The LVMH Moet Hennessy Louis Vuitton Organisation
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Published: Mon, 5 Dec 2016
LVMH Moet Hennessy Louis Vuitton is France based organisation dealing with at least 50 brands such as art, design, fashion etc. Company deals in their business in all states of the worldwide in several brands of fashion, design, art even in retailing. They manage approximately 60000 employees in order to operate around 1500 hundreds of stores worldwide. Company is going to reach to lead the most luxury brands of the world followed by their human capital deployment in order to their skills and better performance of company and their grateful employees. LVMH had to suffer from lake of human resource practice in their past international business experience. In the era of competition LVMH must develop and improve managerial skills with attracting managers with global competence.
In this report I am going to explain HRM models, Learning and Development strategies, and Recruitment and Selection policies. And I will try to apply and compare all the tasks with LVMH organisation case study.
TASK – I HRM Models
HRM model usually used for reward system of the company to encourage their employees in particular effectiveness.
Best Fit Model:
According to intelligentsia Best Fit method is followed by the Harvard, Michigan and new York models. When HR strategies are linked with its surrounding context or environment of the business, it might get more reliable or we can say efficient. Best fit model defines as of two types’ external fit and internal fit. The fit of the model linked with competitive strategies of the overall organization or business is called external fit model. Major drawback of the external fit model is some organisations manage more than two products or we can say all-round business so HR practices are uncomfortable to depend on one strategy. HR managers should think widely and with flexible mind. On other hand internal fit practice is coherent modules. Internal fit practice used to avoid defensive statement of the policy. HR managers should mind very well that method should be in fever of the business organisation.
Best Practice Model:
Best Practice model is the HR method which includes universal, flexible and positive effects on organisational performance. In addition Best Practice model is also known as high performance work practice method (Johnson 2000). Delaney and Huselid (1996), Best Practice model of HRM based to enhance the overall performance of employees with the boarder limit of an organisation.
In Best practice method jobs would intend to ensure elasticity, promise and enthusiasm, including steps to ensure that workers should use their awareness and skills to keep responsibility and independence in their task. As far as communication concerned with Best Practice model, it would to make sure that a two-way process of the method keeps everyone entirely up to date. Best Practice method also follows some employee motivation programs that would be like employee share ownership programmes it is actually beneficial for firms to increase workers responsiveness on the economic presentation of their activities of the implications.
Resource based HRM:
The basic idea behind resource based view of spirited merits in the strategy field is strategic HRM have a natural similarity (Barney, 1991; Grant, 1991). Promoter of the resource based model dispute that one can originate the persistent aggressive advantage in the firm’s resource based view, and in that way draws attentiveness to the inner working of the firm. The resource based model produced an integrating opinion or surroundings for most of the work in strategic HRM over the past decade (Delery, 1998; Wright,Dunford &Snell, 2001).
The human resource policies adopted by LVMH are more than enough and they impose a risk to the business groups and firms. The duties of the corporate human resource are to standardize and exemplify new ways for the work force. It also helps in strategic management.
The workers in the group of companies have to report to the headquarters of the group. Overall 45 to 65% of the control is by the company and rest is managed by the corporate groups.
There are four categories of HR managers at LVMH. At the same time, their operation has also been divided into four categories namely regional, corporate, business and company level. Four types of managers manages LVMH’s HR department. They are used to following the group’s structure, they operate on such levels: corporate, regional, business group and company level. The secondary HR director would report to the secondary president acting who is next in charge to the director. The secondary HR director gets the advice from the company board. The group HR director arrange monthly meetings with the companies HR directors’ group. The main aim behind the meeting is to look for better options and human resource for filling the gap in the group management. It also analyse the candidate profile for recruitment. The company has functional and geographical mobility so that it can utilise it for human resource. The long term experience of the group management has provided a good scope of efficiency within the group for the success.
To grow higher paths in career international mobility is must. The mobility helps in creating the global managers for efficient know how of the globalization. For example the HHR head change the case of the insurance specialist in fashion business to control the shoe factory in Romania. The company is well aware of the risk behind the appointments of the managers. The main reason of deployment is to expose them to the new business environment and to train them for the prospective growth
The company also held training activities for the professional development of its employees. The organization group helps in individual training for success. Nearly 50% of the senior staff in the company is French and over 40% of managers are French. The global workforce comprises of about 37% of French staff.
The company’s HR has to initiate making more global managers for control of global business and to achieve growth in global market. The network of HR staff makes the mobility team of the entire company which in turn is staffed with the local employees.
LVMH did not have the talented pool of the managers for the local business. The company’s talent is divided into two profiles: the first one are the managers sent out to control the secondary business by the headquarters and the second kind sent out to develop the business skill for the running of the business. With the increasing international business the managers’ relocation is become a part of the company’s agenda.
The company did not appeal the business experts by providing them high salaries. The group was dedicated to achieve cost reduction. Although it is usual that high salary is desirable, it is not the main factor to relocate. The main benchmark of the relocation given to the business managers is to make sure the suitable one is not lost and neither grows by itself due to relocation. The C&B dept has also looked into these for the relocation policy.
The basic salary in the country is evident for the international business. Due to international exposure the salary package gets higher. This make important for the management to work out the pensions scheme and security options for the employee. Compared to the local labour market the mobility salary package is average. There are two likely potentials in this regard – HP1 and HP2. The member can achieve the position of board committee, regional president or secondary president. The HP2 employee can go upto two steps of levels of management. For the corporate HR these potentials have broad sense and are relevant in their own sense. They would be categorised on the basis of the company’s HR structure.
The company give specific targets to the global manager to achieve as the working tasks for a given dead line and also give them the authority to take individual decision for the company – thereby they can learn the decision power under the new environment of freedom in business.
TASK – II Learning and Development
Learning and development are the heart of growth of the life. In business terms learning and development are the inspiration in the era of competitions.
Key factors for the managing learning and development in MNC are as follows:
Learning and development activities performs leading act to the winning attainment of the business organisation. Personal development stage of learning and development activity survives the sketch for individual and self-directed learning. Learning and development shows a satisfied understanding of the business leaders in their business organisation. Another important factor of the value chain system of their organisation is to help the ethics to go forward. It establishes a straight goal and strategies for employee’s development. Learning and development is involving others and making busy their shareholders in transparent and straight way. It sates priority scheduled as a long term and short term of good overview of what is necessary to be innovative. Without being overleaped to any one process of release, learning and development uses process and techniques appropriately. It applies metrics to express assessment and above all strategies. Learning and development strategies understands the legacy that followers carries with them and adjusting their interventions accordingly.
Business organisations that operate globally comprise international and multinational firms. International organisations are operates where events take place in granted overseas that vary on the business expertise or manufacturing ability of the root company; they may be highly centralized with fit controls. On other hand Multinational organisations are the company’s degrees of autonomy they have will vary from which a number of firms in number of nations are lead as a entire from the centre of the globe.
As far as I can advice to Lvmh Board, report is as follows:
As par Hofstede’s opinion (1980, 1991), “He used to define culture as the cooperative psychological programming of human beings in and environment consider to cultural values as wide techniques to favour assured states of interaction over others and described firm as cultural bound”. After having a look at International Data of IBM employees’ commentator said four national cultural dimensions: uncertainty avoidance, masculinity/femininity, power distance and individualism/collectivism.
For the strategic development, the company LVMH also takes cultural base in to account. As for instance, in Japan they cannot employ the younger managers above the manager who is elder in terms of age as this is matter of disrespect in Japanese culture custom. Hence the company has to make policies based on cultural differences.
As for example in India as a highly populated country one can find vast pool of knowledge base to match the business criteria. But the company has to bear in mind that Indian culture is very different with great versatility full of festivals. For the products or service launch the group manager has to be well aware to launch in the festive season for takeoff to increase the growth of the business. Apart from this the global manager has to be give training about the local language spoken in the business area to integrate with local culture and the business culture as well.
Business organisation has to concentrate on environmental distances between different countries as they are going to manage globally. The point of concentration includes “distance in the globalization of markets, institutions, regulations, and collective bargaining and labour force characteristics” according to Gerhart and Fang (2005). As for example, Western European countries considers, exposure of cooperative bargaining is much adequate than in countries like the United States, Canada and Japan.
The company I mean LVMH has branches all over the world. This makes them easy to make business with local culture and global point of view. For instance they can decide the same wages and regulations for all the employees around the branches in the world. The company pays in hundreds of Euros a month wage to the manager globally may not match the salary he/she achieve in Asian countries. The standard of living across the world is different hence policies regarding the wage structure highly depend on the regional location of the global manager. It can be different from the same manager getting salary package from the headquarters and secondary companies group.
The process of economic integration between more than one or two nation’s markets worldwide is called a Globalization. Globalization involves the development of each international market for it’s the best or services acquired by a kind of hierarchical growth in globe business.
To achieve global advancement in the working environment the company has employed the local people rather than the French experts. The reason behind this is that the French experts are unaware with the local culture and market as well.
It is difficult for them to react with the new selling and buying trends of the local people in the market. By selecting the local manager they can achieve the expertise in the local market. They can raise the level of the expertise of the manager by providing the product training and initiate them for the growth of the business.
TASK – III Recruitment and Selection:
Recruitment and selection is the process of an employment of the firms. It acts an important role in development and growth of company. Recruitment and selection section identifies the future of the firm and employees them salves.
Recruitment is the process simply linked with Selection process. Simply recruitment stage reacts a background role for the selection process by providing the attraction to the applicants from whom the authorised people may choose. Hence, two of each requires an individual selection of ability and efficiency and may in practice be carried out by different ranges. The recruitment activity, but not normally the selection decision, may be outsourced to an agency. It sounds to treat each recruitment and selection activity individually. This simply deals with recruitment process, action, policies and procedures which definitely should be designed to meet the strategic objectives of the organisation.
Aim of Recruitment:
The HR should use the transparent process and make a demonstration for the transparency in the process. The department should ensure that the recruitment process should be made to achieve the aim of organizational growth. They should make their activities in such a way to achieve cost reduction and efficiency. The policy of HR should be to follow the legal procedure and discrimination laws in recruitment. The company should also follow the moral values for the recruitment process. The company’s corporate goals are better achieved if the efforts for the recruitment process are well processed. The recruitment process should be strategic in terms of achieving the goal of equality in selection.
The first step of the recruitment process is to calculate the demand for additional HR and to follow whether or not you have an opportunity you wish to fill. An opportunity may be a new designation that has been recognised through the development of the business tactical plan, or it may have comes on top because an worker has reconciled, retired or been dismissed. The latter are sometimes referred to as surrogate jobs to tell apart them from new jobs. You may also decide to enlist an employee partner for a conventional employee who no longer desires to work full time.
The recruitment strategy is all mix of the recruitment processes, goal to lease and move towards to lease the finest endowment. The recruitment strategy is a material to execute to move forward and to earn the finest endowment from the job market. The recruitment has to be linked completely with other tactical HR materials to survive the due of the firm with a open picture about the HRM draw near to the matter.
The recruitment can also explain some special activities to earn the finest likely applicants to the firm and to pull towards firm them to be employed with the business firm. The recruitment strategy cannot explain the general mottos as “being the employer of choice.” The scheme should explain the clear behaviour and steps to be the real owner of choice to keep to pull towards of the target audience.
Selection contributes to the accomplishment of strategic targets and so is too momentous procedure to be examined on the basis of what is well-known or convenient. Business firms may vary on the state of affairs; require slotting in a broader array of programmes rather than simply interviewing alone. The selection process is open for all applicants who are eligible to the requirements, and they can email their CV’s or can call the Human Resource team for an application pack. As I can understand selection method is followed by four steps are as under: Group interview, presentation, selection tests, and work samples or notation.
Policy and Procedures:
Managers of the firms are trying to demonstrate that in just little time they can reply either they are eligible to earn on with somebody, or that person will do glowing in the job. Such kind of egotism is a most important causative approaches to the low authority of interviews as a selection method. The idea of authority will be debated in so many details later. But it can be settled here that the strategic HRM factors would advise that employees are too important resource to the chosen or rejected in such a one-sided and uneducated method.
Short listing simply means filtering the applications from bunches of the applications according to the requirement and suitability of the designation in the firm. The process is take a place to make sure an employee is the best suits to the requirements and just before the acquiring the designation to the employee. The first step is consequently to decrease the proposal to a convenient process called short listing. There are number of manners of short listing the applications such as reach the educational requirement, job efficiency, telephone interviews, and at last personal interviews and attitude tests.
The Lvmh Company is a leading name in the world of business. The company has to select the manager to be in well control of proficiency in English which is the main business language in the world today. In the past the company employed the French staff unable to speak English. If they can’t speak English, the company can start training sessions for English speaking and make the learning essential in business. It helps them deal effectively at the global level.
To survive in the global competition, Lvmh strategic approach to achieve international flexibility and guidance the employees to gain mastery in the first or mainly used business language (English) has been improved. With the analysis of these papers, it can be concluded that the company has improved and is running the HR policies successfully since 1593. The company has a very old business history and is still a leading company in the business world. The success of the business is dependent on the working patterns and the human resource policies adopted by the board of directors in the group. Time by time they have adopted to the changing business scenario locally and globally to meet the challenges offered by the human resource management. They will continue to thrive in the fast pace business environment by implementing efficient human resource policies. If I can say as only one opinion LVMH has been passed from the lack of English language proficiency to move forward in globalisation.
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