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HUMAN RESOURCE IMPLICATIONS OF FOREIGN CORPOROWNERSHIP
Case Study 1- Toivonen Paper in The U.S.A-
ByMuzaphar Noman
Zakarya Ameen
BFT507
LEADERSHIP & STRATEGIC HUMAN
RESOURCE
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Case Summary
How to Achieve organizational harmony in foreign corporate ownersh
Scott WilliamsTreelin HR Manager
Jim NewmanTreelin Plant Manager
U.S.A
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Case Summary
How to Achieve organizational harmony in foreign corporate ownersh
Marja KempainenSenior VP of HR
Finland
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Current Situation
Toivonen Treelin
Fortunes Global 500 organization.
High Quality Products: Publication and fine
paper, packaging board and wood products
Group-level outcomes
work group hiring
Avoid uncertainties.
caring for employees needs.
High fixed costs
Inconsistent demand
High volatility of raw materials prices.
Efficiency rates (lower than industry stan
Old facility paper machines.
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Toivonen V.S TreelinHuman Resource Policies
Toivonen Treelin
Long-Term Employment relationships.
Centralized compensation.
Employee Career Advancement.
work group hiring
Follow corporate Structure to give decision.
Complex Organization
Budget and Production Emphasis
Performance Appraisal.
Stagnant Employee Positional
Movement.
Selected and hired by supervising manag
Independent decision making.
Flat organization style
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Hofstede Cultural Dimensions
Hofstede cultural dimension is explain the following principles:
Power distance: Degree to which members accept an uneven distribution
Individualism / collectivism: See oneself as individual rather than part o
Uncertainty avoidance: Extent to which people seek to avoid, or feel thr
ambiguous or risky situations
Masculinity / femininity: Look to what motivates people, wanting to be t
(masculine) or liking what you do (feminine).
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Finnish VS. U.S CultureBased on Hofstede Cultural dimensions
Indexes U.S. Finland Diff (U-F) Observations
Power Distance 40 33 7
(Smallest index difference)
Finish firms prefer flatter organizations and smaller wage d
American firms.
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Finnish VS. U.S CultureBased on Hofstede Cultural dimensions
Indexes U.S. Finland Diff (U-F) Observations
Individualism 91 63 28
(High Difference)
Finish firms are more likely to focus on the collective than Am
work will tend to be organized by groups and bonuses deliv
performance
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Finnish VS. U.S CultureBased on Hofstede Cultural dimensions
Indexes U.S. Finland Diff (U-F) Observations
Masculinity 62 26 36
(Highest Difference)
Finish firms (and leaders) will likely be more concerned w
wellbeing and social responsibility than their American
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Finnish VS. U.S CultureBased on Hofstede Cultural dimensions
Indexes U.S. Finland Diff (U-F) Observations
Uncertainty
Avoidance
46 59 -13 The difference may lead to Finish firms to have HR polic
stability, security where rules are more clearly est
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Finnish VS. U.S CultureBased on Hofstede Cultural dimensions
Indexes U.S. Finland Diff (U-F) Observations
Pragmatism 26 38 -12 The difference may lead to Finish firms to focus more on
results and have strong concern with establishing th
management rules to save for the future.
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Finnish VS. U.S CultureBased on Hofstede Cultural dimensions
Indexes U.S. Finland Diff (U-F) Observations
Indulgence 68 57 11
(Small index difference)
Finish firms have lesser willingness to realise their impulses
American firms.
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1:If you are the Group Human Resource Manager from Toivonen, Finland, howyou develop your HR action plan ?
Objective Action pla
To Introduce strong commitment to maintain long-term employment relationship . Substantial changes to H
To focus on group level outcomes than individual outcomes. Finnish culture strongly
To ensure good communication on the teams and between levels in mills. Work structure changed
directed teams
To implement a self-directed work teams. Therefore, most performance problems can be
handled at the team level.
Eliminated the performa
appraisals.
To Implement training and development programs that would provided all of a quality training
on topics of importance to the firm.
More focus on employe
To centralized compensation system to include global job evaluation system with salary ranges
determined by continent.
Narrower salary ranges
entirely adopted by Tre
To lower the absenteeism rates and sick time taken off by employees overall. Unlimited sick time
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2:What are potential problems and pitfalls you foresee occur when implemeToivonen' s corporate culture in Treelin? Develop your HR contingency pla
There are potential problems and pitfalls resulting from different HR policies in bothand Treelin which we can summarize them into:
Long-Term Employee Benefits vs. Budget and Production Emphasis.
Centralized Compensation vs. Performance Appraisal Compensation.
Employee Career Advancement vs. Stagnant Employee Positional Movement.
Complex Organization vs. Flat Organization.
Follow Corporate Structure vs. Need for Independent Decision-Making.
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2:What are potential problems and pitfalls you foresee occur when implemeToivonen' s corporate culture in Treelin? Develop your HR contingency pla
There are potential problems and pitfalls resulting from different HR policies in bothand Treelin which we can summarize them into:
Long-Term Employee Benefits vs. Budget and Production Emphasis.
Centralized Compensation vs. Performance Appraisal Compensation.
Employee Career Advancement vs. Stagnant Employee Positional Movement.
Complex Organization vs. Flat Organization.
Follow Corporate Structure vs. Need for Independent Decision-Making.
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:Evaluate the changes in human resource policies and practices William shanticipate coming from Toivonenspurchase of Treelin? If you are William, w
proactive measures would you take?
The changes in human resource policies and practices William should anticipate comToivonenspurchase of Treelin could be the following:
Substantial changes to HR Policy will be applied to befit with Toivonen working
Toivonensculture will be strongly applied as a corporate culture foreign companas a local subsidiary.
Work structure changed to self-directed teams to accompany Toivonenswork st
Performance appraisals will be eliminated since employees will be working in selteams.
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3: Evaluate the changes in human resource policies and practices William shanticipate coming from Toivonenspurchase of Treelin?If you are William, w
proactive measures would you take?
There will be more focus on employee needs as employees career advancement.
Flat organization structure will possibly remain.
Toivonenssalary policies (especially ratio between highest and lowest employeea competitive disadvantage for Treelin.
Unlimited sick time will be applied, to lowered the absenteeism rates and sick timoff by employees overall.
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:Evaluate the changes in human resource policies and practices William shanticipate coming from Toivonenspurchase of Treelin? If you are William, w
proactive measures would you take?
Proactive measures that I would take if I were Scott William are as followed:
Offer preliminary analyses & (perhaps) recommendations to ToivonensHR.
Offer review history of Treelin (special emphasis on HR policies and how they fit
strategic plans of the previous owner & the key success factors of the paper indu
U.S.).
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:Evaluate the changes in human resource policies and practices William shanticipate coming from Toivonenspurchase of Treelin? If you are William, w
proactive measures would you take?
Offer a preliminary assessment of the potential challenges that could emerge as T
starts taking over the operations of Treelin (special emphasis on HR this should
starting point for a cultural fit study/assessment to be developed in the short-te
Prepare a potential preliminary HR action plan to be adjusted according to the n
changing polices.
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4:Lets change this case into another scenario (Finland VS. Indonesia). Will theimplications action plan and contingencies differ? Explain these factors in de
O If the scenario changed to the Finish Toivonen acquiring the Indonesian Aisa PuYes, the suggested action and contingencies plans will be differ. That is because tplans were designed to help Toivonen to suit to the dimensions of the American into the Indonesian culture.
O According to Hofstede cultural dimension theory there will differences on cultur
dimensions in both Toivonen as a corporate culture foreign company and Aisa Puas a local subsidiary as shown in the following table:
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Indexes Indonesia Finland
Power Distance 78
High
33
low
Individualism 14
collectivist
63
Individualist
Pragmatism
62
pragmatic
38
normative
Indulgence
38
Restraint
57
indulgent
Masculinity 46feminine
26feminine
Uncertainty
Avoidance
48
High preference for avoiding
uncertainty
59
High preference for
uncertainty
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O Four major issues should be taken into consideration when designing HR actiocontingency plans for Toivonen to disperse its corporate culture to local subsid
Indonesia , which are :
1. Toivonen should develop its plans to tune with characterises of the Indonpower distance style which totally contradicted to its low power distance
2. Toivonen should develop its plans to reduce the friction with characteriscollectivist Indonesian culture which totally contradicted to its Individua
3. Toivonen should develop its plans to be adjusted to the pragmatic Indonorientation which totally contradicted to its normative orientation.
4. Toivonen should develop its plans go along with the restrained Indonesiawhich is totally contracted to its Indulgence culture.
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Thank You
Any Question ?
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Questions for GE CaseO Develop and discuss a specific career
development plan to produce competent
CEOs in General Electric.
O As a group HR professional consultantsrecommend and illustrate HRM initiatives for
General Electric to ensure retention of
competent strategic leaders.