ORG 535 Wk 6 – Practice: Global Environments

Aramex Grows into Global Success

Headquartered in Dubai, Aramex International is a leading global provider of logistics and transportation services. From humble beginnings in Amman, Jordan in 1982, the company expanded rapidly into a global brand recognized for its customer service and multiple product offerings. As business trends and arrangements encourage international trade, they also increase and change the demands on human resource management. Organizations that operate in foreign countries need to understand the laws and customs that apply to employees in those countries; prepare managers and other personnel to take international assignments; adapt HR plans and policies to different settings; and communicate policies and practices to an international workforce. As the following video demonstrates, Aramex focuses its business and HR practices to reflect its success and commitment to hiring, training, and retaining top performers in a global business setting.

Restructure, Outsource or Redesign?

Choosing a strategic direction and evaluating the effectiveness of HR are only the first steps in making an organization competitive in the global environment. The next step is figuring out how to improve human resources based on the strategy and issues that may have been raised during the evaluation process. The effectiveness of HRM can be improved in three main ways. First, a company may decide to restructure the HR function to increase its efficiency. Next, it may outsource certain areas to enhance cost and production effectiveness. Third, a company may reengineer or redesign current HR practices to deliver a higher quality of processes to customers.

In this exercise, please read the mini-case and answer the questions that follow.

Jordan Jacobs sat at his desk, relieved that he had finally completed the evaluation of HRM in his company Scranton, Inc., but concerned about his next moves. He had conducted an analytic approach review and discovered several issues with HRM that suggested there was room for improvement. First, he found that more money than necessary was being used on transactional tasks in the HR department, such as payroll and benefits administration. This was extremely frustrating to him, as he and his staff had already spent considerable time and expense in restructuring the staff and finding what they thought was the optimal approach. The evaluation also indicated that the current hierarchical organization of HR, which included the basic subfunctions of HR led by a director who reported to the Chief Human Resource Officer (CHRO), was not operating effectively. Under this organization, HR employees either focused too much on a particular functional skill (e.g., recruiting, compensation, training) or too much on a particular business unit (e.g., marketing, accounting, information technology). Lastly, the evaluation revealed that the performance management system currently in place was of very poor quality. The performance evaluations were inconsistent across the company and rarely provided feedback that was of use to the employees.

Based on the information presented in the case, what should Mr. Jacobs do with the transactional tasks such as payroll and benefits administration?

Hofstede’s Cultural Dimensions

The most important factor influencing international HRM is the culture of the country in which a facility is located. Culture affects employees’ worldview and the norms and values they hold. Culture has a pervasive influence on other important attributes of a country, such as its legal system, human capital, economic system, and political system. As a result, culture strongly determines the effectiveness of most HRM practices. This makes a thorough understanding and appreciation of culture key for managing human resources globally.

Hofstede’s classification of cultural attributes has become one of the most commonly used methods for understanding culture. He identified five dimensions on which various cultures could be classified: (1) individual-collectivism, (2) power distance, (3) uncertainty avoidance, (4) masculinity-femininity dimension, and (5) long-term—short-term orientation.

Carlos and Mary have just been assigned to work in foreign subsidiaries of their company. Carlos has worked in the headquarters of his company for five years and has now been given his first overseas assignment. Mary has just finished successfully turning around the struggling operations of one foreign subsidiary at her company and has now been tasked with doing the same in a different country.