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Over the last few decades, the process of globalization has created unprecedented opportunities for global business investment and trade. Many multinational corporations are attempting to expand their international business by many entry strategies. Central Steel Door corps is also on the way to globalize and integrate. This company has been run for about 20 years; succeed in selling a line of steel industrial grade doors, as well as the hardware and fitting required for them. Unfortunately, when going into new market- Europe, the company’s traditional success in finding sales help has not gone smoothly. There are some serious mistakes in human resources management that the firm has met and judicious solutions to deal with those are necessary.
Four mistakes which the company has met.
There are four mistakes Mel fisher, president of Central Steel Door corps faced while attracting and maintaining qualified staff in Europe. One of them is irrational basis strategy, Fisher always use same way of expansion for all places: choose an area, establish a distribution centre, engage a regional sales manager, and then hand over authorities for these local manager. He forgot the fact is that each country or area has the differences in culture, social environment, intellectual standard of people, and working styles. Therefore same strategy can not be suitable for anywhere.
Recruiting advertisement strategies
Besides inefficient recruiting advertisement plan also created challenges for company’s expansion. Fisher decided to enroll local manager by advertising in International Herald Tribune. This method not only restrict the number of reader- only read by business people in Europe and by American expatriates, but it also represent a poor recruitment method- using Internet and newspapers only, despite of advantages of other media resources. Hence, although his ads placed in the Tribune’s Internet website for about one month, he so far has received 5 job applications. In there, one of them came from a possibly viable candidate while others seem has only experience in traveling.
Compensation package and benefits
On the other hand, compensation package and benefits are other factors to show mistake of Fisher’s decision clearly. He temporarily transferred two American sales manager to work into Europe and do not concern about changing their compensation package. Higher living expenses of Europe in general and Belgium, Germany in particular when compare with those in US make these people can not balance their pocket money. With the fixed amount of money in compensation package, it is unaffordable for people living there. Therefore, after several months, fisher was informed by the Belgian Government that his sales managers owed thousands of dollars.
Host countries’ laws
Finally, the fourth mistake can be seen from the trouble of Fisher with host countries’ laws. Due to the bad performance of staff in two distribution centers, he wanted to dismiss bout half of the employees. However, all of German staffs have had written employment agreement so he can not fire anyone after one year of contract. The shortage and unmindfulness made Fisher and his manager violate local authorities.
Above mistakes can cause many problems for Fisher’s corporation. If I were in his position, I would modify or change the whole human resources management because of its cardinal that defines the long term development and reputation of the company. At the beginning, I enhance the operation strategies. People always say that: “When in Rome do as Romans do” to emphasize the importance of learning other nations’ cultures, social conventions, working style etc. Doing business is the process of approach and satisfies what people wants and needs. Experience shows that employers who are unaware of such social norms faced greater difficulties in recruiting employees. Hence, businessmen need to understand the fundamentals of local people though and host countries’ cultures. In addition, business produces and behaviors are restricted by government regulation. To avoid the third Fisher’s mistake, it is admittedly that we have to build a good relation with government to enterprise swimmingly.
Furthermore, using effective advertising strategies will open more chances to find skilled labors. Beside Internet or newspapers, there are varieties of methods such as internal job posting, recruitment agencies, college interview and so on or doing as these corporations which want to set up new branch in Iran. Hiring qualified bilingual staff is often the most difficult challenges faced by multinational corporations in Iran. After advertising and employing, they consider hiring people who have quite stable skills and invest in training them more. These people both have knowledge about culture and local laws. It can help company run more efficient.
Last but not least, as the increasingly of living expenses, we would be best to control compensation packages flexibly depend on how high living standard of nation is. The related consequence for the low encourage pay system is main reason for staff’s job dissatisfaction. To illustrate, according to a survey in China recent years found that, the dominant reason for local Chinese staff to leaves their companies is to find a new job with high salary and better treat. Many foreign MNCs have realized this issues and establishing rewards and pay program to attract Chinese staff. Higher salary, bonus, fringe benefits, house fund etc help people have comfortable life and encourage them contribute for their company enthusiastically.
To sum up, there are various difficulties that Fisher’s multinational company operating the European market, especially his international human resources activities. It could be basis strategy, recruiting advertisement, treat in pay and compensation package or even law differences. These mistakes can prevent company’s success and reduce their reputation. Fisher should realize challenges and change effectively. It is valuable experience for all firms which want to develop their market.
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