Summative Assessment Sample: IHRM Strategy

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1. Introduction

IHRM is a vital consideration for multinational corporations having or intending to establish subsidiaries across international borders to effectively manage the workforce in the target country. Lizda Corporation based in the US intends to enter the Norwegian market with its electric charging stations due to high market demand but needs to consider the local cultural preferences and differences with the home country. This is important for planned expansion and IHRM strategy formulation for workforce management including recruitment and selection along with performance management.

2. Company Background and Objectives

Lizda Corporation is an American multinational company specialising in the manufacturing, sales and operations of electric vehicle charging stations positioned across public places. The organisation is headquartered in Sacramento, California and it aims to bring positive change worldwide for sustainability and convenience with rapid electric vehicle charging infrastructure across public places like parks and gas stations. The organisation aims to expand internationally initiating with Norway to capitalise on the growing market of EVs and friendly government policies.

3. Home country (USA) environment – External Analysis

The external market analysis of the USA indicates a lack of political control over business employment decisions and freedom regarding workforce management. However, considering Hofstede’s cultural dimensions, the weak labour unions in the country are justified due to the high individualism score of 60 indicating managerial accessibility for the workers and informal channels of communication. The power distance in the culture along with the uncertainty avoidance is low whereas the masculinity score is high indicating the decisiveness regarding competition and success-driven decisions.

4. Broad implications for HR strategies

Performance-oriented culture in the US with an individualistic orientation requires alignment with individual success and competitive desire. The HR managers are required to provide flexibility, involve the workers in decisions and participate in communication to match the power distance culture and individualism. Also, the short-term results are important in this regard due to uncertainty avoidance for providing more clarity and recognising individual performance with dynamic compensation.

5. Target country (Norway) environment – External analysis

Norway has very strong political control over working conditions and employee management with unionisation. Worker protection laws including holiday and holiday payments ensure employee rights and work-life balance in the country, whereas, the high individualism based on Hofstede’s cultural dimensions also suggests the demand for work-life balance and contractual employment relations. The power distance is lower establishing the need for egalitarian and flat organisation structures whereas the masculinity is very low indicating the focus on achievement through support and social solidarity while the uncertainty avoidance is normal.

6. Broad implications for HR strategies

The Norwegian external analysis informs the HR strategies Lizda to form a close association with the workers and worker unions for contractual agreements and integrating policies for improving collective gains. Also, the firm’s broad IHRM strategy implications include a focus on employee flexibility and work-life balance for compliance. Also, the establishment of a participative leadership and management approach with a flat hierarchy having two-way communication and feedback is important for engaging the workers in their unique cultural orientation. Herein, the work environment has to be optimised and the employee development opportunities need to be clarified for motivation and long-term growth.

7. Company internal environment analysis

Lizda has the strength of innovation and technological growth due to operating in the high technology sector experiencing fast growth. However, the company needs to improve its adaptability to achieve international expansion with responsive HR systems across different cultural orientations. Also, the firm is highly innovative and has the opportunity to gain international consumer preference and acceptance. Additionally, the improvement of the existing HR policies based on the integration of cross-cultural perspectives could pave the way for seamless IHRM scalability in the international subsidiaries.

8. Company adopting HR strategies in the fast-moving tech sector

The fast-moving technology sector requires Lizda to implement coordinated and agile talent acquisition strategies for hiring top talent and freshers alike for nurturing potential. The firm has the scope to implement learning and development programmes for workers to improve employer branding and long-term retention. Also, flexible working conditions and dynamic performance management are required due to the given trends of digitalisation. Performance-based compensation for workers is also required for acknowledging individual performance. Innovation and cultural integration are needed to improve employee engagement and satisfaction in the long term for loyalty and retention.

9. Similarities/differences of Home country vs Target country environment

The power distance is low in the US as the home country and Norway as the target nation; whereas individualism is high in both, indicating the preference for individual growth and rights and less distance with leaders. Labour rights and unions are stronger in Norway compared to the US, wherein the HR policies are stricter regarding employee welfare. Government and political intervention in employee management and uncertainty avoidance are higher in Norway than in the US, requiring greater compliance. Also, the US has a masculine culture while Norway is more feminine indicating the need to change competitive attitude and introduce cooperation.

10. Impact of analysis on Home vs Target market HR Strategies

Lizda during its expansion has to focus on individual performance management of the workers with predefined goals while providing generous compensation for their performance. Also, the HR strategies have to be modified to accommodate employee welfare and work-life balance with high flexibility and contractual employment considering the recommendations of the worker unions. A strict framework for leave policies and performance incentives has to be implemented whereas collaborative decisions regarding business decisions are to be integrated with a precedence for employee voice and opinion in Norway, compared to the US.

11. HR strategies

Lizda’s HR strategies include the recruitment of local talent by establishing partnerships with employment exchanges and technology universities for identifying potential. Also, the firm focus on worker compensation is the same as the US with performance incentives but requires additional team bonuses for long-term assurances and performance. Employee training and development is used extensively for competency development including expatriate involvement in employee management in new markets. The firm needs to transition from direct employee relationship management in the US to a collaborative and more unionised approach in Norway to establish consensus with geocentrism.

12. Centralised or Decentralised Strategy Approach Explanation

Establishing a hybrid strategy for HR strategy is recommended with a centralised approach for the power distance and individualistic similarities in the US and Norwegian culture. There is a scope for establishing standard core values and executing the mission and vision of the organisation’s systemic HR policies like employee involvement and autonomy. Whereas, a decentralized HRM approach is needed for regular performance management and employee involvement in decisions considering work-life balance and cultural adaptation to meet employee expectations; local talent management and legal compliance.

13. Integration and differentiation considerations

Lizda needs to achieve integration in HR policies to establish and maintain consistent vision and values globally. Also, standard performance expectations regarding product quality and innovation need to be set for the local and global talent. Additionally, differentiated structures for compensation focusing on individual performance and team achievements need to be formulated for Norway and flexible and structured working arrangements have to be established as an extension to the US model.

14. Strategy implementation considerations

IHRM strategy implementation will require a change management focus for cross-cultural integration across the US and Norway. This will require strategizing and regular communication with the workers to explain the causes and benefits of the policies for managing resistance and encouraging feedback. Also, HR policy alignment is necessary considering regular interactions among home headquarters and target subsidiaries for controlled implementation and identification of issues and improvement areas. Compliance assessment and monitoring regarding labour laws and worker welfare for long-term employee satisfaction and retention.

15. Summary

IHRM for Lizda Corporation requires hybrid adjustment for preserving some host country values and integrating some Norwegian customs. Local responsiveness to employee needs and political frameworks is vital while maintaining consistency in the global mission for sustainable living and vehicular convenience. Collaborative culture and group consensus along with individual performance recognition is important for succeeding in Norway. Continuous improvement and adaptation of the HR policies for recognising and responding to the unique market characteristics.

16. References

Armstrong, M. and Taylor, S. (2020). Armstrong’s Handbook of Human Resource Management Practice. Fifteenth Edition. London: KoganPage.

Bach, S. and Edwards, M.R. (Eds.) (2013). Managing Human Resources: Human Resource Management in Transition. Fifth Edition. Chichester: John Wiley and Sons Ltd.

Bratton, J. and Gold, J. (Eds.) (2017). Human Resource Management: Theory and Practice. Sixth Edition. London: Red Globe Press.

Brewster, C., Houldsworth, E., Sparrow, P. and Vernon, G. (2016)International human resource management. Kogan Page Publishers.

Daniels, J.D., Radebaugh, L.H. and Sullivan, D.P. (2019). International Business: Environments and Operations. Sixteenth Edition. Harlow: Pearson.

Edwards, T. and Rees, C. (2017) International Human Resource Management: Globalization, National Systems and Multinational Companies. Third Edition. Harlow: Pearson Education Limited.

Hofstede, G. (1984) Culture’s Consequences: International Differences in Work-Related Values. London: SAGE Publications.

Hofstede-Insights (2024) COUNTRY COMPARISON TOOL – Norway and US. Available at: https://www.hofstede-insights.com/country-comparison-tool?countries=norway%2Cunited+states [Accessed: 20 June 2024].

Qadir, S.A., Ahmad, F., Al-Wahedi, A.M.A., Iqbal, A. and Ali, A. (2024) Navigating the complex realities of electric vehicle adoption: A comprehensive study of government strategies, policies, and incentives.Energy Strategy Reviews,53, p.101379. Available at: https://doi.org/10.1016/j.esr.2024.101379

Reiche, B. S., Harzing, A-W., and Tenzer, H. (Eds.) (2019) International Human Resource Management. Fifth Edition. London: SAGE Publications Limited.

Reiche, B. S., Stahl, G. K., Mendenhall, M. E. and Oddou, G. R. (Eds.) (2017) Readings and Cases in International Human Resource Management. Sixth Edition: Routledge.

Stor, M. (2023) Human Resources Management in Multinational Companies: A Central European Perspective London: Routledge

Thomas, D.C. and Lazarova, M. B. (2013) Essentials of International Human Resource Management: Managing People Globally. London: SAGE Publications.

Trompenaars, F. and Hampden-Turner, C. (2012). Riding the Waves of Culture: Understanding Diversity in Global Business. Third Edition. London: Nicholas Brealey Publishing.

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