Human Resource Management For Expansion Of Organization: Issues And Considerations

Discussion

Describe about the Human Resource Management for Expantion of Organization.

Cappuccino, a very reputed coffee shop located at UAE and in other parts of the world, has recently decided to expand itself in two new foreign locations- USA and Australia. The major reason behind this decision, has been the realization that the organization has been able to conduct successful business at UAE, and became popular within a span of 5 years. Hence, further international expansion of the organization will help the organization achieve greater brand awareness, apart from helping it to enhance its revenue (Bradley et al. 2012). The organization established in the year of 1970, conducted successful trade in UAE, until it expanded in other parts of the world as well, such as Russia, China, Japan, India and  Brazil. However, at present, the organization thought that it would be discreet to focus its trade on a few limited regions, and it was being found out that America and Australia are becoming great startup hubs of business stores. However, it is important to remember that as a result of the sudden restructuring method, the organization may encounter unforeseen challenges in foreign locations, in the form of ethical or cultural or CSR issues, and hence it is important to consider and analyze these issuesbefore undertaking the process of global expansion (Wilkinson 2013).

Cappuccino is desirous to expand itself in Australia, because the country offers a number of grants for the purpose of start up business, and as a country full of tourist site locations, the prospect of a coffee shop is great. Beside, since Cappuccino is a reputed organization all over the world, it can easily gain huge recognition among the tourists all around the world visiting Australia, as well as the ordinary consumers of the country. Besides, Cappuccino has chosen to expand in USA as well, primarily because the country offers great business opportunities to any foreign organization, and also because the Americans consume coffee in great amount, and hence a coffee shop can gain instant popularity with the  American consumers. The organization, in case of both the countries has decided that the working staffs should neither be totally native nor should be completely foreign. While conducting business outside, the organization will have to remember that cultural clash or community clash may emerge if the consumers are unable to avail the assistance of the working staffs that belong to their own country, or ethnic group (Feraro and Broody 2015). As a result of the diverse culture of Australia, Cappuccino will hire a diverse workforce in Australia, while in USA, the organization will hire fresh US citizens, to assume the responsibility of coffee shop employees. The organization will enter into a joint venture agreement with a popular coffee shop organization of each of the countries (Lee and Griffith 2012).

Cultural Issues of Conducting Business in Australia and America

The cultural consideration, while conducting business in a foreign location is of utmost importance, and hence Cappuccino has to ensure that the organization, while conducting business in foreign locations does not encounter any sort of cultural conflict among the employees or the consumers (Moran et al. 2014).

There is no gain stating the fact that USA has a highly distinct and unique culture, and it is absolutely different from the corporate culture of UAE or any other part of the world. Cappuccino is a UAE based organization, and as such coming from the homogenous culture, the employees or the managers of the organization must be mindful of the multicultural influence of the country. Cappuccino as a UAE based organization, conducting trade mostly in the Asian countries, relies more on a hierarchical and collectivist way of conducting business. However, in USA, while entering into joint venture agreement with a partner firm, Cappuccino has to ensure that the business activities are being carried out in an autonomous and independent way (Greenwood 2002). The US culture has a low context culture, and as such the managers and the Directors of Cappuccino must hold regular meetings and interactive sessions with the managers of the partner firm, so as to enable the easy, smooth exchange of information facts as well as opinions. The US culture does not call for the need of a formal approach to businessand hence cracking a joke, calling by first names are highly acceptable in USA (Knox and Marston 2013).

On the other hand, unlike the US culture, the Australian work culture is more formal and rigid. While conducting business in Australia, it is important to be punctual and straightforward, and since the Australians are more formal in their ways of communication, it is important to maintain the courtesy while conducting official meetings. The Australians always welcome innovative ideas, and hence it is important to keep on introducing fresh, innovative, novel ideas in the business (Fry et al.  2013).

Cappuccino must ensure that it does not conduct business in an unethical and immoral way in a foreign location. The organization after setting up its stores in Australia or USA, should not hire cheaper labor force from foreign locations, instead of hiring the native workers of Australia or America. Again, in both USA as well as Australia, the entire population consists of people belonging to diverse ethnic cultures and tribes, and hence hiring an all-inclusive, diverse workforce, is highly important (Burchil et al. 2013). Further, the organization must make sure that it does not in any way harm the environment or ecological sustainability of the local region of the respective country. The Australian government, in fact, has legislated business ethics, by making it mandatory that an organization will be required to preserve the environment as well as ecological balance of the country (Nye and Welch 2016).

Ethical Issue to be Faced in Australia and America

Recent research has shown that countries and cultures differ in their understanding as well as the adoption of the Corporate Social Responsibility acts. While undertaking the CSR activities in USA, it should be remembered that unlike the Asian or Middle West countries, in USA, the US firms are not expected to focus too much on prevention of illiteracy or gender discrimination programs, yet on the issues related to the well-being of the community (Bair et al. 2015). Here, the organization Cappuccino must instigate social involvement by forming partnership with NGOs, and thereby trying to improve the education of the poor children, or the standard of life of the impoverished people of the nation. However, unlike UAE, or China, Japan or Russia, at USA, as a US company, the organization is required to report the details of its CSR activities (Idowu et al. 2013).

The issue of CSR is highly important in Australia as well. The Australian government makes it mandatory that the organizations must consider the social and environmental factors while conducting business in Australia. As it is already known, that the CSR activities of the organization help in improving the financial performance of an organization, and is highly critical in sustaining the business of the organization (Crane et al. 20130. While expanding in other parts of the world, Cappuccino must ensure that it engages in CSR activities, as it helps not only in motivating the employees and other stakeholders, such as the consumers, but it also helps in developing and improving the brand image of the organization, However, it should be remembered that the organization chooses the most effective CSR activities. Australia suffers from a high rate of unemployment, and hence it would be highly advisable for Cappuccino to hire a large number of Australian employees for the coffee shop, as it would help in eliminating the problem of poverty and unemployment from Australia. Apart from the job creation strategy, Cappuccino must also invest for creating a diverse workforce, as diversity of various ethnic cultural groups plays an important role in Australia (Gond et al. 2011). Organizations, such as Woolworths have gained much reputation in the Australian market by employing a diverse workforce. The organization must form an alliance with a Non-Government Organization, and should support educational programs. In case of both the organizations, CSR plays an important role, and hence Cappuccino must try to incorporate the CSR strategies in its vision and mission of the organization (Shen 2011).

CSR Issues to be Faced in Australia and America

Conclusion:

The organization can flourish and can achieve great brand recognition in the foreign locations. However, the managing authority of Cappuccino should note that while going global, the organization must pay sufficient heed that may arise out of the cultural conflict or difference in ethics of the host country and the foreign country. Hence, it is highly recommended that the organization analyzes and critically evaluates the issues that may impede the growth of the organization in the foreign market. To conclude, it must be noted that the organization has a huge prospect in overseas market. However, there are cultural differences among the countries and hence it is important to train the workers accordingly to suit the culture of the country they are working for. In addition, Cappuccino must also adopt the most appropriate and effective CSR strategy in the respective countries.

Reference List:

Bair, J. and Palpacuer, F., 2015. CSR beyond the corporation: contested governance in global value chains. Global Networks, 15(s1), pp.S1-S19.

Bradley, B.A., Blumenthal, D.M., Early, R., Grosholz, E.D., Lawler, J.J., Miller, L.P., Sorte, C.J., D’Antonio, C.M., Diez, J.M., Dukes, J.S. and Ibanez, I., 2012. Global change, global trade, and the next wave of plant invasions. Frontiers in Ecology and the Environment, 10(1), pp.20-28.

Burchill, S., Linklater, A., Devetak, R., Donnelly, J., Nardin, T., Paterson, M., Reus-Smit, C. and True, J., 2013. Theories of international relations. Palgrave Macmillan.

Crane, A., Matten, D. and Spence, L.J., 2013. Corporate social responsibility in a global context. Chapter in: Crane, A., Matten, D., and Spence, LJ,’Corporate Social Responsibility: Readings and Cases in a Global Context, 2, pp.3-26.

Ferraro, G. and Brody, E.K., 2015. Cultural Dimension of Global Business. Routledge.

Fry, D.P. and Bjorkqvist, K., 2013. Cultural variation in conflict resolution: Alternatives to violence. Psychology Press.

Idowu, S.O., Capaldi, N. and Zu, L., 2013. Encyclopedia of corporate social responsibility. Springer Berlin Heidelberg.

Knox, P.L. and Marston, S.A., 2013. Human geography: Places and regions in global context. Pearson.

Lee, H.S. and Griffith, D.A., 2012. Transferring corporate brand image to local markets: Governance decisions for market entry and global branding strategy. In K.S. Swan and S. Zou eds.,, Interdisciplinary Approaches to Product Design, Innovation, & Branding in International Marketing (pp. 39-65). Emerald Group Publishing Limited.

Moran, R.T., Abramson, N.R. and Moran, S.V., 2014. Managing cultural differences. Routledge.

Nye Jr, J.S. and Welch, D.A., 2016. Understanding global conflict and cooperation: an introduction to theory and history. Pearson.

Wilkinson, R., 2013. The WTO: Crisis and the governance of global trade. Routledge.

Gond, J.-P., Igalens, J., Swaen, V. & El Akremi, A., 2011 ‘The human resources contribution to responsible leadership: an exploration of the CSR-HR interface’, Journal of Business Ethics, 98, pp.115-132. 

Greenwood, M.R., 2002 ‘Ethics and HRM: a review and conceptual analysis’, Journal of Business Ethics, 36 (3), pp.261-278.

Shen, J., 2011 ‘Developing the concept of socially responsible international human resource management’, International Journal of Human Resource Management, 22 (6), pp.1351-1363.