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HRM in Automotive Industry - Capita selecta
HRM in Automotive Industry - Capita selecta
HRM in Automotive Industry - Capita selecta
HRM in Automotive Industry - Capita selecta
HRM in Automotive Industry - Capita selecta
HRM in Automotive Industry - Capita selecta
HRM in Automotive Industry - Capita selecta
HRM in Automotive Industry - Capita selecta
HRM in Automotive Industry - Capita selecta
HRM in Automotive Industry - Capita selecta
HRM in Automotive Industry - Capita selecta
HRM in Automotive Industry - Capita selecta
HRM in Automotive Industry - Capita selecta
HRM in Automotive Industry - Capita selecta
HRM in Automotive Industry - Capita selecta
HRM in Automotive Industry - Capita selecta
HRM in Automotive Industry - Capita selecta
HRM in Automotive Industry - Capita selecta
HRM in Automotive Industry - Capita selecta
HRM in Automotive Industry - Capita selecta
HRM in Automotive Industry - Capita selecta
HRM in Automotive Industry - Capita selecta
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HRM in Automotive Industry - Capita selecta

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  • 1. 30/05/13 HRM models and theories 1INDUSTRY DYNAMICS >HUMAN RESOURCE MANAGEMENT >EMPLOYEE CONTRACTING“Linking production models with employment patterns, in the automotive industry.Another angle on how employment adaptation strategies are drawn.”Course: Managing Human Resource Flows (194120090)Document: Capita Selecta – Individual ProjectAuthor: Dimitrios Kordas (MSc)Enschede, 30-5-2013
  • 2. 2Abstract• Does really production models in USA & Japan affectemployment strategies of car manufacturers?• Is an institutional analysis (micro, meso, macro – level)sufficient to explain the evolution of Japanese long-termemployment and the American private social welfare?• What are the gaps that a production-driven approach canaddress look on HRM policies and employee contracting?• Why, the Japanese organizational mode seems to bemore productive, more flexible and more profitablecomparing to the American one?
  • 3. 33Research goal“To examine whether and how the production model followedby the automotive firms operating in Japan and in USA affectstheir employment strategies.”Notions used: Product Architecture: Modularization vs. Integration Employee Contracting: HR-architectures
  • 4. 4IntroductionOld technology New technologyDevelopingCapabilitiesTransforming corecompetences intocoreproducts On which products exactly do automotive firms compete? Why do firms differ so much in terms of profitability?
  • 5. 5Literature review  JAPAN USALabor mobility Low HighUnemployment rate Increased DeclinedWage differentials among workers Smaller BiggerTable 1. Mobility – Employment – Wage differentials (Hattori & Maeda, 2000)Organizational mode Japanese AmericanHRM PoliciesSourcesAbbeglen (1958)Dirks et al. (2000)Hamaak, Hori, Maeda, & Murata (2011)Hirano (2013)Jacoby (2005)Kato (2000b)Moriguchi & Ono (2004)Nitta & Hisamoto (2008)Okada (2012)Recruiting at any levelPay for specialized skillsIndividual bonusesUse of hierarchy commands/standardsfor information processingMarket-oriented decentralized personnelmanagement (DP)Job-based ranking policyStandard evaluation and development ofspecialized skills,DP: as a business partner trying tosucceed to the four roles defined byUlrich (1997)Competencies-Triad (Boudreau &Ramstad, 2007):- Business knowledge- Delivery of HR practices- Technology expertiseRecruiting at the bottomPay for roles potential abilities,Work group bonusesInter-department communications &strong union participationCompany optimization-orientedcentralized personnel management(CP)Ability-based ranking policyIntense in-house trainingCP: as a complement to an internallabor market, Mass-hiring of graduatesCompetences:Knowledge of the various divisionswithin the firm and development of abroad network of connections
  • 6. 66Institutional analysisLevel of analysis TOYOTA-style GM/FORD-styleMacro: Government Competition transparencyPersonal rights protectionOpen to women employmentStrict labor market regulations, union lawsand social welfare policies (Moriguchi &Ono, 2004)The Nikkerein Initiative (1995) Close towomen employmentMeso: Organization Manufacturing operationsConcentrated productionHigh inventoriesUse of local workers’ knowledgeProduct improvementsCorporate StrategyCompetition leaderReinvestment in external activitiesShort-term buyer/supplier relationsManufacturing operationsHigher spread productivity growthTransplant investmentsLow inventoriesLean operationsCorporate StrategyGrowth and market share orientedReinvestment in personnelLong term buyer/supplier relationsMicro: Society Personal (vertical) promotions,opportunism, high-class education andprestigious institutions lead to prestigiouscompaniesLoyalty, trust, commitmentSocial exchange relations (horizontalpromotions)Low impact of institution’s reputation onemployment
  • 7. 7Product Architecture: Source of technologicalinnovationTechnology trajectory Product platforms• Performance improvement• Diffusion• Change of interestInnovation: Types - Patterns - Technology cycles
  • 8. 88Organization strategic direction Core Competences (CC): the point on which manufacturers, try tobuild, borrow, buy, bounce, or bind capabilities, as fast as possible tosuper-pass their competitors (Prahalad & Hamel, 1990). Companies, even from the same national context, differ on what theydo compete!“Prius”: Aggressivecollaboration,Partially Borrow &Partially Buycapabilities“Prius”: Aggressivecollaboration,Partially Borrow &Partially Buycapabilities“Insight”:Transferring &Training to buildcapabilities,Redeploymentemploymentstartegy“Insight”:Transferring &Training to buildcapabilities,Redeploymentemploymentstartegy
  • 9. Source: (Lepak & Snell, 1999) 9HR-Architectures
  • 10. Source: (Prahalad & Hamel, 1990)10Business portfolio vs. Competences portfolio“Capabilities portfolio”CHRYSLER (after ’60s)/FORD(after ’80s) Hand-in-Hand training Learning through specific-components partnerships Competition ontransaction-specific skills(Jones & Hill, 1988)“Competences portfolio”TOYOTA Collaborative training Accumulative learningshared with partnersLong-term competitiveness“Job portfolio”GM (2008) No in-house training R&D direct adoption Competition on price“Business portfolio”HONDA In-house training Accumulative learningstays inside Short-termcompetitivenessPrice/Cost (efficiency)Performance(Responsiveness)
  • 11. 1111Supply Chain learning: Transaction Costs approach Factor prices Resource availabilities towards Resource Based View Market situation“The World of Contract (Williamson, 1985)”ContractualinterfacesContinuityAdaptabilityReal economic valueoffer
  • 12. 1212TOYOTA Supply Chain: A “best practice” example Strategic supplier segmentation Partner-model 3-level concentric supplier management (Fig. 1) employeeportfolio (Fig. 2) Common destiny: high relational mutuality & high HR-superiorityFig. 1: Strategic supplier management (Dyer et al,1998)Fig. 2: Nikkerein employee portfolio proposal(Nikkerein, 1995)
  • 13. 13TOYOTA personnel segmentation
  • 14. 14Why supplier segmentation? Increase numerical (cost) flexibility Establish individual and performance-based initiative HYBRID (Japanese) organizational mode (Hirano, 2013)Ranking policies: Ability-based + Job-based Transplant case National and Societal factorsJAPAN USA- Homogeneity - Diversity- Social welfare corporatism - Unrestrained market- Familism - Individualism- Paternalism
  • 15. 15Corporate StrategyModularizationIntegrationJob-designSet the bottom line of JAPANESE-strategy Highly modularized mass-market Develop as fast as possible VRIO capabilities Lean production system: Triple segmentation Reciprocical commitment (Cole, 1979) Horizontal promotions, irrespective the seniority level AMERICAN-strategy “Inner” & “Outer” workforce segmentation Centralized ownership Not full acquisition (not squeezing the lemon) Lateral promotions for highly-skilled engineers
  • 16. 16Summary: “A purchasing approach andHypotheses to be tested”Internal labor market Long-term/HybridExternal labor market Short-term/Task relatedEfficiency (productivity)Responsiveness (variety)CustomizationMass-productionProduction model Operating perspective Developing CCs Employment pattern
  • 17. 17Hypotheses to be tested I H1: “If mobility will increase – in transplant case – andunemployment will decrease, then profitability will increase.” H2: “Given that job tenure in Japan is decreasing, then thenumber of flexible workers will increase to the extent thecontacting costs of core and specialized employees will bereduced, respectively.” H3: “The rate of employee development is positively relatedto the bottom turnover for each position.” H4: “The customization costs are positively related to theannual firm profitability.”
  • 18. 18Hypotheses to be tested II H5: “The transfer frequency of an employee is related to his/hercommitment negatively in USA and positively in Japan.” H6: “The wage differentials – for university graduates – for bothorganizational modes are linearly expanding with the seniority level.”
  • 19. 1919Limitations Complementarity and Duality principles are not analyzed Labor data: not used (qualitative approach) Productivity measures: not taken into consideration Trade/Labor unions: not considered as crucially employmentshaping factors New employment models (e.g. pay-for-jobs, pay-for-accountabilities): out of article’s scope.
  • 20. 2020Further discussion IModel 1. Testing the relationship between Physical & Human Capital investments withthe Production Organization Index
  • 21. 21Further discussion IIModel 2. Efficient contract organization (Control vs. Commitment HR-systems)
  • 22. 22Thank You !

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