Internalization of Operations: Issues in Management of Expatriation
THIS ESSAY SHOULD BE WRITTEN WITH REQUIRED SOURCE IN THE ATTACHMENT
WRITE THE ASSIGNMENT 2 PLS.
Individual Report based on the Case Study below
“Case Study – HRL313 2018-19
Scrum-me biscuits
Scrum-me Biscuits is a large UK-based snack manufacturer that was set up in the nineteenth century. It is now one of the largest snack manufacturers in the UK. Over the past two decades it has been internationalizing its operations, and has acquired companies in the USA and Australia. No major adjustment issues have been encountered in these two countries.
In 2012 it became involved in a joint venture in the south of Japan. The Japanese partners were local businessmen who had no prior experience in biscuit-making. Scrum-me pumped in money and resources, and the Japanese partners set up the land deal. The biscuit factory was built on a greenfield site, and was equipped with state-of-the-art machinery. Scrum-me took the view initially that it would be easier to send UK expatriates to run the factory, as they assumed that what works well at home, will transfer well to any new Country of operation and, with this approach, no major difficulties had been encountered in the USA and in Australia. They would be working with a few selected Japanese managers, who would help them with recruitment and daily management of the shop-floor.
However, in the following two years numerous problems occurred within the Japanese factory. These included issues with quality control, stock control, and failing to deliver orders to customers on time. No great insight had been gained by trying to speak with the expatriates over the phone and discussion inevitably tended to focus on performance matters only. Nevertheless, it was clear that things were not going well and that expatriates were feeling increasingly frustrated with the situation but seems clueless on how to improve it.
Scrum-me sent out a delegation of senior managers to investigate the situation; to inspect the plant and interview the expatriates in one-to-one meetings.
They later sent a report outlining their key findings, see them summarized below.
Main issues observed in the shop-floor:
There were low levels of motivation within the shop-floor ranks.
Both shop-floor workers and Japanese managers seemed unwilling or unable to take on any level of responsibility.
Local managers would be exerting strong pressure to hire members of their family rather than the best person for the job.
Both employees and managers seemed to be unhappy with the use of Performance Related Pay (PRP) which expatriates were trying hard to enforce.
Expat managers seemed unable to manage the situation effectively.
When working in mixed teams –British/Japanese- decision making proved to be a nightmare.
They seemed much more vocal when they were meeting outside the office. Indeed, they tended to socialize quite a lot…but Britons expats were not invited to join in, as if they were not trusted.
Results of a survey of expatriates’ experience and satisfaction
After surveying all of the expatriate managers by means of in-depth interviews, it came to light that:
They felt that Scrum-me were not doing a great job in career-planning: all of them had been in the country for over 3 years (3 of them had been sent at the very beginning) and some of them had only agreed to stay for a maximum of 2 years. None of them know when they will be sent back home.
looking back at their pre-departure training, they all felt resentful against Scrum-me as they failed to prepare them for ‘the actual thing’;
they all felt that they were receiving very little support from the HQs and that they had just ‘been left alone to deal with it all’;
4 out of 6 were experiencing family conflict as partners and children wanted to go back as they were struggling to settle in (little support for family was on offer);
all of them but one planned on leaving the company if things did not change in the very near future.
PLEASE WRITE A 2000 WORDS REPORT FOR THE BOARD OF MANAGERS WHERE YOU ADDRESS THE FOLLOWING QUESTIONS:
Q1. What are the main issues with Scrum-me’s management of expatriation? (Refer to the stages of Brewster et al.’s expatriation cycle).
Q2. Can you identify three reasons why team-working is going so wrong (refer to Brett et al’s theory)?
Q2. Using module theory (i.e. Harzing) and a few companies’ examples, can you give Scrum-me some advice on how to improve their expatriation strategy and planning? (When giving advice, aim at resolving the issues identified in your earlier sections, so that the report is cohesive and well-integrated).
Please Note: Your report needs to be informed and underpinned by academic literature throughout. Relevant examples are also important.
Recommendations need to be realistic and feasible.
IHRM Case Study
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IHRM Case Study
The successful internalization of operations is important for firms that go global, yet many firms experience challenges, especially about human resource management at an international level. It is, thus, important for firms to understand the concept of international human resource management for the effective management of expatriates, local managers, and local employees. According to Rees and Smith (2017, p.475) internationalization of operations involves dealing with cultural differences between the local and foreign employees to be deployed in the new company. In addition to dealing with cultural differences, expatriates have to deal with adjustment issues. Thus, human resource (HR) managers have to be well informed on current issues and cultures so that they can offer the best training to allow an easy transition. Problems are likely to occur when there are role conflict and high intercultural interaction between the expatriates and the host country’s stakeholders, especially in the absence of a balance in the adoption of the host country’s perspective (Biswajeet 2018, p.604). This paper examines the case of Scrum-me Biscuits and identifies the issues involved in the management of expatriates during the company’ internationalization of operations in Japan. Further, the paper will address the issues affecting team-work between the expatriates and the Japanese managers and give meaningful recommendations to help resolve the identified issues.
Main Issues with Scrum-me’s Management of Expatriation
Scrum-me Biscuits faces some issues in the management of expatriation, which explains why the company has been having difficulties in the performance of the Japanese factory. The company thought that sending expatriates would be a better option because they understood the parent company better, yet they did not consider the risk of failure, which according to Brewster et al. (2016, p. 382) is one of the disadvantages of adopting an ethnocentric approach in staffing. The first issue regarding the management of expatriates at Scrum-me Biscuits is concerned with the planning. In planning, the company has to determine why and whether sending expatriates is the best action. While it is unclear why the company chose to send expatriates, the expatriates were not serving any of the main purposes of expatriates such as developing trust and instilling the culture of the parent company in the new company (Brewster et al. 2016, p.387). The poor interaction between the expatriates and the local employees indicates a lack of trust, and if the locals cannot trust the managers, it would be difficult for them to trust the parent company. Further, the expatriate managers were not able to effectively integrate some of the parent company’s practices, such as the Performance Related Pay (PRP).
There is also the issue of selection of expatriates. Selection involves identifying the right employee for expatriation based on their competencies (Brewster et al. 2016, p.388). Selection of the right candidate is crucial as it will impact the expatriates’ ability to influence the local employees in the host country. According to Brewster et al. (2016, p.389), the selected managers should be able to lead and motivate the followers, yet the managers sent to Japan were not able to implement some practices such as the PRP. Also, the expatriate managers felt that they had been neglected to deal with the issues on their own. However, it is likely that they have a low tolerance for ambiguity. Selecting expatriates with a high tolerance of ambiguity is the key for successful international assignments because the expatriate can cope with stressful situations better (Wiernik et al. 2018, p. 73). Using the stress-coping models, the assumption is that how an individual reacts to stress affects their ability to deal with uncertain situations (Brewster et al. 2016, p.390). The expatriate managers’ inability to deal with the issues such as quality and stock control is an indication that they are also unable to deal with uncertain and unexpected situations, which can be attributed to a poor selection process by the company.
The other issue facing the company in the management of expatriates is concerned with preparation. Preparation is the third stage in the cycle of expatriation (Brewster et al. 2016, p.385), and Scrum-me Biscuits failed to prepare the expatriates before departure properly. The results of the survey conducted by the senior managers revealed that the expatriate felt that they were not prepared for “the actual thing.” Preparation is imperative for expatriates because it helps them to adjust, especially to the cross-cultural changes, once they settle in the host country (Machado 2015, p.53). It is the responsibility of the organization to provide training to the expatriates before they depart to ensure that they are well aware of what to expect in the host country. The training should not only be on their role and responsibilities in the host country, but also the culture of the host country (Machado 2015, p.55). The failure to prepare the expatriates could explain why the managers were unable to address issues effectively. For instance, if the expatriates had been well prepared, the managers could have understood the best reward and payment system that is commonly used in Japan. As revealed by Kato and Kodama (2015), the commonly used system of reward in Japan is based on “long-term skill development through on-the-job training within the firm.” This could explain why the local employees and managers were not pleased with the PRP system. If the expatriates had been well prepared through training, they would not have pushed for that system as they did, but instead, they would have developed a more agreeable system. The company also failed in communicating with the expatriates, which explains why they wondered when they would be sent back home. Companies that send expatriates should ensure constant communication during their stay in the host country (Carbery and Cross 2019, p.267) so that the expatriates do not feel abandoned. Lastly, about the preparation, the expatriates’ families were having difficulties settling in the host country. According to Brewster et al. (2016, p.393), the ability of the expatriates and their families to adjust in the host country is an important factor to consider. Thus, the family conflicts experienced by the expatriates can be attributed to the poor preparation and support given by the company. This has been mentioned as one of the main causes of expatriate failure (Carbery and Cross 2019, p.268) and can explain why some of the expatriates are threatening to leave the com...