework that in the past decade have helped the organization remunerate the workforce based on their performance. Also the UK SME has in place a monetary as well as non-monetary rewards offered to the employees to motivate them. As the new company takes over, it is recommended that the same system should be maintained while at the same time it should be broadened to include other reward packages such as flexible working hours, job sharing, incentivized performance, more opportunities for advancement and vibrant culture that fetches higher product...

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