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CULTURALLY
COMPATIBLE
HUMAN RESOURCE
STRATEGIES
 

This Report Is a Collaborative Effort Of:

(MB-08-12)

(MB-08-16)

(MB-08-06)

(MB-08-20)

(MB-08-61)

(MB-08-75)

(MB-08-33)

Iqra Khan

Sidra Ghazanfar

Zoya Chaudhry
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Kokab Khalid

Mudassir Khalid

Sher Afghan

Faizan
 
 

REPORT SUBMISSION

With Due Respect We the Group Members Submit


This Human Resource Report to Our Instructor of
Human Resource Management

Madam Bushra Baig


 
 
 
 
 
 
 
Mianamir2009@gmail.com

 
 
 
PREFACE
This report reviews the Human Resource
Management (HRM) of Telenor, the second largest
telecom company in Pakistan. We give a brief
history of the company and tell about the
corporate human resource of Telenor primarily in
Pakistan. It put light on the culturally compatible
HR strategies of the organization around the
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globe. Telenor is a multinational company that has


set up its operations in Europe and Asia. This
report puts light on the specific Hr strategies,
policies and practices of Telenor that makes it
culturally compatible in different nations. We
start our consideration with the theoretical
knowledge of culturally compatible HR strategies
giving some real life case studies of leading
multinational & transnational organizations. In the
end we conclude with our recommendations for
global organizations.

 
 
 
 
 
 
CULTURE
“Culture is the customs and civilization of a particular people or
group”
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CULTURAL COMPATIBILITY
“It is the capability of different cultures to live together
harmoniously.”

When an organization goes global and sets up its operations in some


other country, it faces a totally different culture of that particular
location. This local culture is their in the attitudes, work styles,
demands and perceptions of the local human resource. A globalizing
organization thus has to make its home culture compatible with the
local culture in order to survive in the local market. The new
transnational environment requires a plethora of individuals who can
work internationally – who are ultimately flexible, accommodating,
and adaptable to different cultures and varying ways of doing
things. Those organizations who effectively pursue culturally
compatible HR strategies actually achieve success in long-run.

Studies on the success or failure of individuals in an international


setting have indicated that American expatriates experience a
failure rate of 30 to 40 percent as compared to many Europeans and
Japanese, whose failure rate has been estimated as low as six
percent (Tung 1988). It appears that some countries or cultures are
more effective at producing successful global professionals than
other countries.

ORGANIZATIONAL STRUCTURES FOR GLOBAL


BUSINESS
There are 4 main organizational structures for global business:

1) Domestic exporter - heavy centralized


activities in one country (financing, sales,
marketing, human resources, strategic
management) while sales are dispersed using
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agency agreements, and subsidiaries that are


reliant on the home company. i.e. Caterpillar Corp.

HR STRATEGY:

Domestic exporters just have to rely on the sales staff


of local area; therefore they adjust the HR policies
regarding the pay scales, skills required and evaluation
for sales personnel only.

2) Multinational firm - control and management of


finances out of central home base, while
production, sales and marketing operations are in
other countries. Products are made to fit local
markets i.e. financial firms, General Motors etc

HR STRATEGY:

Multinational firms have to set their HR strategies for


the employees of all departments according to the
culture of respective firms. Here the budget of the
firms is being set in home base while the pay scales as
well as incentive plans & benefits are the core
discretions of national firms.

3) Franchisers - product is created, designed and


financed in home country, but for product-specific
reasons, there is a heavy reliance on foreign
personnel for production, marketing, and human
resources. i.e. McDonald's, KFC

HR STRATEGY:
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Franchisers are just like multinational firms with the


only difference that multinationals create the whole
separate set up for all national campuses while the
franchisers follow the strict policies and strategies of
HR being pre-set by the home base. However franchises
may carry out specific HR plans as per the local cultural
adjustments but within a restricted provision of base.

4) Transnational firms - have no national home


base, have several regional home bases, and
optimize supply and demand constraints locally,
central core for decision making, but dispersed
power and financial power to the divisions. i.e.
Citicorp, Sony, Ford

HR STRATEGY:

Transnational firms retain the freedom of decision-


making in determining its own HR strategies. Such
strategies follow the cultural adjustments in the best
interest of company. Such HR strategies are fully
coated with local cultural essence that gives the firm a
new home environment.

CULTURAL COMPATIBILITY AND HUMAN


RESOURCE MANAGEMENT
 
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Human resources or, as some would call it, human capital, is


becoming the most important asset for most organizations in the
world. As the New Economy pervades in the world’s communities and
organizations, it becomes necessary to study and pay close attention
to the impact of Globalization and Technology in shaping today’s
strategy for managing culturally diverse human resources.

Globalization has resulted in significant implications for HR


functions as they attempt to develop global HR strategies and
design programs and processes to manage a global workforce. The
key to success is to balance global standardization and local
autonomy.

The challenge for Human Resource leaders is really to understand


the role of Human Resource Management in an organization
competing in a global business environment and effectively define
the critical issues and responses necessary in implementing a
strategic Human Resource Program.

Studies on the success or failure of individuals in an


international setting have indicated that American
expatriates experience a failure rate of 30 to 40
percent as compared to many Europeans and Japanese,
whose failure rate has been estimated as low as six
percent (Tung 1988). It appears that some countries or
cultures are more effective at producing successful
global professionals than other countries.

Moore (2003) argues that there are 10 countries that


produce the largest number of “good” global managers:
Canada, the Netherlands, Switzerland, Belgium, Ireland,
Sweden, Denmark, Singapore, Australia, and Finland.
According to Moore, what these 10 countries have in
common is their size. While they are not dominant
powers in their geographic regions, they are considered
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significant players on the international stage. These


middle-economy countries face the everyday reality that
they are not the most important culture in their region
and thus they find themselves constantly negotiating
between their own culture and identity and that of
surrounding dominant cultures. In order to be
successful, individuals growing up in mid-sized countries
learn to embrace multiple ways of looking at the world.
They grow up with a duality (or plurality) that obliges
them to work effectively with their neighbors. It is this
ability to be “all things to all people” that helps such
individuals to be successful in a global context. “When
working on global teams or in other countries, the ability
to think outside your own culture and see an issue
through the eyes of another is critical to success”
(Moore 2003)

In the field of psychology considerable work has been


conducted on people’s sensitivity to intercultural issues
and their ability to adapt to other cultures and
different ways of doing things. Some organizations have
moved to personality testing to better ascertain the
likelihood of success of individuals working in an
international environment.

GLOBALLY ORIENTED CULTURE


Much has been written on the influence of culture and global
orientation on business. These “deeply ingrained assumptions,
generalizations, or … images that influence how we understand the
world and how we take action.”

An ethnocentric mindset is one that basically holds one’s own values,


beliefs, and culture are intrinsically superior to those of others.
Ethnocentric individuals interpret the world through the eyes of
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their own culture, not recognizing, even devaluing, cultures that are
different from their own. “If it works here, it’ll work anywhere,”
exemplifies the ethnocentric individual. Ethnocentric can play an
important role in preserving standards and uniformity across the
global corporation.

A polycentric mindset is one that adapts and assimilates to the


values, attitudes and beliefs of another culture. Because they are
highly attuned to the conditions and expectations of other cultures,
polycentric individuals can play the role of empathetic “advisors,”
effective at bridging the gap and transferring knowledge between
the local environment and corporate. The danger with the
polycentric mindset is the tendency to “go native”, sometimes to the
detriment of the organization’s objectives.

A geocentric mindset is one that believes there are certain cultural


universals and commonalities in the world and that no culture is
superior or inferior to another. The geocentric mindset accepts the
premise that bright people [do] bright things around the world”
(Sullivan 2001). Also called “cosmopolitans,” these types of
individuals focus on “finding commonalities and spreading universal
ideas and juggling the requirements of diverse places” (Kanter
1995).

GLOBALIZATION vs. CULTURAL IDENTITY


It is fair to say that the impact of globalization in the cultural
sphere has, most generally, been viewed in a pessimistic light.
Typically, it has been associated with the destruction of cultural
identities, victims of the accelerating encroachment of a
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homogenized, westernized, consumer culture. This view, the


constituency for which extends from (some) academics to anti-
globalization activists (Shepard and Hayduk 2002), tends to
interpret globalization as a seamless extension of – indeed, as a
euphemism for – western cultural imperialism.

Into this world of manifold, discrete, but to various degrees


vulnerable, cultural identities there suddenly burst (apparently
around the middle of the 1980s) the corrosive power of
globalization. Globalization, so the story goes, has swept like a flood
tide through the world’s diverse cultures, destroying stable
localities, displacing peoples, bringing a market-driven, ‘branded’
homogenization of cultural experience, thus obliterating the
differences between locality-defined cultures which had
constituted our identities.

WEST VICTIMIZING EASTERN CULTURE

Though globalization has been judged as involving a general process


of loss of cultural diversity,

some of course did better, some worse out of this process. Whilst
those cultures in the mainstream of the flow of capitalism – those in
the West and, specifically, the United States – saw a sort of
standardized version of their cultures exported worldwide, it were
the cultures of the developing world that have been most
threatened. Thus the economic vulnerability of these non-western
cultures is assumed to be matched by a cultural vulnerability.

GLOBALIZATION PROLIFERATES CULTURE

Cultural identity is at risk everywhere with the depredations of


globalization, but the developing world is particularly at risk. But
another, quite contradictory, story can be told: that globalization,
far from destroying it, has been perhaps the most significant force
in creating and proliferating cultural identity. To take just one
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example, Manuel Castells devoted an entire volume of his celebrated


analysis of ‘The Information Age’ to the proposition that: ‘Our world
and our lives are being shaped by the conflicting trends of
globalization and identity.’ For Castells, the primary opposition to
the power of globalization lies in ‘the widespread surge of powerful
expressions of collective identity that challenge globalization on
behalf of cultural singularity and people’s control over their lives
and environment’ (1997: 2). Far from being the fragile flower that
globalization tramples, identity is seen here as the up surging power
of local culture that offers resistance to the centrifugal force of
capitalist globalization. The impact of globalization thus becomes,
more plausibly, a matter of the interplay of an institutional-
technological impetus towards globality with counterpoised
localizing forces. The drive towards globality combines logic of
capitalist expansion with the rapid development of deterritorializing
media and communications technologies. But this drive is opposed by
various processes and practices expressing different orders of
‘locality’.

GLOBAL-LOCAL CULTURAL STRATEGY OF HR

In a global-local strategy, cultural differences amongst employees


can be seen as a strategic advantage for cross-border learning
capabilities and the flexibility of the company.

This policy can be summarized as follows:

“As much global integration as possible, as much local adaptation as


absolutely necessary.”

Hewlett-Packard manager illustrated the


direction in one sentence:

“We want one solution for the world rather than 54 country
solutions. We optimize at the company rather than the
country level.”
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IBM, on the other hand, values a regional


differentiation in their human resource policy. They
believe in making exceptions, in flexibility in the area of
deployment even as far as differentiated
standardization:

“This is the span needed to bridge the political and cultural


gaps,

especially between westernized corporate cultures and Asian


country cultures” (Begley/Boyd

2001).

CROSS-CULTURAL DIFFERENCES AND HR


A growing body of research has emerged over the past decade
looking at cross-cultural differences in negotiation style [Fisher
1980; Tung 1984]. These studies conclude that people of different
cultures use significantly different negotiation approaches. These
different approaches include:

communication styles used

Persuasion strategies employed

Protocols followed.

CROSS_CULTURAL CONFLICTS:

Negotiation studies all point to possible differences in the way


conflict is viewed and managed, little attention has been paid to
differences in reacting to cross-cultural conflicts in negotiations.
Yet, the handling of conflict is critical to any effective cross-
cultural negotiations.
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When two parties negotiate in a joint project, buyer/seller


relationship or any other business context, conflict inevitably arises
[Habib 1987]. It may arise because of differences in the
perceptions of the decision making environment, or preferences for
particular actions, behavioral styles and/or goals between the
parties [Fisher 1974]. How the parties respond to conflict also
depends on a number of factors, including the nature of the
conflict, the cultural orientation of the individuals, and the
affiliation of the parties. It is clear that how the parties perceive,
respond to, and choose to resolve conflicts is critical to the success
of any long-term business relationship. Individuals from different
cultures are known to adopt different conflict resolution strategies.
Ting-Toomey [1988] proposed that members of collective cultures
perceive and manage conflict differently from those in
individualistic cultures.

INTRA- VERSUS INTER-CULTURAL NEGOTIATION


STRATEGY

There is no consensus on whether decision makers extend their


domestic negotiation styles to negotiating with cross-cultural
partners. Managers may assume different negotiation styles with
parties of another culture to seek greater cooperation [Graham
1985].

When dealing with members of a foreign culture, a


manager may try to adopt behavioral patterns similar to
the other party. The negotiators who appear similar may
be more attractive to the other party and, thereby,
enhance the bargaining outcomes (see review by Evans
[1963]; Rubin and Brown [1975], and Francis [1991]). A
business deal is a business deal, and profit maximization
knows no cultural boundaries.

 
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DEVELOPMENTAL MODEL OF INTERCULTURAL SENSITIVITY

Milton Bennett’s Model of Intercultural Sensitivity provides a


useful roadmap for understanding the acquisition and maturity of
individual cultural awareness. and global orientation. Bennett (1993)
postulates a development progression that that all individuals go
through as they develop into geocentric or cosmopolitans (see
Figure 13). As individuals mature globally, they move from the
“ethnocentric” stages of denial, defense, and minimization to the
“ethno relative” stages of acceptance, adaptation, and integration.
Other empirical work has demonstrated that the more international
experiences individuals have, the less ethnocentric they become
(Guy and Beaman, forthcoming). Hence, associates who have reached
the ethno relative stages of their individual development – those
with geocentric mindsets – are vital for the new chaordic,
Transnational HR organization to function effectively.

COLLECTIVISM/INDIVIDUALISM

The differences between the Chinese and North American culture


are well documented.

COLLECTIVISM:

The Chinese culture is collective and of "high


context."

Collectivism emphasizes group harmony and


interdependence.

Chinese negotiators dislike taking the initiative and


normally pay more attention to maintaining a harmonious
relationship
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When successive efforts within the inner circle fail,


the conflict is likely to be met with resolute force by
the authorities

PRC executives were also found to be more


dichotomizing (i.e., inclination to classify the world into
extremes-black or white, evil or good

In their decisions, more likely to consult their


superiors

motivation for favoring certain norms over others is


also driven by cultural factors

Societal norms are known to reward those who


subscribe to them and punish those who deviate

HR STRATEGIES

• In two-person, buyer-seller simulations, it is more effective


to use competitive (domineering) strategies to negotiate with
Chinese.

• avoid open conflict, and when a conflict emerges, it must be


resolved in inner circles before it becomes serious enough to
justify public involvement.

• avoid potential conflicts and smooth over issues.

• use delaying tactics

• use more obliging and avoiding conflict resolution styles

• maintain relations as key motivators in their negotiation


strategy

INDIVIDUALISM:
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The North American culture is individualistic and of


"low context”

Individualism emphasizes individual rights and


independence.

American negotiators tend to be authoritative,


autocratic and in a hurry to make a deal

American executives are less dichotomizing

less decisive

American executives emphasize personal motivations


(Self-Esteem, Position In Company) or situational
explanations as key motivators

HR STRATEGIES

• in two-person, buyer-seller simulations, it is more effective


to use problem-solving integrative strategies to negotiate with
Americans

• use less obliging and avoiding conflict resolution styles

• show more concern for goal achievement

• individuals be responsible for all decisions by themselves.

• Turning to superiors for instruction on ordinary conflicts,


particularly task-related conflicts could signal incompetence
at one's level of responsibility

Here, a case study on conflict resolution concerning Chinese and


Canadian culture would more elaborately describe it.
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CASE STUDY: CONFLICT RESOLUTION


STRATEGIES OF CANADIAN AND
CHINESE EXECUTIVES
Executives from two cultures-Canadian and People's Republic of
China (PRC)-were asked to respond to conflict in the context of a
joint project negotiation scenario. They responded under two
conditions-when the potential partner firm was from their own
culture and when the firm was from the other culture. Each
executive evaluated potential partner firms that would likely cause
two different types of conflicts- "person" related and "task"
related-using in-basket decision scenarios.

The study used a 2 (Country: Canadian and PRC executives) by 2


(Culture-Intra versus Inter-cultural) by 2 (Conflict: Person-related
versus Task-related conflict) experimental design. This study
differs from existing literature by studying:

(1) How executives from collective and individualistic cultures react


to conflicts in joint projects

(2) How intra- and inter-cultural negotiations differ

(3) How person-related and task-related conflicts generate


different resolutions by executives of collective and individualistic
cultures

CONCLUSION

This study confirms that home culture orientation (collectivism


versus individualism) affects executives' responses to conflicts.
Executives from countries which differ in this cultural dimension
tend to adopt different strategies to resolve conflict, develop
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different expectations about possible outcomes, and be motivated


by different causes.

The collectivist/individualist orientation was also found to affect


social rules used to maintain group harmony. A superior is
responsible for maintaining an effective balance between
subordinate human relationships and corporate goals, and in China
the superior/subordinate relationship usually has been. This study
found that being from a different culture does not place one in a
disadvantageous position in negotiation. Executives from both PRC
and Canada used the same conflict resolution strategy and were
motivated by the same underlying factors regardless of the culture
of the potential partner. While this may put international
negotiators somewhat at ease, by lending support to the
globalization of business norms, the finding may be situation
specific.

This study found that person-related conflicts elicit different


responses compared to task-related conflicts. Regardless of
culture, person-related conflicts seemed to invite negative, more
relation-oriented (versus information-oriented) responses, and
appeared to be less satisfying, if more controllable, than task-
related conflicts, treated with caution. Executives from different
cultures may tend to assume different strategies during such
processes.

 
CASE STUDY: GERMAN INDUSTRIAL
INTERPRISES
A few years ago it was typical to give one’s subsidiaries a free rein
and send managers overseas from headquarters only. But today a
great deal depends on overcoming this one-way street and in looking
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for and employing the best-suited managers, regardless of their


origins. What contributions can human resource management make
towards a company’s global orientation – an area in which local scope
and latitude are traditionally very high.

This is a study on German industrial enterprises named


“DEVELOPING GLOBAL HUMAN RESOURCE STRATEGIES” by
Hans-Erich Mueller. It shows that in recent years German industrial
enterprises have re-aligned the management of their executive
staff. Cornerstones of this quiet revolution are a policy of
worldwide parity of executives in evaluation, remuneration and
development, greater participation of those with line responsibility
from product areas and regions in strategic development, as well as
a re-alignment of human resource instruments. Worldwide
standards in human resource policy are key factors in the
competition for qualified managers. Not only companies, but also
executives need to adjust.

“Do you have worldwide HR policies, that is, policies that apply to all
employees regardless of location?”

This is one of the central questions underlying interviews with HRM


executives of the twelve largest German manufacturers, which took
place between the summer and fall of 2000. This includes the
largest German companies excluding trade, banking and insurance, as
well as energy suppliers according to the Business Week Global
1000, 12 July 1999

GLOBAL INTEGRATION :

The same worldwide standards for senior management in evaluation,


compensation and development are the milestones en route towards
a global human resource strategy, which has only caught on in recent
years at German companies like BASF, Bayer, DaimlerChrysler,
Henkel, Lufthansa, SAP, Schering, Siemens, and Volkswagen.
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Henkel sees itself as a leader in human resource policy, both within


and beyond its own areas of business, one which brings about more
equality of treatment and fairness, so that qualified executives can
commit themselves to the company and participate in its success.

Deutsche Telekomand Preussag (the former steel manufacturer-


turned tourism giant), who have recently become more international
in their orientation, are just now in the process of preparing
themselves for a cross-border, integrated human resource policy.
The autonomy of the newly purchased overseas companies has been
substantial so far. Bertelsmann, where deployment has traditionally
been decentralized, has just begun a more integrated policy for
senior management. Lufthansa in the Star Alliance network, too,
participated recently for the first time in creating a sound
foundation for a global executive management scheme.

FOUR ALTERNATIVES FOR A CROSS BORDER STRATEGY

Local Adaptation:

1) International Strategy:

Appropriate when there is little


foreign business – knowledge transfer
from the center of headquarters.

Coordination costs are low.

2) Multinational Strategy:

Affiliates are autonomous and local


adapted.
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Cross-border advantages of
standardization and learning are low.

Coordination-costs are lowest.

Global Integration:

3) Global Strategy:

Advantages of standardization of
policies and practices.

Strong centralism.

Lack of local responsiveness causes


disadvantages.

National segmented markets,


cultures, policies set barriers

Coordination costs are high.

4) Transnational Strategy:

Uses advantages form globalization,


localization and cross-border learning
simultaneously.

Coordination costs are highest.(see


Bartlett /Ghoshal 1998)

Companies successful across borders with corporate headquarters


in Germany have pursued a more globally integrated human resource
strategy

CONCLUSION
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In recent years, many of the largest German companies have


completed the change towards a transnational strategy for senior
management: Worldwide guidelines with enough flexibility to adjust
to local situations, a global “as far as possible” with local
responsiveness and interpretation of criteria, as well as a network
of systems development contributing to global integration (see fig).
The drivers of this transformation are adjusted company strategies
and structures, the lack of qualified senior executives for global
competition and the fact that managers have staff in many
countries. Additional impetus has come about by a change in the
expectations of executive managers and their desire for equality of
treatment.

The consequences: changes in the expectations placed on senior


management – broader and greater international experience and the
dissolution of traditional centers of power, which the headquarters
had offered previously.

CASE STUDY: LEADING CHINESE


TELECOM CORPORATION – HUAWEI
Huawei was established in 1988 as an IT product trading firm
in Shenzhen. Its internationalization drove since 2001, now it
is serving ¾ of the top 50 IT operators in the world. HW has
representation offices in over 100 countries and over 1 billion
users. It is now employing over 60,000 employees, 48% of
whom working in R&D.

BUSINESS STRATEGY:

Innovation
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High quality

Low cost

Excellent customer service

GLOBALIZATION STRATEGY:

Less developed countries first, then developed


countries

Occupy market first (loss-making) then make profit


through maintenance and upgrades

MOTIVES OF OVERSEAS EXPANSION:

Market seeking

Asset seeking

HR STRATEGY:

Deployment of Chinese expatriate to set up


operations first

Localization to overcome language and cultural


problems, also to show commitment to local economy and
observation to local labour law – deployment of social
capital

HW’S GLOBAL HR STRATEGY AND CHALLENGES IN


PEOPLE MANAGEMENT

HR challenges:

The Hr challenges faced by HW include the retention problem


due to lower pay than western companies. Another challenge
being identified was the low competence of local employees in
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poor countries (low literacy and project management skills).


There were also cultural differences in work values of other
countries. HW faced many cross-cultural issues between
Chinese expatriates & local employees. And there was lack of
identification of local employees with HW’s corporate culture
or HW as their employer.

HW’s adopted HR strategies:

HW promotes local employees to ranks which they will not get


in western companies. They introduce local practices to suit
local employees (e.g. bank loan guarantee letters). They carry
out cross-cultural team building through social events. They
also adopt the strategy of sending key local employees to
HW’s HQ for training and development. HW does the
deployment of locals as deputy managers to look after
personnel issues because the locals know the people-related
issues well. Hw believes in learning by doing in developing HR
practices to suit local needs, e.g. borrow western companies’
good HR practices. In addition to the practical strategies
being adopted by HW, they deploy emotional intelligence in
understanding local employees needs and provide support as
well.

CONCLUSIONS

HW’s HR strategy is characterised with high-performance


work system and paternalism typical of oriental culture.
Creation and mobilization of social capital of employees plays
an important role in supporting HW’s global business strategy.
Mobilizing political capital is crucial for Chinese organizations
to develop international markets, esp. in emerging economies

CULTURAL MISALIGNMENT
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In many cases cultural misalignments are a byproduct of major


organizational change initiatives, such as total quality management,
employee involvement or reengineering. Each of these initiatives
typically requires some cultural adjustment to be effective, even
though they all seem to have similar goals, such as treating
employees as critical assets, focusing on customer satisfaction and
delegating authority broadly. Even when the optimal culture for
supporting these initiatives has been identified and agreed to, the
difficulties associated with making adjustments to the current
culture must still be dealt with.

IMPLEMENTING GLOBAL HR
STRATEGIES
"Top-level managers in many of today's leading corporations are
losing control of their companies. The problem is not that they have
misjudged the demands created by an increasingly complex
environment and an accelerating rate of environmental change, nor
even that they have failed to develop strategies appropriate to the
new challenges. The problem is that their companies are incapable
of carrying out the sophisticated strategies they have developed.
Over the past 20 years, strategic thinking has far outdistanced
organizational capabilities.

“Today, people create national competitiveness, not, as suggested by


classical economic theory, mere access to advantageous factors of
production. Yet, human systems are also one of the major
constraints in implementing global strategies. Not surprisingly
therefore, human resource management has become "an important
focus of top management attention, particularly in multinational
enterprises.
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The clear issue is that strategy (the what) is internationalizing


faster than implementation (the how) and much faster than
individual managers and executives themselves (the who). "The
challenges [therefore] are not the 'whats' of what-to-do, which are
typically well-known. They are the 'hows' of managing human
resources in a global firm.

How prepared are executives to manage transnational companies?


How capable are firms' human resource systems of recruiting,
developing, retaining, and using globally competent managers and
executives? A recent survey of major U.S. corporations found only
six percent reporting foreign assignments to be essential for senior
executive careers, with forty-nine percent believing foreign
assignments to be completely immaterial.

Which firms are leading in developing globally competent managers


and executives, and which remain in the majority and lag behind?
That majority, according to a recent survey of 1500 CEOs, will
result in a lack of sufficient senior American managers prepared to
run transnational businesses, forcing U.S. firms to confront the
highest executive turn-over in history.

By contrast, it describes the approaches of some of the world's


leading firms that distinguish them from the majority. There is no
question that the world business is going global; the question raised
in this article is how to create human systems capable of
implementing transnational business strategies. Based on their
research, the authors support the conclusion of the recent 21st
Century Report that of executives who perceive their international
operations as shelves for second-rate managers are unsuited for
the CEO Job in the year 2000, or indeed any managerial job today.

CROSS-CULTURAL COMPETENT HR
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Transnational managers must learn about many


foreign cultures' perspectives, tastes, trends,
technologies, and approaches to conducting business.

Unlike their predecessors, they do not focus on


becoming an expert on one particular culture.

Transnational managers must be skillful at working


with people from many cultures simultaneously. They no
longer have the luxury of dealing with each country's
issues on a separate, and therefore sequential, basis.

Similar to prior expatriates, transnational managers


must be able to adapt to living in other cultures. Yet,
unlike their predecessors, transnational managers need
cross-cultural skills on a daily basis, throughout their
career, not just during foreign assignments, but also on
regular multi country business trips and in daily
interaction with foreign colleagues and clients
worldwide.

Transnational managers interact with foreign


colleagues as equals, rather than from within clearly
defined hierarchies of structural or cultural dominance
and subordination. Thus, not only do the variety and
frequency of cross-cultural interaction increase with
globalization, but also the very nature of cross-cultural
interaction changes

Review a range of global business strategies along with each


strategy's requisite managerial skills.

 
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EFFECTIVE HR STRATEGIES IN
GLOBALIZATION
RECRUITING, DEVELOPING AND RETAINING QUALIFIED
MANAGERS

Qualified managers have become a bottleneck factor in


international competition. Cross border

and interdisciplinary experience is expected and not always


available. In addition, loyalty to the company has depreciated.
Headhunters are poaching the best people. How do companies with
international experience handle this problem? Corporate itself is
addressing the subject, human resource instruments for executives
are realigned creating a winning employee value proposition.

INCORPORATING GLOBAL KNOWLEDGE

Executives should see themselves as drivers of a common corporate


culture. They travel more, send e-mails around the world,
participate in tele-conferencing, familiarize themselves with
business magazines and business schools and, in short, are part of
knowledgeable and mobile elite. This is reason enough for former
barriers to disappear, allowing questions about comparisons and
equity to emerge. The new media make the flow of information and
communication around the world possible. But how and to what
extent this new media can be employed in the development of an
integrated global executive strategy also depends on the individual
strategy and corporate culture. Company networks and very
decentralized structures seem to hinder global standardization,
whereas a growing international business
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Responsibility frees a substantial and powerful drive. Finally, the


degree of integrating business areas and the regions will differ.

REALIGNING PERFORMANCE AND COMPENSATION SYSTEMS

An improved integrated human resource management is the answer


to changes in the company’s strategies due to increased
globalization. The starting point includes basic values and guidelines
being worked out and formulated by international teams and the
appropriate tools. The goal is to increase the global standardization
of appraisal and compensation systems for executives and at the
same time to incorporate local qualities.

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REPORT
ON
CULTURALLY COMPATIBLE
HUMAN RESOURCE (HR)
STRATEGIES
 

“We believe growth comes from truly understanding the needs of


people to drive relevant change”

COMPANY PROFILE

Telenor Group

Telenor ASA is an international provider of high quality


telecommunications, data and media communication services. It
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ranks as world’s 7th largest mobile operator with a total of 164


million subscribers in its mobile operations.

Telenor Pakistan

Telenor Pakistan is 100% owned by Telenor ASA and adds on to its


operations in Asia together with Thailand, Malaysia and Bangladesh.

Telenor Pakistan launched its operations in March 2005 as the


single largest direct European investment in Pakistan, setting
precedence for further foreign investments in the telecom sector.
The company has crossed many milestones and grown in a number of
directions, making Telenor Pakistan a leading telecom operator of
the country.

Telenor is the fastest growing mobile network in the country, with


coverage reaching deep into many of the remotest areas of
Pakistan. In the most difficult terrains of the country, from the
hilly northern areas to the sprawling deserts in the south, at times
Telenor is the only operator connecting the previously unconnected.

It is keeping ahead by investing heavily in infrastructure expansion.


With USD2 billion already invested, it has extended agreements
with its vendors for network expansion and services until 2009. The
agreements, with a potential to result in USD750 million worth of
orders from Telenor Pakistan, are some of the biggest of their kind
in the industry.

Telenor is spread across Pakistan, creating 2,500 direct and


25,000-plus indirect employment opportunities. It has a network of
23 company-owned sales and service centers, more than 200
franchisees and some 100,000 retail outlets.

 
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VISION OF TELENOR

Telenor’s vision is simple: “We're here to help”

It exists to help its customers get the full benefit of


communications services in their daily lives.

CORE VALUES OF TELENOR

Make it Easy
We are practical. We don't complicate things. Everything we
produce should be easy to understand and use. Because we never
forget we're trying to make customers' lives easier.

Keep Promises
Everything we set out to do should work, or if it doesn't, we're here
to help. We're about delivery, not over promising, actions not words.

Be Inspiring
We are creative. We strive to bring energy to the things we do.
Everything we produce should look good, modern and fresh. We are
passionate about our business and customers.

Be Respectful
We acknowledge and respect local cultures. We do not impose one
formula worldwide. We want to be a part of local communities
wherever we operate. We believe loyalty has to be earned.

STRUCTURE OF THE ORGANIZATION

In TELENOR the hierarchy is very lean, in general the whole setup


is centralized, all the matters are to be reported to the main
company and all the policies and targets are approved at the higher
level. But at the department level the structure is decentralized.
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► TELENOR has following functional departments:-

Technical

Customer operations

Finance

Administration & Procurement

Human Resource

Co-ordination (Govt. relations)

Marketing

►Current CEO (Chief Executive Officer) of TELENOR is John Eddy


Abdullah

HUMAN RESOURCE DEPARTMENT

HR department of Telenor is in Islamabad head office where it


controls and handles all the HR activities of Telenor.

VICE PRESIDENT

MANAGER

DIRECTOR

EXECUTIVE

ASSISTANT MANAGER

INTERNEES

►Human Resource department’s

hierarchy is as follows:-
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►Current VC (Vice President)

HUMAN RESOURCE of TELENOR

is Ms. Nayab Baig

GLOBAL PRESENCE

Europe

Norway

Telenor’s wholly owned Norwegian mobile operation is the country’s


leading telecommunications operator

• Services: Broadband, Mobile, Telephone, TV

•Companies: Telenor Norway, Canal Digital, Conax,


Norkring, Telenor Satellite Broadcasting

Denmark

Sonofon is the second largest mobile operator in Denmark

• Services: Broadband, Mobile, TV

• Companies: Sonofon, Cybercity, CBB, Canal Digital

Sweden
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Telenor is the third largest mobile operator in Sweden

• Services: Broadband, Mobile, Telephone, TV

•Companies: Telenor Sweden, Bredbandsbolaget,


Glocalnet, Canal Digital

Finland

Canal Digital is Finland’s leading television distributor

• Services: Broadband, TV

• Companies: Canal Digital

Hungary

Pannon is the second largest mobile operator in Hungary

• Services: Broadband, Mobile

• Companies: Pannon

Montenegro

Promonte has more than 450 000 mobile subscriptions in


Montenegro

• Services: Mobile

• Companies: Promonte

Serbia

Telenor is the second largest mobile operator in Serbia

• Services: Broadband, Mobile

• Companies: Telenor Serbia


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Ukraine

Kyivstar is the largest mobile operator in Ukraine

• Services: Mobile

• Companies: Kyivstar

Russia

VimpelCom is the second largest mobile operator in Russia

• Services: Mobile

• Companies: VimpelCom

Asia

Pakistan

Telenor is the second largest mobile operator in Pakistan

• Services: Mobile

• Companies: Telenor Pakistan

Bangladesh

Grameenphone is the largest mobile provider in Bangladesh

• Services: Mobile

• Companies: Grameenphone

Thailand

dtac is the second largest mobile operator in Thailand

• Services: Mobile
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• Companies: dtac

Malaysia

DiGi is the fastest growing mobile operator in Malaysia

• Services: Mobile

• Companies: DiGi

CULTURAL COMPATIBILITY AROUND THE GLOBE IN


TELENOR

The best way to see the cultural differences depicting in the work,
performance, perceptions, attitudes, behaviors and even statements
of HR of different nations, is to observe the views given by
themselves in their interviews. Following is such an interview that
was taken by two employees of Telenor relating to two different
cultures and two different nations.

• Name: Lawrence Ooi

• Position: Head of Sales, Central Region

• Company: DiGi

• Location: Kuala Lumpur, Malaysia

Q: Describe briefly a typical day at your work


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I am responsible for the sales in the central region of Malaysia, which is the
area around Kuala Lumpur. This region accounts for 50 percent of the total
sales in Malaysia. There are approximately 6000 dealers nationwide. I need
to make sure that all our 3000 dealers have enough supplies, that we reach
our sales targets and that our brand has a prominent position in the sales
outlets. I have weekly meetings with my sales staff to maintain the overview
and keep myself updated on new telecom product launches and promotion
efforts. I also am required travel to the other regions to get new impulses
and see what our competitors are doing.

Q: Why did you join the Telenor Group?

Before, I worked for a telecom company that had a really strict hierarchy
and too many rules and regulations for my taste. So I wanted to find a new
job in the telecom industry. I had heard a lot of positive things about
Telenor, so when my current position became available – I applied and got
the job

Q: What are the best parts of your work?

It is fruitful to work with many skilled people and help them to reach their
goals. In addition, when good ideas are developed into strategies, it is very
interesting and challenging to execute it and see how it progresses.
Moreover, there are no barriers in DiGi as you get to voice out your opinions
and all suggestions are taken into account before plans are being formulated

Q: How would you describe Telenor’s work environment?

It is a great atmosphere here, and our facilities are open and modern. We
are given the flexibility to work where we like, and manage our own time

Q: If you should choose one word to describe Telenor, what would it


be?

Dynamic! This is a very dynamic company. We find solutions quickly to


problems that arise. Unlike other companies in which policies are set, plans
are derived and execution is expected. In Telenor, we get to set our own
strategies.

Q: Can you describe a special event that you especially enjoyed?


Mianamir2009@gmail.com

We had a prepaid registration drive last 2 years and my team had to patrol
all dealers outlet in Central region at the last minute before midnight to
ensure we registered as many subs as possible. The next morning, had a
breakfast meeting with Johan (CEO) and committee for an update session
and planned on further action to execute. It was a truly remarkable
experience as I got to work with people of all levels to complete a simple yet
important task

Q: Describe your career in Telenor so far

This is my first position in Telenor, which I have had for three and a half
years now. Time passes really fast, and I feel that my career is developing
rapidly, especially due to the several development programs I get access to
through Telenor. I find that the financial workshops and leadership sessions
I have attended enables me to perform better in my job.

Q: What are your professional goals?

I like the responsibility and the challenges being a manager, so I would like
to develop myself further as a leader and take on bigger tasks in the future

Q: What do you enjoy doing in your spare time?

I like to spend time with my wife and children. We often go on longer trips in
the weekends to go shopping, try new food and relax on the beach. Penang
Island is one of our favorite locations.

My hobby is to collect recyclable paper bags from grocery stores. The


diversity fascinates me. They come in all shapes and colors. I have several
hundreds paper bag at home, from all over the world. My wife is not too
happy about that, though…

• Name: Miljana Kijanovic

• Position: Internal Communication Manager

•Company: Telenor Group Headquarters and Telenor


Serbia
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• Location: Oslo, Norway

Q: Briefly describe your job at Telenor

I work with internal communication – in short, that means I am part of the


team that provides employees with the information they need in their daily
work as well as news about the company. Currently, I am part of the editorial
team in the Group Communications department in Norway. Previously I
worked as head of the internal communications staff in Serbia. Group
Communications at Telenor ASA felt that it would be useful to get different
views on internal communication based on my experience of working for a
Telenor operating company in another country. So, here I am in Norway. This
is an exciting opportunity for me and the recognition is important. At the
same time, I am pleased to see that people in Telenor are aware of the
differences that exist across a big international company and are ready to
listen and learn more.

The job I have now does not differ much from the one I had before. Just as
in Serbia, we start the day summing up recent events and news stories.
Then, we plan forthcoming activities. I still write articles and stories for our
intranet portal, which is something I enjoy doing. Besides that, I am involved
in the development of the new intranet, which will be used by tens of
thousands of employees worldwide. Being even a small piece of the puzzle in
a complex project like that is exciting.

Q: Why did you join Telenor?

I used to work for Mobtel, the Serbian telecommunications provider


acquired by Telenor in 2006. It was a change for me suddenly to be a part of
an international telecommunications group. The way we do business now is
quite unlike my previous experience. But it has certainly changed for the
better. We were used to a strict – well, old-fashioned hierarchy. That is not
what it is like at Telenor. It does not matter whether you are a manager or
not - everyone sits side by side in the office. That is quite unusual for
Serbian companies.

Q: What has your career at Telenor been like so far?


Mianamir2009@gmail.com

I have been in the telecommunications sector for over 10 years now, and
tried several interesting jobs. My first position with Telenor was also my
first role as a manager and an important opportunity for me. The job I was
doing there brought me to Norway, where I now have the chance to continue
working within my profession and at the same time learn how things look and
work from a different perspective.

Q: What do you enjoy most about your work?

Internal communications is a new profession in Serbia, so I was fortunate to


have the opportunity to be one of the pioneers and set the standards. During
a recent Public Relations conference in Belgrade, I held a presentation in
front of a wide audience about internal communications

Q: How would you describe the work environment at Telenor?

When I started to work with Telenor in Serbia, we had just moved into a
new building, located in the new part of Belgrade. Our Belgrade offices have
a cool, modern design. Everyone enjoyed the benefits that make it an
attractive place to work, such as free refreshments and massage chairs.
Now, I know the concept is the same here, in Norway. The Telenor
headquarters – just outside Oslo - at Fornebu, has an incredible position just
by the sea. The view over the fjord is different from the grey urban
landscapes I was used to. I also admire the Telenor art collection, both here
and in Belgrade.

Colleagues are the most important part of any work environment. I miss my
colleagues in Serbia, our discussions about work, but also the time we spent
together out of the office. Still, I am forming new friendships and getting
to know new people in Norway. Although there is a similar work culture
across Telenor, there are differences in our native cultures that make
working together interesting, sometimes challenging, but certainly enriching
for all of us. Working and living in another country and a new environment,
enables me to develop not only professionally, but also as a person.

Q: If you had to choose one word to describe Telenor, what would it


be?
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Actually, I would choose two important words: freedom and responsibility.


At Telenor, you are given the necessary tools to do your job, but you are not
told how to perform your tasks. For instance I have flexible working hours,
and can take my laptop down to the lake during the summer to enjoy the sun
while I am working. We have a lot of freedom - as long as you produce the
results. I really value this freedom.

Q: Can you describe a special event at work that you particularly


enjoyed?

I was part of the committee responsible for planning and organizing our one-
year anniversary in Serbia in 2007. It was a big event with activities for
both employees with families, as well as external partners and others
interested in celebrating this milestone. We had an outdoor party with a live
DJ, puppet theatre for the children, sports activities, and a lot more. It was
a great success! Everyone loved it.

Q: What are your professional goals?

I want to develop my career with Telenor further, and strengthen my


internal communications and branding competence. I was tempted to explore
international opportunities and I still am. It really exposes you to new ideas
and viewpoints and helps to open your mind to new ways of doing things

Q: What do you enjoy doing in your spare time?

I like to be active and I enjoy sports. Rollerblading and skiing are my


favourites, so I really look forward to the skiing season in Norway. I also
love the gym and I often go to the one at Fornebu – as an employee here I
have almost free access. The gym is located at the offices, which is very
convenient.

OBSERVED DIFFERENCES

The difference in the statements of the two is quite obvious; one is


a woman other is a man. Another difference is that they work in
two different cultures of nations. It is a fact that cultural
differences make difference to the HR practices. It isn’t necessary
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that what is valuable to one culture man is also valuable to other


culture’s man.

It is observable that the lady is answering to all the


questions very descriptively while the man is answering
precisely and to the point

Both of them switched to Telenor from another


telecom company. The lady switched it because she
wanted to work in an internationally recognized company
while our Malaysian friend didn’t like the strict
environment of former company.

The lady got promoted due to her learning and the


man got promoted through workshops.

The lady has the professional goal to work


internationally while the man wants to move vertically
upward to managerial posts.

The typical European lady is very sporty while the man


is truly Asian and want to spend spare time with his
family

The lady loves recreational activities at work while


the man enjoys work related activities.

OBSERVED SIMILARITIES

In short the cultural differences are quite obvious through their


priorities, likings and dislikings. However the company based ideas
are completely same like

Both joined Telenor impressed with its freedom of


expression
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Both are provided the career opportunities

Both are given the environment compatible to their


cultures so that they may not feel the odds.

Both have described their company Telenor in the


same sense of goodness.

Both have described their work environment as free,


respect giving as well as responsible.

These similarities are the result of Telenor’s culturally compatible


environment being provided to its human resource.

HUMAN RESOURCE STRATEGIES

We discuss Telenor’s strategies which make it culturally compatible


to the human resource of different countries where so ever it has
set up its operations. Following are these strategies:

RECRUITMENT:

Telenor claims “ FREEDOM OF EXPRESSION”

The hiring criterion in Telenor is same throughout the


globe. However due to changes in the skills, knowledge
and abilities of people in different countries , Telenor
has varying staff hiring priorities eg here in Pakistan
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university education is quite common and cheaper as


compared to western countries. Pakistan has a pool of
graduates and post-graduates, so obviously more
educated and skilled person is hired whereas in western
set ups Telenor has mostly graduates in job positions.

Telenor hires young and talented people more as


compared to experienced elderly in Asian countries. It is
due to the fact that the creativity and freshness
required by service sector like Telenor is found in only
young talents in Asia. The middle aged people in Asian
countries are less enthusiastic and fresh. However
people in western countries remain enthusiastic and
fresh for a relatively longer period of time. 80% of
Telenor’s staff is young blood.

GENERAL SET-UP

There is a lot of respect given to all employees. Here


the manager shakes hand with the mop. All the
employees self-serve themselves. They are not allowed
to make the service men work in their service

There are no cabins in any Telenor centre. There is a


central lobby where the front desk men to the Regional
Officer (RO) all sit together.

As a cultural symbol Pakistani Telenor offices have


placed a big bell with a string on the main door of
offices. It is for the purpose that any one who feels
himself satisfied with Telenor can ring the bell. It is in
coincidence with the practice of Late Mughal King
Jahangir who used to listen to the petitions of his sub
ordinates whoever has any complaint.

TRAINING
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Training system is much vibrant in European Telenor


set-ups. But owing to the lesser revenues generated in
Asian markets, Telenor is not carrying out best training
here. Training is always ignored in Pakistan by all.
However Telenor keeps on conducting one day training
for its employees throughout their work life.

JOB DUTIES

Telenor is carrying out equal and uniform strategies


everywhere. Its job duties and their requirements are
same. It offers flexible work hours to all employees in
its customer’s service call centers. There is no
discrimination on gender base in Telenor.

The reward system is same everywhere. Everyone is


rewarded on good performance in monetary units as well
as recognition and applaud.

All employees working in Telenor along with their


family members are medically insured. They can get up
to 10 lakhs on medical treatment. Owing to the more
health problems among aged in Asian countries, Telenor
prefers to retain young and healthy employees. In
western countries mostly young people are medically
tested for maladies.

There are no pension plans in Telenor. There are


provident funds provided in Telenor.

CULTURAL COMPATIBILITY

Telenor do value the culture of its transnational bases


eg in Pakistan Telenor has the policy to send its 2
employees on Hajj every year
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Telenor arranges aftar for its staff in Ramzan.

In the last annual meeting of Telenor, They have


decided sherwani as the dress code in Pakistan.

Even in inter-province culture differences, the


example of Quetta is interesting where employees aren’t
asked to wear suits. They wear shalwar kameez

CONFLICT RESOLUTION

Referring to the Denmark issue created in Pakistan


against Telenor, its HR had no impact due to this
controversy. Not a single employee felt against Telenor.
It was a great achievement of Telenor that it got in the
shape of loyalty and concern of its HR towards Telenor.

CHALLENGES

Telenor face many challenges with the ever growing need of


competent Human Resource. It is really hard to hire and retain the
best people especially around the globe. The global companies face
many challenges regarding the cultural identity of respective
nations. They have to adjust culturally to the environment of
respective countries. And when even hiring the HR staff of that
very country, the organization is exposed to many challenges to
make them perform at their best.

CONCLUSION
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By keenly analyzing the Human resource Management of Telenor, we


the group members agree that Telenor is carrying out satisfactory
culturally compatible strategies for its HR. Although it is not
promoting the “cultural identity” agenda that aggressively but even
then it is facing much less cultural conflicts among its HR. It may be
due to the reason that it has divided itself in just two markets:
Europe & Asia. The European market almost holds the same culture
and three of its Asian market countries are Islamic. We came
through very unusual facts about managing any company’s HR. We
believe that managing a competitive and culturally compatible HR in
a competitive global market is a tough job. And Telenor is so far
quite successful in hiring and retaining exceptionally talented HR
worldwide.

COMMENTS

As students of human resource management, among other things, we


believe that the globalization and the advancement of technology
influences how organizations should react and adjust to the
changing times and economy. Every company will have to find its own
route – and this will depend on the situation and will be different
for executive management and specialized staff. The decisive
turnaround within today’s human resource policy appears to be in
the replacement of both local autonomy and the home country
preference. We will not seek to deny the obvious power of
globalized capitalism to distribute and promote its cultural goods in
every corner. Nor will we take up the argument now very commonly
made by critics of the cultural imperialism thesis that a deeper
cultural impact cannot be easily inferred from the presence of such
goods. What we will try to comment is something more specific: that
cultural identity, properly understood, is much more the product of
globalization than its victim.
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RECOMMENDATIONS

We as students of HRM can just recommend global companies (in


this case Telenor also) within the sphere of our knowledge,
exposure and literature survey. WE recommend that:-

A worldwide audit of IHR (International Human


Resource) programs and plans should be conducted at
least every three years as a matter of course. While
guidelines and an approval process help management
navigate through obvious change, subtle changes within
the company, local market practice, legislation, and
employee demographics can erode programs’
effectiveness over time. Multinational pools are
particularly subject to degrading without continuous
corporate sponsorship and should also be re-evaluated
periodically.

Each organization must decide whether it has the


right people in the right places to make the changes,
whether these people have been adequately trained,
given the necessary resources and focused on the right
objectives, and whether they believe they will be
rewarded for their contributions. HR strategy must be
consistent with the needs of the organization, and its
component strategies must provide alignment with the
organization's objectives.

Human resource strategies can be powerful tools for


signaling cultural change and reinforcing those changes
once they are made. Who is hired and retained, how
people are paid, and what behaviors are deemed
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desirable all send strong messages about the desired


culture. The potential of HR strategies and programs for
shaping organizational culture cannot be overestimated.
For HR strategy to realize its full potential, the
organization must first determine what its culture is and
what it should be. Then the organization can create a
plan for aligning culture with its mission and
environmental or contextual realities by managing the
culture from what it is to what it should be.

We wish a very best of luck to TELENOR. May it progress and


achieve its desired goals. (AMEEN)

OUR VISIT

ISLAMABAD HEAD OFFICE TELENOR

WE THE GROUP MEMBERS IN TELENOR OFFICE MULTAN

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