FLEXTRONICS CASE STUDY 1
FLEXTRONICS CASE STUDY
FLEXTRONICS CASE STUDY
Human Resource Management of Multinational Companies is much more sensitive due to the wide range of varying influential factors for the their Human Resource Management, especially at a global scale. The changing demographics landscape, market and operation of a company in its entry into a new market brings a lot of challenges to the companies management. Flextronics is a perfect example of a multinational company that ventured into new market. This action by the company led to a couple of challenges due to contrasting multiple factors in these markets. This paper, therefore, aims to review the organisation Human Resource Management while focusing on diversity management, culture, international performance management and training and development.
This paper will, therefore, reflect on the managerial actions taken up by Flextronics company in the course of the company entry into the new markets. The paper also seeks to point out on the aspect of diversity management, culture, international performance management and training and development as the main managerial aspects in line with a company’s globalisation course. The paper will also focus on the assessment of critical theories and concepts which underpin this aspect on management with reference to the Flextronics case study.
Organisations course for globalisation has presented multiple challenges to business enterprises with the most significant ones being managerial challenges. This evident in the Flextronics case study where the company ventured into the Central and Eastern Europe markets. In this case, the company management faced a lot of challenges in its entry in Hungary these challenges entailed; high fluctuation, insufficiently experienced personnel and a high volatile sales market (Pagano 2007). These challenges, therefore, forced the company’s management to adapt to these factors in order to ensure a smooth transition into the new markets. The case study, therefore, emphasise on the need for diversity management in an organisation globalisation course.
In this age of globalisation, diversity management is a competitive advantage for any organisation. In line with this Bagshaw, 2004 claimed that diversity management opens greater access to improved organisation performance, cess to new markets, talented workforce and ultimately increase in profits and revenues. Thus, a better understanding of diverse tastes, needs and customer preference can only be achieved if the organisation management has embraced diversity management (Moon 2013). This aspect of organisation management in the course of an organisation globalisation course ensures that the organisation benefits from wider access to different business environment perspectives leading to better decision making and innovative ideas. Diversity management, in this case, fosters workforce diversity in an organisation which greatly improves the organisational performance. Workforce diversity is also an essential attribute for an organisation in its globalisation course. In line with this, the Society for Human Resource Management (SHRM) reported in the year 2010 that 76% of organisations worldwide had embraced workforce diversity as an organisation practice.
Peter Baumgartner lobby for the creation of Flextronics University can be pointed out as one case of diversity management for Flextronics Company in the case study. Hence, Peter Baumgartner keenly saw the present market constriction in Flextronics company entry into the Central and Eastern Europe market. Thus, as the manager; CEE, Executive Human Resource director he thought of adapting to these contrasting factors present in these new markets. Kalev, Kelly, & Dobbin, 2006 claimed that diversity management has a close relationship with improved business performance with the measure of increased revenues, market share, profits and revenues number of customers. Diversity management is; therefore, a central tenet improved organisation performance (McDonald 2007).
On the other hand, diversity management as seen in the case study has been seen as an essential aspect that fosters workforce diversity, workforce flexibility and adaptability and organisational performance. Diversity management is also likely to appreciate managerial strategies as a tool that fosters a company transition into a new market. Globalisation is claimed to cause transformation of the economy, society politics and invent influencing workplace demographics (Lüdi 2010).
This has, therefore, force organisation, in general, to adapt to these changes; in this case adopting diversity management. The global market symbolizes a new way of thinking for an organisation which have to be diverse due to the innumerable differences found in the global market scale. The scope of management diversity as evident in the case study entail different country’s employees, suppliers and customers. However, it is also notable that diversity management does not necessarily equate to a successful global market transition for an organisation, but it contributes greatly to the organisation course of overcoming challenges attributed to its globalisation course.
The rate at which the world is becoming a global village is increasing day by day. This is attributed to many businesses embracing globalisation. In this case, these companies have to embrace cultural diversity in order to shift to a different culture which will guarantee better organisation operation, workforce performance and transition into a new market.This has led to these organisations and business embracing cultural diversity with an effort to foster their operation in their entry into a new market(Griffiths and Arnove 2014).Cultural diversity has enabled business entities and organisation to share views, economic and business activities, technologies and social, political innovations, and local and global resources.
In this case study, Flextronics is keen to embrace cultural diversity in order to reduce some of the challenges it is facing its entry in the Central and Eastern Europe market, For instance, the company management has to acknoledge that there s a significant varying aspect in culture in difference countries. This is evident in the perception of awarding of certificate to its employees who pursue its Flextronics University course. Where in central Europe it is perceived as a sign of prestige while in Eastern Europe it is a qualification for a job appraisal.Understanding the difference in culture would, therefore, prevented the company from experiencing this particular challenges which has clearly affected its operation in the Eastern Europe market.
Due to the current growth and development of national societies and international contacts becoming increasingly common cultural diversity and organisation culture, in general, cannot be ignored in the business domain especially in their globalisation course (Kapferer 2010).Judging by the current business trend one will notice that corporation and governments are increasingly being involved in situations where organisation culture and cultural diversity is being embraced.
As evident in the case study, Flextronics’ lack of embracing organisation culture and cultural diversity to be precise came with many unforeseen problems. The company experienced problems in trying to reciprocate their local operation and company success in these new markets (Sonaiya 2013). The company also indirectly experienced challenges pertaining language barriers especially to new employees or those not fond of a particular language in the new market. On the other hand, an ordinary communication between two individuals who are from different countries which practice different culture is also another problem that the company faced regarding organisation culture and cultural diversity.This resulted due to the difference in practices, way of life and environment. For instance; it is common for tension and uneasiness which is caused by the difference in cultures to occur. Scollon and Scollon claim that the factor of organisation culture and cultural diversity lies on the organisation strategies while entering into a new market they also claim that organisation culture is entwined to the organisation management and operations (Griffiths and Arnove 2014).
Similarly, Flextronics would have used ethnocentrism a concept of culture to evaluate the culture of the new market where it was venturing into. This concept would help the company to note the unforeseen problem which came along with its entry into the Eastern and Central Europe market. In this case, ethnocentrism would be used in evaluating these countries culture and comparing them to the companies. Cultures is commonly the reason for the inability of two individuals from a different culture from understanding each other while communicating (Kapferer 2010). The ethnocentrism, in this case, creates a link that ensures that these parties are considerate of each other’s culture during their communication. Culture has proven to be a huge problem in orgaisation course on globalisation considering the cultural differences in this countries which has led to some organisation abandoning their globalisation course.
International Performance Management
International performance management involves a process where a multinational company is constantly evaluating its own performance and that of its employees in line with its pre-set goals and targets. International Performance Management acknowledges that there is no uniformity in all its subsidiaries due to environmental contingencies (Tett 2013). These competencies, therefore, form a huge contrast between an organisation parent and host country. International Performance management therefore acknowledges that the staffing models adopted in these subsidiaries in order to ensure that the organisation employees are best fitted for their allocated roles. In the Flextronics case study international performance management was not effectively used since there were some notable cultural idiosyncrasies challenges that occurred in the company’s globalisation course into its 30 subsidiaries in different countries.
Additionally, infectivity of Flextronics International performance management can is evident in its implementation of Flextronics University programme in its subsidiaries. This company programme was successful in some countries but in others, it failed terribly. Rather than improving the knowledge and skill level of its employees as intended by the company’s management, it led to increasing in employee’s job un-satisfaction and employee shifting to the company’s competitors (Muthukumar, Tamizhjyothi and Nachiappan 2013). This particular international performance management action by Flextronics management can be said to be ineffective due to its repercussions in some of its subsidiaries. This case study, therefore, reveals the essence of reviewing all international performance management activities depending on the location, culture and demographic factors.
This particular action taken up by Flextronics management is clearly in line with the goal of performance enhancement. However, the company was not considerate of the countries cultures which are clearly a hindering factor of this goal. Therefore optimising a company’ s productivity, motivation, efficiency and development will entail a lot of consideration of the effect of this goal to the company’s employees in its different subsidiaries and their response to its International Performance management come into play in such situations (Delbufalo, Appolloni and Cerruti 2013). In this case, it emphasises the need for adjustment of enterprises’ employee’s requirements and adaptability and various country’s law. International Performance management, therefore, analyses the variations and ability of a particular company’s proposed framework to work.
It is, therefore, evident that international performance management advocates for contemporary management with the consideration of high dynamics condition in the environment and strong development pressure which is fostered by growing competition and increased customer expectation. International performance management also evidently requires the organisation management to use proven comprehensive information in their decision-making processes. (Caliguiri, 2006) claims that international performance management emphasises on the use of managerial strategies due t the dynamic global environment which also calls for the implementation of Strategic Human resource management in organisations. Caliguiri (2006) further claims that there is a dire need for organisations to their human resource department strategically with consideration of their ability to fit into the global environment. The operation of multinational organisations is dependent on two distinct dimensions which entail; and geographic dispersion (Bhagwat, Chan and Sharma 2008). Through international performance management, these aspects are balanced through the decentralised and centralised approaches which all are beneficial to some extent. International performance management according to (Newlands and Hooper, 2009) ensures that an organisation Human Resource Management fits with an organisation strategies.
Training and development
Flextronics challenges in its globalisation to some level can be blamed on its training and development strategies in its entry into new market. In this case, the company evidently depended on the Flextronics University programme as its sole training strategy. In this case, the company would have adopted the international training and management development strategy. This is a training strategy that develops global managers and diversified teams (Allsop 2014). However, the implementation of this particular strategy entails the use of expatriation management. This strategy also entails the integration of international training and management strategies which improve on the employees work sills, behaviour and abilities for the future position or job.
(Dowlinget al.) claims that a multinational training and development plan has to focus on fostering a set of context-specific abilities which entail specific- industry knowledge and cultural sensitivity. He further claims that international training should be conducted to prepare both the organisation expatriates and national host employees for the international assignment. International training, in this case, entails preparatory training for expatriates, post arrival training for expatriates and training for both the host countries nationals and third-country nationals (Moletsane 2014). This particular training ensures that organisations employees are adequately prepared to work in a new environment from what they are used to. On the other hand, the organisation should ensure that it conducts on-site training for these employees. This particular training is essential in helping the expatriates familiarise themselves with the new environment and working procedures. Through training for host-country nationals and third-country nationals, the organisation will ensure that its employees familiarise themselves with the corporate culture and corporate strategy. For this particular training and development strategy, the organisation should employ an expatriate manager who will help with this particular training (Pasura 2014).
For the case of Flextronics the failure of its training and development plan which entirely dependent on the Flextronics University programme shows the need for organisation to adopt more than one training and development strategy in its globalisation course. The failure of this training and development plan especially in the company Eastern Europe market where it was miss interpreted and ended up causing more problems to the organisation is a clear indication of the consequences that a company might suffer if it depended on one training and development strategy(Storm 2008). In this case, the company would go with the expatriate training option ad its training and development strategy due o the evident cultural barriers in the Eastern Europe market which have proven to be a constraint in the organisation transition into this market.
It is clear that most companies globally have embraced globalisation in an effort to increase their company’s revenue and profit margin. However, this has resulted in quite a lot of challenges especially in the new market where these companies have tried to break into. For a smooth transition, this companies have been forced to consider observation of some theoretical concepts which guarantee a smooth transition into this market. They include; diversity management, culture, international performance management and training and development. However, these theoretical concepts have to be strategically adopted in order to ensure that there are minimal arising challenges in the course of its adoption.
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