Introduction
Human resource management involves management of people in the organisation, and such other important functions as recruitment, selection, performance, appraisal, and other personnel functions in the organisation. The objective of HRM is for the success of the organisation through its assets, the working force. HRM maximises human resource potentials, including their talents, skills, and capabilities for the strategic advancement of the organisation.
Armstrong (2006, p. 3) defines human resource management as the “strategic and coherent approach to the management of an organisation’s most valued asset – the people”. The ‘people’ are the workforce, who spends a lot of time working for the success of the company’s objectives. Storey’s (1989) definition states that HRM is “a set of interrelated policies with ideological and philosophical underpinning.”
Human resource management system involves recruiting qualified people for the organisation. This is known as staffing. The organisation’s objective plays a critical role in the staffing process. The management is responsible for identifying and selecting persons capable of implementing the organisation’s plans.
Traditionally, personnel management took the functions of HRM. When functions and responsibilities multiplied due to various organisational and environmental factors in these times of intense globalisation, changes had to be introduced in the organisation. HRM has taken over the function of personnel management, which range from recruitment to training to managing the personnel and their various functions and roles in the organisation.
The objective of this essay is to analyse and determine the advantages and disadvantages of human resource management with respect to two case studies, Apple Inc. and Sony Corporation. The importance of HRM and how it affects Apple and Sony are given enough space for discussion.
Literature Review
In the age of globalisation, knowledge is both a product and resource. Organisations are now focused on knowledge-based economies, and are more concerned with the knowledge people possess, or what is termed ‘people-embodied knowhow’. Firms invest much on intellectual capital. (Rodriguez and de Pablos, 2002, p. 174)
Companies attain competitive edge through constant innovation. The first periods of the new century marked profound shifts in organisation’s strategies with aims for talents, technologies and customer’s focus and loyalty (Venkatraman and Henderson, 2008, p. 258). Organisations keep constant contact with customers, looking for ways to satisfy their needs and wants. Good customer relation is an important aspect of business (McColl-Kennedy & Schneider, 2000, p. S884).
Meeting the customers’ needs and wants is a business trend in the age of globalisation. Organisations now aim for customer loyalty while keeping cost of production low. This is shooting two birds in one shot but difficult to achieve; difficult because meeting the customers’ needs and wants at the same time minimising cost of production do not ensure quality product or service.
Apple and Sony are two of the world’s leading organisations in the electronics and technology industries. Both organisations have their own unique brand of management and handling of human resource, but they both adhere to the dictum that meeting customers’ needs and wants can lead to the success of their objectives.
Nevertheless, both organisations also do not leave their employees behind as they promote and enhance work-life balance within their respective workplaces, also believing in the dictum that employee happiness is related to customer happiness. Satisfied employees result in quality work.
HRM Paradigms
There are two paradigms focusing on HRM. The universalist paradigm, which is dominant in the United States, is widely used elsewhere. This paradigm assumes that the purpose of the study of HRM, and in particular strategic human resource management, is to improve the way human resources are managed strategically within organisations (Harris et al., 2003).
The contextual paradigm is concerned of what is in context and the reasons behind. This paradigm is not helpful in regions like Europe, where significant HR legislation and policy is enacted at European Union level (e.g. freedom of movement, employment and remuneration, equal treatment) as well as those of particular countries or sectors (Brewster et al, 1996 cited in Harris et al, 2003).
However, the universalist paradigm has strength – a simple, clear focus, a rigorous methodology, and clear relationships with the needs of industry.
HRM is now considered the determinant factor in the success or failure in international business. The success of global business depends most importantly on the quality of management in MNCs. There is a shortage of international management talent that constrains implementation of global strategies (Scullion and Paauwe, 2004).
There is a lot of challenge placed on the manager in managing an organisation of different culture; this puts his expertise to the test. Along with this line of thought is the concept on comparative human resource management that explores the extent to which HRM differs between different countries or between areas within a country or different regions of the world.
International HRM examines the way in which international organisations manage their human resources across these different national contexts. There are complex problems or issues found in international context which are not found in the national setting (Harris et al, 2003).
International HRM handles different institutional, legal, and cultural circumstances which the organisation has to face in its operations. Then, it has to look at other management practices like cost-effective ways that can help the organisation. Obviously, countries differ in many situations, for example policies, and so forth. A performance appraisal system may work in the United States but not in other countries like the Middle East or other developing countries.
Human Resource Management
Technological advancement and continuous innovations in HRM have motivated organisations and businesses to react to changes in the global competition. Organisations have to reorganise, reevaluate and reprogram outdated functional programs and activities, and realign them to the present trends for improvement and competition. Personnel and field people, ordinary employees, including middle- and top-level management have to refocus along the line of technological innovations.
External and internal environments of organisations are becoming complex; they are handled with a globally-oriented brand of management, with the aid of Information Technology. Corporate management is now handling a global-scale type of management, requiring different kinds of strategy, which is very much different from the traditional one.
Advancement in technology is fast; innovations are applied every minute. There are new inventions, new technology introduced every minute, and new infrastructure allowing business-to-customer and business-to-business interaction. This spawns databasing or shared repositories.
The internet has revolutionised business functions and introduced countless innovations in the globalised world. Technology paved the way for information revolution, knowledge-based economy, and various kinds of learning in the global environment and setting.
The people are the organisation’s greatest asset, and human resource is to manage or maximise this special asset. A definition of human resource management is that it “emphasizes that employees are critical to achieving sustainable competitive advantage; that human resources practices need to integrate with the corporate strategy, and that human resource specialists help organizational controllers to meet both efficiency and equity objectives” (Bratton, 1999, p. 11).
The definition emphasises human resource potentials, including their talents, skills, training or areas of expertise for the strategic advantage of the organisation. An HRM concept holds that human resource management systems and the organisation structure should go along with the organisational strategy. Four functions can be laid out along this concept, and these are selection, appraisal, rewards and development, and managing people. (Armstrong, 2006, p. 4)
HRM has several objectives and these are: for strategic integration, commitment, human capital investment, cultural management, and total quality management (TQM). (Talloo, 2007, p. 247)
Human resource policies should be integrated with strategic business planning (Legge, 1989, cited in Armstrong, 2006, p. 13). HRM stresses on the integration of human resource policies with strategic planning. HRM however is internally coherent (Armstrong, p. 13). HRM is “a set of interrelated policies with an ideological and philosophical underpinning” (Storey, 1989).
Recruitment and Selection
An important topic in this analysis paper is recruitment and selection. Harzing (2004, p. 251) provides three types of orientations for multinational corporations (MNCs). These are ethnocentric, polycentric and geocentric.
- Firms with ethnocentric staffing policy prefer to appoint parent country nationals (PCN) to top positions in their subsidiaries.
- Organisations which follow a polycentric staff prefer to choose host country nationals (HCN).
- Firms with a geocentric staffing policy simply choose the best person, regardless of nationality. They are called third country nationals (TCN).
Performance Management
Performance management is an HRM function that focuses on improving the performance of employees. It aims to emphasize the employees’ capabilities and individual talents that should contribute to the entire performance of the organisation. Performance management also aims to provide the means through which the staff can provide better results in such a way that the customers will be benefitted in the end (Armstrong, 2000, p. 1). Performance management strategy focuses on what is involved in managing the organisation. This is managing within the context of the business. The organisation has to let every employee know that performance management strategy concerns everyone in the business – not just managers. (Armstrong, 2000, p. 2)
On the other hand, managers are not the only ones accountable for their performance, but responsibility is shared between managers and team members. The strategy should be to involve everyone in the team, and that everyone is jointly accountable for the results; if something goes wrong, all should be blamed for the fiasco.
Performance management also involves communication, this time between the supervisor and the employee. Both have the reciprocal need to communicate what needs to be done in order to establish a clear understanding for the employee’s job function, on how the employee can contribute to the success of the organization’s objective, and how to do the job so well to make the entire process of work a success. (Bacal, 1999, p. 3)
Performance management is concerned with improvement, employee development, satisfying the needs and wants of the customer, and also satisfying the stakeholders’ expectations. (Armstrong, 2006, p. 215)
Apple Inc.
Human resource is a strategic partner in Apple’s advance to the twenty-first century, with new innovations and new products.
Apple is one of the leading innovators in computer and emerging technologies, and it seems it cannot be beaten by competing giant like Microsoft. Steve Jobs, one of Apple’s founders, said, “The trouble with Apple is it succeeded beyond its wildest dreams. We succeeded so well, we got everyone else to dream the same dream.
The rest of the world became just like it.” Steve Jobs was ousted by the board many years after he helped found Apple, but later came back to resurrect it. Whatever happened and went wrong along the way is part of any success one can experience, or any success of an organisation.
When Apple Computer started its vision, everything then referred to technology; hence the name. But its makers and founders realised that it has to be more than just technology. Apple has to survive as an organisation to meet the needs of its customers and to its many stakeholders. It changed its name to Apple Inc., a more accurate and competing name. It is a leader when it comes to products and services.
Apple started its humble beginnings in a garage, met ‘turbulences’ and tests along the way as an organisation, and now it is a leader in the marketing of PCs, iPods, iPhones, and other high-technology materials of the new century. Apple is a success story. In 2007, Apple was Number 1, 3rd year in a row, in the Top 50 Innovative companies in the world. Google Inc. (NASDAQ: GOOG) was Number 2, while Toyota was Number 3. (Dalal, 2007, p. 1)
It started as a computer-selling company until it grew into a large global organisation specialising on multi-media products and services. Apple’s marketing of its various technology products involves integration or the use of the Internet to market emerging technologies. How these technologies are introduced and sold to the market are one of the highlights for this paper.
Human Resource Practices
Apple Inc.’s commitment to innovations is rooted in the strategy of human resources. It metamorphosed from a computer company into a broader media and entertainment company, which is based on superior design and supported by a close-knit of partners and alliances.
Apple Inc. has to go with the tide of globalisation. Outsourcing is a new trend in global organisations. Seventy percent of Apple computer components are outsourced. Outsourcing activities are partnered with Chinese outsourcing companies. (Zivnuska et al., 2007, p. 57)
Outsourcing creates a strategic advantage for Apple Inc. It has revolutionized processes in the workplace, provided tools and valuable data and information to managers and employees, shortened workloads, and had done many things of great importance to businesses and organisations. Outsourcing has produced a distinct kind of industry. It is also the result of the internet’s emergence as a primary provider of service for businesses and organisations.
The company also encourages managers to assign work based on their competencies, and shuffle employees between departments. This particular HRM function allows for a transfer of technical know-how, or knowledge sharing. There are disadvantages to this kind of HR practice. Szulanski (1996) called this the internal stickiness within the firm.
Organisations usually apply and transfer best practices within the firm, but there are barriers that impede the transfer of knowledge. Szulanski however said that the movement of knowledge within the organisation can be seen as a unique learning experience for the individuals in the workplace.
The success of Apple can be attributed to a clever and successful management of human resource. As music, movies, and photography were becoming digital, Jobs introduced elegant and simple devices which attracted millions of customers, particularly the young. Apple also focused on counterculture themes.
Apple management chose partners carefully by having close relationships with artists and music groups, for example the U2. Apple’s attention to business strategies went as far as convincing, and gaining the trust of, companies for distributing Apple products. (Paley, 2008, p. 141)
The management style of Jobs also worked in Apple. Jobs provides advocacies and manages work personally by controlling all aspects of a product, from hardware and software to the services they offer.
Most of the time, Jobs and his people spent coming up with the next product which becomes in-demand to match their other products which have been successful before. Jobs also sees to it that the company keeps in close contact with suppliers, and with suppliers’ suppliers. Jobs’ style of leadership is a model to emulate. His people sees him as some father image and a good leader.
This is one style of human resource management which catapulted Apple to greater successes. Paley (2008, p. 3) comments:
“Apple Inc. has been a niche player in the PC market. In 2002, overall PC market sales leveled; Apple’s share was hovering in the 3 percent range. Stephen Jobs moved aggressively by launching iPod, a very-small digital handheld music player. It was estimated that the original sales for this iPod reached 12 million units and a growth of 74 percent annually for several years.”
One striking advantage of the device IPod is that it can work on almost all PCs. Then in 2007, Apple again made another bold move by introducing the innovative iPhone. Apple’s boldness is supported by the workforce’s sound planning led by Jobs.
They also provided an almost accurate estimate of their resources, coupled with skilful and competitive planning, and their commitment to the organisation’s objectives. They took risks but considered many options before proceeding to do their bold actions, considering the company’s finances, supply chain capabilities, and the talents and skills of the employees. (Paley, 2008, p. 3)
Apple’s website is a state of the art showcase of some of the best desktop video in the world. Individual customers, major studios, and permanent customers go to their websites to preview million-dollar movies. From the Apple website, the trailer of some of the sci-fi blockbusters like the ‘Star Wars: Episode One’ and the ‘Lord of the Rings’ have been downloaded for over 25 million times and 1.7 million times in a single day, respectively.
The Mac family, the iPod family, iPhone, and iTunes, are said to be relevant in the present generation. What is important is Apple’s choice of demographics. These kinds of products are important to the young who value music with accompanying video. Apple has tapped the emerging market with emerging technologies coupled with the Internet. There is no other more important innovation than this. And it has given Apple billions of profits.
Another important human resource common that can be attributed to Apple is its strategy inside the organization – it keeps trade secrets. Does Apple keep secrets like technology or trade secret? Actually these are not secrets anymore. Apple, like any other company, keeps secrets for itself, but these are those that should not be kept in the open as it will hurt its operations, and perhaps its profits.
But technology wise, they have already divulged their secrets a long time ago. What are being kept are those that are still in the infancy stage, or those that are still to be copyrighted. Like any other company, they need the protection of the law. Moreover, before they reveal their secret, they have to be protected first.
Jobs and his engineers employ an Apple ‘compressionist’, a talented technician or engineer who dedicates his time capturing or downloading movies from the web or the internet.
Innovations, strategies, and secrecy are some of the important ‘tools’ that Apple used along with new technologies in meeting the needs and wants of its customers. Apple deviates from the ordinary; it’s rare, it uses originality. The success of Apple is due to many factors – technology and people; people who are innovative, creative, hardworking, and ambitious employees and managers.
Sony corporation
The company considers their employees as “the most valued asset” (Pattanayak, 2005, p. 3). The employees are considered a part of the organisation. Founder Akio Morita says that their company treats the employees fairly and that they are very valuable to the organisation. The magic is in how they treat their employees.
Sony’s recruitment and selection of personnel follows the ethnocentric orientation. The top management of Sony prefers to appoint parent country nationals (PCN) to managerial positions at their branches and subsidiaries. Lower level positions and jobs are being filled up by local employees.
This set up is being followed by the US Sony Corporation. For example, the Sony Corporation of America, which is owned by Sony Corporation of Japan, takes care of local HRM functions, but international operations are being handled by top Japanese executives. (Aswathappa and Dash, 2008, p. 138)
This kind of set up has both advantages and disadvantages. An advantage to this set up is that PCNs have the knowledge and familiarity of the organisation’s goals and objectives, along with the home country’s orientation and background. But a disadvantage is the PCN’s lack of knowledge to cultural needs of the local population. The manager who comes from Japan will have difficulty in responding to the problems of employees. This manager has to undergo cross cultural training in order to be responsive to the needs of the local population.
The strategies of Sony are rooted in the Japanese skilful management of human resources. Sony focuses on its valuable asset, the people who commit themselves to pursue the goals and objectives of the company. Sony empowers it employees who in turn give back by serving their customers to the best of their ability.
This could be one of the reasons why they choose the PCN model, or the parent country national. Managers are Japanese nationals who know the objectives and the psyche of the Japanese people for service and quality. Managers of this type do not deliver low cost and products with less quality. These managers are used to quality products and quality service. They have the ability to make good and precise decisions in problematic situations. They ensure that the interests of the company are protected.
Conclusions
Our two case studies, Apple Inc. and Sony Corporation, are two contrasting management models; contrasting in the sense that Apple Inc. is an American company while Sony is a Japanese management model. But what makes the two an interesting topic for discussion is that they are both successful in management, the American and the Japanese.
American and Japanese HRM strategies are also different.
During the early stages of the practice of HRM and later the immergence of international HRM, there were clear differences between American and Japanese personnel practices that led to a more integrated strategically oriented system for managing employees. (Cray and Mallory, 1998)
McKern (2003) stated that before this time, during the early years of the post-war development of the modern international corporation, organisational structures evolved slowly in response to geographical and market diversity. It was easy for management to change structures incrementally.
But now changes in the organisation are based on complex environmental factors. International human resource management has a big role to play in the new global setting. By making full use of human resource, a firm will attain competitive advantage.
Human resource management seems to point its origin to the American concept. But like quality management, the Japanese have perfected it, or at least, made it a part of their operational practices.
Due to rapid growth in industrialisation and the emergence of globalisation, there’s a renewed interest on this phenomenon. Organisations and businesses have become global as a result of technological innovations, and the introduction of more development in communications and transportation.
Companies need personnel and departments in order to grow in this so-called global village. But companies and organisations also have to belt-tighten, lower operational costs and minimise wanton spending. What they need are more personnel with less costs for the hiring and training of these personnel.
Most of the business functions and responsibilities cannot anymore be performed by existing departments with their limited personnel. Companies have to create more departments, recruit more personnel, and add more duties and responsibilities. They need middle- and low-level managers and staff to answer to customers’ demands.
In the business world today, outsourcing is almost ordinary as any other function of business. Advancement in communication has allowed everyone and every business organisation to be connected to the world anytime. The world has never been tightly interconnected as it is today. These connections have been realized at almost no cost to the customer and at a reasonable cost to the supplier.
HRM is continuously challenged with the operational activity of the organisation. Firms have to hire and employ personnel with the necessary expertise. There are changes, paradigm shifts, new industries formed in the process, and more challenges occur as new culture in the workplace is introduced. Human Resource strategy plays a more significant role in the implementation and control of the international firm.
Our two case studies use HRM to further their objectives. Although they have different management perspectives, styles and ways of handling human resource, both global organisations have been successful in their own right. Sony Corporation under the Japanese model is said to be way behind the United States who first started it all.
However, the Japanese have implemented strict guidance which allowed their businesses to succeed in the age of globalisation. We can also relate this to the concept of total quality management (TQM). The Japanese learned it from the Americans, but they are now leading in the implementation of TQM in business and manufacturing.
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