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Managing Multi Cultural Issues in HR Strategy

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  • 1. National HRD Network Webinar on Managing Multi Cultural Issues in HR Strategy July 29, 2009 3:00-4:00 PM IST
  • 2. HR STRATEGY on “ Managing Multi Cultural Issues” S.Y.SIDDIQUI Managing Executive Officer Admn. (HR / FINANCE / IT) Maruti Suzuki India Ltd.
  • 3. Multi Cultural Aspects in HR…….
    • Employee ~ Population Mix
    • Work Culture Impact
    • Mix of the Top Management Team
    • Link with the parent Company~ Collaborator
    • Human Resources policies
  • 4. Multi Cultural Aspects in HR…….
    • Employees ~ Population Mix
    • - In the Indian business situation
    • - Outside India in an overseas location
    • - Social & Cultural habbits ~ food ~ atiquettes
    • - Management & Leadership styles
    • - Adaptability to alien context ~ Culture ~ working
  • 5. Multi Cultural Aspects in HR…….
    • Work Culture of the Company
    • - US Multinational,Japanese,European,Korean or Indian
    • - Joint Venture Company
    • - Core values, Management Style, Key Policies
    • - Systems, Processes & Work Practices
    • - Code of conduct formal & informal
  • 6. Multi Cultural Aspects in HR…….
    • Mix of the Top Management Team
    • - American + Indian
    • - Japanese + Indian
    • - American + European + Indian
    • - All Expatriates
    • - All Indians
  • 7. Multi Cultural Aspects in HR…….
    • Link with the Parent Company ~ Collaborator
    • - In case of an MNC or Joint Venture or 100% owned
    • subsidiary
    • - Influence of company vision, core values & top
    • leadership style
    • - Related impact on business strategy & plan and its link
    • to HR Strategy : Work Culture, HR Policies & Work life
  • 8. Multi Cultural Aspects in HR…….
    • Human Resource Policies
    • - Working days, working hours, leaves & holidays
    • - Organization design & structure
    • - Manpower Planning, Hirings & Induction
    • - Compensation & Benefits management
    • - Performance & Potential Management
    • - Expatriation in & Expatriation out
  • 9. Glimpse of some real issues….
    • Work Culture
      • Tendency of parent company in case of MNCs to have same work culture in an overseas company
      • Disconnect between parent company culture & the local context e.g. Indian subsidiary
      • Misunderstanding due to lack of sensitization of local social structure & cultural context
      • Impact on the blue collar workers ~ union
      • Morale, motivation, ownership & commitment of the work force
  • 10. Glimpse of some real issues….
    • Compensation & Benefits
      • Relatively low annual Salary increase compared to Indian context
      • Simple & compact salary structure without any consideration to tax savings etc
      • High focus on variable Pay & bonuses and Cash element rather than fixed salary & long term benefits
      • Clear link of Individual performance to variable pay and annual salary review
      • Strong link of financial performance of the company to define variable pay & Salary decisions
  • 11. Glimpse of some real issues….
    • Job Security ~ People Orientation
    • Relocation, No Increase, Salary cut, Pink Slips or Downsizing in case of:
      • Economy/business downtrend or recession
      • Non performance of an employee
      • Acquisitions or mergers of companies
      • In case of restructuring
      • In case of closure of business/plants
  • 12. Managing multi cultural teams
    • Equal participation with ability of sensitive listening
    • Respect for each other
    • Understanding the unique cultural context
    • Inter-personal relations
    • Initiative & Adaptability
  • 13. The MSIL Experience
  • 14. Phase I : (1983; SMC-24%, Govt. of India – 76%) Market Dominance Production Orientation Trade Union perspective Phase II : (1995; SMC-50%, Govt. of India – 50%) Prod., M&S & People Perspective Emergence of Competition Customer Orientation Phase III : (2007; SMC-54.2%, Listed on Stock Exchange) Intense Competition Emphasis on Engg. Capability Marketing Orientation &Talent perspective Maruti Suzuki : Glimpse of Last 25 Years
  • 15. Multi culture in MSIL’s context
    • Maruti Suzuki India Ltd is a classic example of a balanced mix of Indian & Japanese culture & management styles:
    Japanese Long-term and detailed Planning Process Long term employment relationship High orientation to Systems/Work Practices Strong character & commitment Budgeting Process- Cost Savings/ Reduction Slow/Lengthy Decision Making Focus on Micro business processes Indian Rich in tradition & culture High emotional quotient High versatility ~ adaptability Job security Orientation towards participative style High sense of belongingness Company & family connect
  • 16. MSIL Organization Structure
    • MSIL has evolved the concept of “Paired Leadership Model”
    • Introduction of “Managing Executive Officer System” with focus on:
      • Policy Formulation & Key Decisions at the Board level
      • Execution of Key Policies & Decisions in day to day operations
    • Benefits of the new organization Structure:
      • Improved clarity & focus on key Management responsibilities
      • Harmonization, leading to reduced compartmentalization
      • Improved Coordination, across the functions
      • Improved Speed in Decision Making
      • Development & Career Enhancement Process of Indian Professionals
  • 17. MSIL’s Focused Training Interventions
    • A well defined training module has been initiated at middle & senior management level to:
      • Strengthen the bond
      • Address multicultural issues related to both Japanese and Indian employees.
    • The training programs have been initiated with focus on:
      • Creating Team Synergy
      • Promoting culture of innovation
      • Enhancing risk taking abilities
      • Developing Cultural Sensitivity
    • Language training has been brought in to bridge the language barrier; Specialized interpreters have been roped in to facilitate better understanding
    • Effective communication across the company on regular basis across all levels division.
  • 18. HR Ground Realities :Indian Context
    • Human Resources Management, is strongly influenced by
      • Local Culture,
      • Social Norms &
      • Local Beliefs and Practices
    • Why few MNCs fail to be successful in India???
      • A common mistake - overlooking the local ground realities under the unconscious bias of their parent Corporate Culture, Policies & Practices
    • People management in India or any other alien overseas operation cannot be successfully managed in any “Japanese” or “American” or “Korean” or “European” way
  • 19. HR Ground Realities :Indian Context
    • HR policies, systems & practices based on the culture & core values of the parent company may or may not work in the Indian context
    • Key to success lies in embracing flexibility, understanding, acceptance, respect & adaptability to the local ground realities
    • Collaborative process of gradual change through trust, mutual exchange, training and flexible management approach can help in establishing a strong link & facilitate desired results
  • 20. HR Ground Realities :Indian Context
    • Maruti Suzuki is the most successful & live example of such business success in India – The Suzuki Way- credit to Chairman O. Suzuki & the SMC Top Management Team.
    • The Indian Government thus decorated Chairman O. Suzuki with – PADMA VIBHUSHAN – the highest Indian honor, in 2007
  • 21. To sum up…
    • Managing multi culture initiatives help an Organization keep a competitive human resources advantage thru:
      • Improved corporate culture
      • Improved employee morale & higher retention of employees
      • Enabling the organization to move into emerging markets
      • Decreased interpersonal conflict among employees
      • Increased productivity, innovation & brand identity
      • “ DEVELOPING A GLOBAL CORPORATE, A GLOBAL CULTURE &
      • A GLOBAL PEOPLE & TALENT POTENTIAL”
  • 22. YOU CAN COUNT ON US… PLEASE BUY ONLY MARUTI CARS THANK YOU!!
  • 23. Thank you for your participation For Question & Feedback please email at ankur@hrtalks.in Thanks

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