SHRM and External Environment

Euro Disney Case

VKR, SOM
HRs changing Role
Environmental scanning, i.e. identifying and analyzing external opportunities and threats that
may be crucial to the companys success.
Supplying of competitive intelligence that may be useful in the long-term planning process.
Supplying information regarding the companys strengths and weaknesses.
The strengths and weaknesses of a companys human resources can have a determining effect
on the viability of the firms strategic options.
HR leaders Role in Strategy Execution
Design HR policies that drives competitiveness and competitive advantage
Positioning human resources to achieve strategic objectives
Design performance management systems which aims at accountability
Employees tend to skew goal statements, choice of performance measures, and actual
behaviors towards those results that are easiest to achieve, whether or not they truly enhance
organization performance
Regular evaluation of alignment between HR and strategy becomes necessary
Ethnocentric Management Orientation
The approach is basically what works at home, will work here.
Home country management style is imposed on the host country
This style of management is not favoured by the managers today
Example of a restaurant chain in Mexico or Hispanic country
Management team has to diversify and adjust in being flexible to accommodate the host
country's culture and employees norms and social relation in the workplace
Polycentric Management Orientation,
managers believe the foreign market to be too difficult to understand.
They remain host country centered.
Pepsi Cola operates in joint ventures in other countries.
Bringing individuals from other countries to the U.S., train them, and then allow them to work
Company probably finds this approach easier and safer, but managers may fail to learn much
about other cultures
Franchises such as McDonalds, Dominos Pizza, Kentucky Fried Chicken, Pizza Hut, and Burger
King follow this orientation
Regiocentric Management Orientation
Company believes the regional managers are best able to organize operations within the region.
Regional offices are at various locations, and report to a regional headquarters, and then to
headquarters.
Foreign automaker may establish companies within the U.S., but they do not generally micromanage
these foreign facilities, located in U.S. areas.
They rely on the regional offices to monitor production of the cars, and then report back to
headquarters.
The assumption is that the regional workers know their market better than others and they can strike
economies of scale
Geocentric Management Orientation
Management style focuses on both local and worldwide objectives.
The management style is interdependent.
Whirlpool is able to create a refrigerator from European insulation technology, U.S.
manufacturing and design, and Brazilian affiliates.
Geocentric management style, resources can come from virtually anywhere locally, or in the
world.
HR blunders
Miscalculation of drinking habits
Misunderstanding of Breakfast and food habits
Misunderstanding of vacation habits
Miscalculation of per capita spending
Miscalculation of transportation preferences
Voilation of French Labour laws
Underestimation of risk factors
Western Cultural Orientations (Geert Hofstede)
France United States
Strong Uncertainty Avoidance Weak Uncertainty Avoidance
Large Power Distance Low Power Distance
Feminine Masculine
Individualistic Individualistic
Power distance index (PDI): The power distance index is defined as the extent to which the less
powerful members of organizations and institutions (like the family) accept and expect that
power is distributed unequally. In this dimension, inequality and power is perceived from the
followers, or the lower level. A higher degree of the Index indicates that hierarchy is clearly
established and executed in society, without doubt or reason. A lower degree of the Index
signifies that people question authority and attempt to distribute power.
Uncertainty avoidance index (UAI): The uncertainty avoidance index is defined as a society's
tolerance for ambiguity, in which people embrace or avert an event of something unexpected,
unknown, or away from the status quo. Societies that score a high degree in this index opt for
stiff codes of behavior, guidelines, laws, and generally rely on absolute Truth, or the belief that
one lone Truth dictates everything and people know what it is. A lower degree in this index
shows more acceptance of differing thoughts/ideas. Society tends to impose fewer regulations,
ambiguity is more accustomed to, and the environment is more free-flowing
Masculinity vs. femininity (MAS): In this dimension, masculinity is defined as a preference in
society for achievement, heroism, assertiveness and material rewards for success. Its
counterpart represents a preference for cooperation, modesty, caring for the weak and quality
of life
Individualism vs. collectivism (IDV): This index explores the degree to which people in a society
are integrated into groups. Individualistic societies have loose ties that often only relates an
individual to his/her immediate family. They emphasize the I versus the we. Its counterpart,
collectivism, describes a society in which tightly-integrated relationships tie extended families
and others into in-groups.