Introduction
LVMH is a luxury brand that is famous around the world. It was created in 1987 and boasts 50 luxurious brands that have a unique history and culture. The main aim of the organization is to improve its profitability in the industry. It also ensures that the authenticity of its brands remains at the highest possible levels while meeting its goals. Although LVMH started as an international company, it lacked human resource managers with international expertise. This led to the company choosing to invest in ensuring that it is able to acquire these types of managers in order to ensure the development and growth of the organization.
Most of the companies that comprise LVMH are located in France. The group is structured around five business groups where each consists of several strong brands. The group has 50 companies which in turn have 450 subsidiaries. These companies run almost independently where each has its own president and an executive committee which makes decisions about some of the activities of the company.
LVMH International Mobility Program
The main features of the LVMH International mobility program include the idea that the company held. The company believed that the development of its managers was not through subjecting them to formal training but by increasing their mobility. This means that the managers moved to different countries and interacted with new environments to aid in their development. They were also subjected to new challenges and experiences which enabled them to be able to cope with the current changing needs of the business environment. The company believed that staying in the same geographical region and being subjected to the same challenges and environment does not result in the development of the managerial skills of an individual.
The company also did not support the development of experts from outside their areas of expertise in regions that are outside their home areas. This is because the company believed that allowing this to happen will not be beneficial to the company and instead it will only benefit the person involved.
The company also found out that promoting the practice will not be cost-effective as far as the company’s economic front. The experts who are accorded mobility, therefore, are given this on the basis of their carrier paths and are only subjected to tests that will be helpful in their development in their field of study. Exceptions however exist but the overall intention is to ensure the development of the person in training and therefore benefit the company.
The company also ensured that it offered exciting career development prospects as opposed to economic incentives. The company was in a position to offer economic incentives and also the package that they offered was amongst the best in the market. However, the development of the managers was their primary objective, and offering the chance to develop in their field of work as they gain more experience proved to be a very important part of their development.
The company also offered its training managers more challenging opportunities and the freedom to work and make important decisions. These factors were important since they encourage the involvement of the training managers in the actual processes of the company decision making and consequently acting as a very important part of their learning curve.
Another feature is the use of expatriates. This did not mean that local talent was not available but ensured that the mix between the local people and these expatriates ensured that the sharing of experiences and information was two ways. The local people got the chance to learn a lot from the expatriate and at the same time, the expatriate learned from the local people. This relationship was therefore symbiotic since the development of the training manager also resulted in the development of the local talent that is available in the area where the expatriate is placed. The expatriate, therefore, was able to develop his/her skills and also gain exposure as a result of being in a new environment. Sometimes the expatriate was posted in a given place to ensure that he/she protects the interests of the group.
Human resource management also focused on ensuring the globalization of its top management. This was by ensuring that they recruit highly promising managers in their fields and aiding them in their development. This results in the group having a human resource department that has representation from most parts of the world and therefore globalizing it (William, Pamela and Kacmar 75). This is important in the growth of an international business since the diversity of the cultures and thoughts of all these managers may prove important when it comes to making important business decisions for the company.
The whole nature of the performance appraisal system is also another feature of the LVMH international mobility program. It ensured that the system was not only result-oriented but also focused on the implementation and coming up with new ideas. This is important since the development of a company cannot only be measured by the returns from its investments. The ability to cope with the changing business environment and introducing new products to the market also ensures the growth of a business entity (Cathy 86). The company, therefore, focused also on the ability of its managers to come up with new ideas that would help them in their development and at the same time ensuring the growth and profitability of the company.
The length of time in which the expatriates stay in a foreign country is limited. This period is limited to two to three years to ensure that the expatriate does not lose the ties with his/her home country. At the start of a career in LVMH, one is initially attached to his home country for a given period of time in order to gain experience while still in his or her home country. The home country is maintained throughout the period in which the person will be an expatriate. As much as the expatriate will be involved in moving throughout the world, at some point he/she will be required to go back to his/her home country and also aid in the development there.
The LVMH also offers support for the spouse of the person who chooses to become an expatriate. This is because many people who have parental responsibilities are found to not consider being mobile. This limits the organization to only consider the young graduates who do not have these responsibilities. By offering support to the spouse, the number of the older group that is accepting to be part of the mobile team is increasing.
The security benefits are also another important feature of the LVMH international mobility program. The expatriates are subjected to security benefits that compare to those that are available in their home countries. They are not subjected to penalties that may make their benefits different from that they would have been subjected to had they been working in their home country. Benefits such as retirement benefits need to be extended even when the expatriates are in a foreign country. Failure to do this result in putting the expatriates in a disadvantaged position and this may impede other expatriates who had the desire to join the team (Cathy 125).
At the time, LVMH was not successful at ensuring the mobility of key employees of any nationality. This was because this move was considered to be very risky as stated in the case study and at that time the company was not ready to take the risk. The expatriates were first required to work in their home countries for a given period of time and at the same time being evaluated. This was to ensure that they had gained valuable experience before they were exposed to different cultures and working conditions.
The deployment of the expatriates was also affected by the reluctance of the expatriates to be mobile because at the time the incentives to move to these places were not as developed as they are at the moment. The organizations also had not established their markets across the world and therefore the key employees of the organization were kept where they would add move value to the organization as opposed to moving them to new places which will not aid them in their development. This would result in the company suffering losses at the expense of the benefit of the expatriate and this was not accepted.
Career Mobility
Career mobility is an important factor when considering the nature of the business environment and the changes that this environment faces. There are measures that need to be taken in order to ensure that this important part of the employment world is maintained. This is because it results in influencing the group positively and also produces managers who are exposed and are ready to lead the company to greater heights. The methods that may be used to foster career mobility within a group are discussed below.
An important factor in ensuring that career mobility is effective is ensuring that there is no optimal career path. When the career path in an organization has optimal positions, then the employees will want to get a place where they will get a position that surpasses the current optimum position given by the group. The carrier path should be made in such a way that it is flexible and therefore a person can always switch to a given line provided he/she has the qualifications for that particular position. Limiting the available options in the organization will ensure that the employees move in order to find another job which to them will be more favorable. The career path which is clearer in terms of how someone is able to rise through the ranks is also preferred (Phyllis 226).
Another factor that fosters carrier mobility is the structure of the company and how its culture affects the employees who work in the company. The working conditions of a company play an important role in the extent of time the employees will stay in a particular company. If the conditions are unfavorable, the employees may decide to quit the current work and go to another job which may be offering less in the form of incentives but value the quality of the work delivered by the employee.
Therefore setting good structures in a company and allowing the employees freedom in doing their duties as long as it does not affect the operation of the company negatively can act as a way of maintaining them in the group. On the other hand, failure to take good care of them and the working conditions will result in them leaving to find a place where the conditions will be better.
The education system also acts as a way that offers a way to foster career mobility. The system allows people to study the field of their choice. This means that a person can decide to change his/her professional field at any time of his/her choice. The ability to be able to do this means that if the incentives are better in a different field, through studying and acquiring the qualifications of that field a person can be able to shift to the other job. The advancement in technology has also made it possible to be able to study online and this also acts as an advantage since a person does not have to resign from their current job in order to register for the studies they intend to be involved in.
Another factor that fosters mobility is the dynamism of the working environment. This may involve how activities such as issuing promotions in the company are carried out and how often they take place. The factor of what is considered before someone is promoted also comes in. In some organizations, career growth is limited and when it happens it is not based on merit and service delivery. In these cases, it is based on interpersonal relationships between the employer and the employee.
These circumstances may force an employee to quit the job and move to one that will enable him/her the chance to advance in his/her career path. The static nature of some organizations where a person may remain in a particular position for his/her working period encourages mobility in such a dynamic working environment. This dynamism is brought about by the modernization of the society which demands vibrant individuals who are driven by the desire to always get better.
Career mobility is not necessitated only by offering more benefits as opposed to organization culture. The organization culture in more situations plays an important role in fostering this activity. The culture may involve the conditions that affect the employees directly (Phyllis 241). These may be social, cultural or economical. For example, some companies may have poor working conditions yet they are among the market leaders when it comes to the incentives and payments they give to their employees.
Such companies may find it difficult to hold on to some of their most effective employees who may opt to move to other companies which may be offering fewer incentives. In some situation the opposite of this happens but research shows that this happens less often. Companies therefore need to ensure that their organizational culture favors the working of its employees even when they offer more incentives compared to other players in the market.
Works Cited
Cathy, Lee Gibson. Professional in HUman Resources. Upper Saddle River: Pearson, 2007. Print.
Phyllis, A Wallace. The Career Mobility of Young Managers. Boston: Ballinger Publishers, 1989. Print.
William, P Anthony, L Perrewe Pamela and K Mitchele Kacmar. Human Resources Management. Reading: Dryden Press, 2009. Print.