International HRM Case Study

International HRM Case Study

GB520-01

Strategic Human Resource Management

Unit 6 Assignment

Brunt Hotels, PLC is a chain of 60 hotels located throughout the United Kingdom. They are eyeing global expansion, looking to expand into France. To facilitate their expansion, their opening move is a recent acquisition of a small chain of hotels that are located in France. The plan is to retain only half of the acquired hotels, rebranding them as Brunt Hotels, while selling off the other half.

The Brunt Hotels are considered budget accommodations that are functional, clean, and reasonably priced. Their guests are mainly a combination of both business and leisure travelers, and their average stay is one to three nights. The hotels have also become a tourist favorite as they are strategically located by mass transits, downtown, and by local attractions. Hotel chain executives have decided to take an ethnocentric approach, sending some of their existing United Kingdom based managers to France to oversee the rebranding of the new hotels. The expansion into France will be the first attempt in globalization. If this expansion is successful, Brunt Hotels will look into expanding into other European countries. The goal is to own 150 hotels within the next five years and 300 hotels within the next ten years. In order for the organization to meet this ambiguous goal, they will need to create an effective formula that will both allow them to expand and operate successfully within other countries.

Ethnocentrism is characterized by or based on the attitude that one’s own group is superior (Merriam-Webster, 2016). An ethnocentric approach is very important to avoid when expanding globally because it makes one conscious of another culture. It also uses the new home country to incorporate their policies and practices into the new subsidiaries. Organizations who hire employees from within the home country can also bring in knowledge of the current culture to replicate with the corporate culture.

There are different staff categories that can be hired within these global organizations, and they are differentiated by their national origin. The three main categories of staff are parent country nationals (PCNs), host country nationals (HCNs), and third country nationals (TCNs). PCNs are employees from the country where the organization’s headquarters are located. HCNs are employees from the country in which the subsidiary organization is located. Finally, TCNs are employees who work in neither countries that are not the host country nor the subsidiary country.

Brent Hotels should use both HCNs and PCNs. Using PCNs allows the organization to send their own employees into the new country to learn about the new culture while maintaining the current culture of the company. The company wants to send some of their current managers to watch over the rebranding of the newly acquired hotels. This is beneficial because the managers are familiar with the organization and how it should operate. The use of the PCN managers can help guide the team of new employees by sharing their organization’s policies and procedures. When establishing any new subsidiary, an organization wants to make sure they have PCNs to maintain a high level of control over the employees and operations. The final benefit of sending their own managers is that they can make sure the process of rebranding the hotels stay on track as far as time and meet the standards of the organization’s requirements.

In the globalization process, there is usually a discussion centered on whether an organization should hire expatriates. An expatriate is a person who lives outside the country. The advantages of hiring expatriates would be that it widens the pool of possible candidates, there’s an opportunity to incorporate new ideas into the organization, and there’s a greater chance in finding individuals with more skills and knowledge. On the flip side, the disadvantages of hiring expatriates are that internal candidates may become ignored, external candidates will not have the full understanding of the organization and its culture, the organization is not as familiar with these candidates to fully know who would be a best fit for them, and it can be costly in both and money to go through the recruitment process. In order for an organization to benefit from the advantages and avoid the disadvantages of hiring expatriates, there should be a balance of how many are hired and the process used to hire them. The organization should also consider using different types of expatriates, such as, traditional, temporary and virtual. This can help create a balance and incorporate them into the new subsidiaries.

Not only does an organization need to determine if they should hire expatriates, but they should also determine what the process should be for hiring them. When hiring an expatriate, some of the important factors should be a priority are the ability to learn and adjust to new cultures, the willingness to relocate, if the person speaks the language or is willing to learn the language, their skill level and capability to perform the job, strong and effective communication skills, and their ability to work independently and motivate themselves. Brunt Hotels specified that they will need to hire more than 70 percent for the new hotels in France because majority of them left and they will require their managers to be flexible and be able to move between countries if any problems arise (Robson, 2008).

Can expatriates be successful in transferring knowledge from the host country? This can be determined based on the individual and their characteristics. In order for an expatriate to be successful in transferring knowledge from the host country, the individual has to be good at communicating and demonstrate effective leadership skills. The individual needs to also have received the proper training to be able to share the organization’s culture with the host country’s culture. Through this training, the expatriate will also have a clear understanding of the organization, its culture, and expectations. However, the successful does not only depend on the parent country but also requires support from the host country. The culture of the host country can either positively or negatively affect the expatriate.

Within any organization, salary is an important aspect that attracts candidates. Salary is not the only thing a candidate will look at, they will also weigh the benefits and possible incentives. If the salary is less than the market, an organization should consider offering bonuses, competitive merit increases, various insurances (health, dental, life, etc), and retirement plans. Some other incentives that can attract candidates (both internally and externally) would be company paid flights between countries, offering an allowance for things such as children’s education, relocation, and housing, and paid trainings. For Brunt Hotels, their salary for managers is about €15,000 less than the average salary in France. Since this is the organization’s first attempt at expanding into another country, it would be smart for Brunt Hotels to keep the salary where it is currently at but provide additional incentives. Since the hotel chain is new in France, they should feel out the culture before immediately jumping to what the country’s average salary is. If the expansion ends up being successful, the salary should possibly be restructured.

Reference

(n.d.). Retrieved May 17, 2016, from http://www.merriam-webster.com/dictionary/ethnocentric

Robson, F.L. (2008). International HRM Case Study. Society for Human Resource Management.

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