Tivonen is a Finland based company who has acquired US based Treelin company. A meeting is scheduled between HR manager of Toivonen and Treelin to discuss how to ensure smooth transition. There are lot of differences in the culture of Finland and US that need to be addressed for proper functioning of the new foreign subsidiary.

1. TOIVONEN PAPER IN THE US
CROSS CULTURE AND HUMAN RESOURSE IMPLICATIONS OF FOREIGN
CORPORATE OWNERSHIP
Presentation by:
RishabhTah

2. CASE BACKGROUND
Mr. Scott Williams
HR ManagerTreelin
Miss. Marja Kempainen
HR ManagerToivonen
• Treelin (Upimin), a US based paper mill, is sold toToivonen a Finland based company.
• Mr. ScottWilliams is supposed to attend a meeting with Miss Marja Kempainen to ensure smooth takeover.
• He is making himself aware about the Finnish Culture so that he can decode what to expect from the meeting.
• He is worried about the culture difference and what if Finnish company imposed their national culture
• He is thinking about various ramifications of this take over on the human resource practices that are followed currently.
• He is understanding the different aspects of a new foreign ownership using published articles.
• He is also making a note of HR practices thatToivonen follows and what practices of same can display adverse effect.

3. FINDINGS OF MR. SCOTT WILLIAMS
• Not all the companies from same country follows same organisational culture.
• National culture and organisational culture are not identical but inextricable.
• Companies should pay attention towards the local culture and norms of the host country.
• Foreign owner of the companies do impose some, if not all, the HR practices that it follows in home country.
• National culture would shape human resource policies.

4. HOFSTEDE CONTRAST BETWEEN US AND FINLAND
Power Distanace Individualism Masculinity Uncertainty Avoidance Long Term Orientation Indulgence
FINLAND 33 63 26 59 38 57
US 40 91 62 46 26 68
33
63
26
59
38
57
40
91
62
46
26
68
0
10
20
30
40
50
60
70
80
90
100
FINLAND US

5. CULTURAL CONTRAST OF
THE U.S.A..……….(&)...……….FINLAND
The United States of America Finland
Importance to individual performance Importance to group level performance.
Risk taking oriented Uncertainty avoidance oriented.
Moderate emphasis on caring for the people in society. High emphasis on caring for people in society.
More importance to power associated with different
positions in society.
Less importance to the powers associated with the
positions in the society.
Individualistic society. Collective society.

6. HR PRACTICES OF
TREELINE ANDTOIVONEN
Treelin Toivonen
Employees Hired by supervising managers. Hiring was done by special work group and not by
supervisors.
Selection was based on the basic skills for entry level
jobs.
Selection based on willingness to learn and improve
and social.
Salary determined based on the survey of the mills in
region.
Centralised compensation system based on survey in
continent.
Individual goals were given Group targets were given.
Employees had liberty to make own decision. Decision is taken by supervisor of the team.
Payment appraisals based on individual performance
and quarterly bonus system.
No payment appraisals and had management bonus
system instead of individual.
Pre-shift and post-shift meetings to give information
and target.
All employees were suppose to use Emails and
information posted on intranet page.

7. HR PRACTICES OF
TREELINE ANDTOIVONEN
Treelin Toivonen
Two levels of supervisors between workers and top
management.
One layer of supervisors between workers and top
management.Communication guru on the floor.
Employees not trained for promotions to executive
council.
Online training course for every employee to cater their
individual growth requirements within the company.
30-40% of payroll spent in benefits to the employees
in different form like investment and heath care.
Unlimited sick times leaves.Team to council the employees
in their personal issues when asked.

8. CASE ANALYSIS
 Why companies should pay attention towards the local culture and norms of foreign subsidiary
company?
 Culture of a region is formed based on the shared values and believes of the people living together in the area.
 Different cultures have different acceptable and unacceptable values and norms
 How are HR policies and practices made?
 Every country has different P.E.S.T.L.E conditions.
 Practices are made based on the day to day activities whose origin is rooted in the long following traditions,
that is the culture of the country.
 Why do companies impose their HR policies on their foreign subsidiaries?
 To ensure that the foreign subsidiary is in alignment with the mission and vision of the company.
 To ensure that same corporate ethics and values are shared in the headquarters and the foreign subsidiary.

9. CONTENTIOUS POINTS OF TOIVONEN
 Treelin’s practices are to ensure individuals are meeting their target.
 Toivonen’s has a collective approach. Designed to ensure entire group is meeting the target.
 Hiring decisions were with the supervisors of theTreelin paper plant.
 Hiring decisions were with the central work group of theToivonen company and no hiring firing decisions with
supervisors.
 Under Upimin,Treelin had very low interference in day-to-day activities of the plant.
 Every activity inToivonen is coordinated with headquarters.
 Individual appraisals were given to the employees inTreelin if the targets set were met.
 There was no concept of individual appraisals inToivonen. Because problems were solved by management.
 Quarterly bonus were given to individual employees based on the quantity & quality of performance.
 No quarterly bonus system inToivonen. Instead had Management bonus system for managers.

10. POSITIVE POINTS OF TOIVONEN PRACTICES
 Toivonen provides online training program to the employees.
 No such program is available inTreelin.
 Training program gives opportunity to grow in the ranks within Toivonen.
 Due to lack of skills for next level, growth withinTreelin was very difficult.
 Toivonen had central mailing system where employees can enquire. Answer posted on intranet page.
 Treelin had meeting system of flowing information and target, which was ineffective at times.
 Toivonen had just one line of supervisors between top management and workers.
 Treelin had two layers of supervisors between top management and workers.
 Toivonen had special position of communication guru to ensure proper communication.
 Communication in treeline was a lengthy process due to multilayer supervisors plus lack of communication
system.

11. RECOMMENDATIONS
 Should not implement Finnish culture in U.S subsidiary
 Should implement its online skill development program
 As USA has individualistic culture, should implement individual appraisals. But to ensure that
Toivonen’s HR philosophy of group culture is embedded, they should blend the group culture with the
individualistic culture. That is, should have team target, which is then further divided into individual
target.The individual will get incentive and team culture will be in effect.
 As Americans are already accustomed with individual bonus and appraisals, Toivonen should not
implement its management bonus scheme. Should divide the bonus based on the level of hierarchy. Or
give a fixed bonus in all the levels. Fatal parameter system can be introduced.
 As Toivonen needs to ensure that their corporate culture is intact in subsidiary, they should implement
their policy of keeping decision making with the central team.

12. SOLUTION
 While drafting amendments in current HR policies and practices ofTreelin, Miss Marja should
understand that these are in place because of the culture that is prevailing in the country where they
are attempting to expand.
 She should be open for the cultural change and understand thatToivonen cannot operate in a foreign
country in the way they operates in their home country, Finland.
 Mr. ScottWilliams should be open towards the policies ofToivonen but should act a true
representative of American culture and raise the contentious points in Toivonen’s HR policies which
may harm the new owners performance in USA.
 He should try to keep the moral of existing employees high by assuring them positive ramifications of
the takeover.
 For the start, they should initiate implementing the non clashing and positive policies of Toivonen as it
would create a goodwill among the existing employees.
 For the contentious points, they should try to strike a balance between home and host country culture.

13. Questions are invited.
THANKYOU
TOIVONEN PAPER IN THE US
CROSS CULTURE &HUMAN RESOURCE IMPLICATIONS OF FOREIGN CORPORATE
OWNERSHIP
Presentation by: RishabhTah