Scenario
Shukran Shoe Company is an emerging manufacturing firm with its headquarters in Dubai. The firm specializes in all types of shoes. It has been in operation in the local market for about two decades. Over this period, this company has registered impressive growth despite the competition from multinational corporations in the local market. In its expansion program, the firm recently acquired two new subsidiaries India and South Africa.
These new subsidiaries specialize in the production of sports shoes. In the past, Shukran Shoes Company had made an unsuccessful attempt to start the new line of sports shoes. Acquisition of these two firms in different countries was a creative new approach to producing this new line of products. This move is in line with its strategic goal of becoming a global leader in all types of footwear. The firm has taken control of the local market and is now moving to the regional markets.
The decision to acquire these two new subsidiaries means that this firm will have to embrace change. The management has been employing local workers in its manufacturing plants. Most of its junior employees and mid-managers are Emirati nationals. At the top management level, the firm has two Saudi nationals and one Indian. At the junior level, the firm laid little emphasis on the academic qualification of these employees. The main focus at this level was their capacity to undertake the duties at the manufacturing plant. The mid-managers and marketing officers have college diplomas and degrees. The top managers at this firm are highly learned individuals with postgraduate degrees in various courses relevant to the departments they head.
Cultural Issues
According to Nini, Caran and Yim (2013, p. 54), cultural issues are very important when analyzing the ability of a firm to operate successfully within a given market. Shukran Shoe Company has been operating in Dubai for the last two decades. The national culture in the country has defined the organizational culture used at this firm. One national cultural value that has been very important in defining the organizational culture is religion.
Almost over 98% of the employees at this firm are Muslims. On Fridays, they have to be allowed to go and pray for about an hour before they get back to work. In fact, the firm has constructed a hall where the employees can rush and make a prayer, especially at lunch hours before they can continue with their work. The employees approach their respective assignments as a single community. They prefer helping one another instead of taking an individualistic approach when assigned various tasks. This partly explains why the company has experienced success over the past years.
The decision to expand to these two new markets poses a new challenge to the management when it comes to managing organizational behaviour. In India, cultural practices are very different from those of the United Arab Emirates. The same case applies to South African culture. Most of South Africans are Christians. Muslims make a very small percentage in both India and South Africa. The management of this firm will, therefore, be forced to understand how to inculcate an organizational culture fit for these two different environments. The new cultural values must be in line with national values. The top managers will have to embrace a change in organizational culture (Caldwell, Truong, Linh &Tuan 2010, p. 178). The firm will have to work under a highly diversified culture at the top management unit.
Ethical Issues
As Shukran Shoe Company makes a move to operate in the global market, it must be ready to deal with the global ethical concerns in order to achieve sustainability. According to Greenwood (2002, p. 265), maintaining ethics is of critical importance for a firm that seeks to achieve success in the new markets. Ethical issues will be looked at from two perspectives. The first perspective will be the ethical behaviour of the employees. According to Shen (2011, 1358), employees are always in constant interaction with the customers. They are the ambassadors of the firm to the community in which a firm operations (Gond, Igalens, Swaen & Akremi 2011, p. 118).
They must be responsible for every action they take. They must respect the customers and members of society in general. This will play an important role in developing a positive image for the firm. To the managers, Cooke (2011, p. 14) says that they must understand that junior employees always emulate their actions. They must lead others into embracing practices that will have a positive impact on the firm. They should be flexible to change and be ready to use new approaches of operation as soon as they are introduced into the market. At the corporate level, this firm will need to conform to the laws and regulations in the host countries to avoid legal suits. Issues concerning environmental pollution must be addressed in a convincing manner.
CSR Issues
In the current business environment, corporate social responsibility has become an integral part of the strategic activities that a firm cannot ignore (Grimshaw, Rubery & Almond 2011, p. 6). The operational activities of the Shukran Shoe Company have a direct negative impact on the environment in terms of wastes. Although the management of this company has been keen on coming up with programs to reduce emissions and other pollutants into the environment, there is still need to participate in community programs that will help enhance the social welfare of the locals. According to Guest and Woodrow (2012, p. 110), many manufacturing companies have been focusing on the planting of trees, getting rid of electronic and plastic wastes within the environment, among other activities that can help improve environmental conditions. This company may consider undertaking such activities. Other CSR activities that this firm may be faced with are the need to participate in relief programs in case of natural disasters.
HR Implications
The decision to go global will have implications in the human resource functions at this firm. When the firm had the United Arab Emirates as the only country of operation, hiring of employees was simple. Now that this firm has moved to new markets abroad, it will have to find effective recruitment strategies that will be acceptable in the host country. The HR department will have to find a way of choosing its employees from the three categories of parent country nationals, host country nationals, and third-country nationals. All the junior employees and a number of mid-managers will have to be host country nationals. Technocrats who understand how to operate and manage production machines can either be host country nationals or third-country nationals. In the top management unit, the firm may need to have a few parent country nationals, especially at the top-most position. Other top managers should be host country nationals and third-country nationals based on their qualifications.
List of References
Caldwell, C, Truong, D, Linh, T &Tuan, A 2011, ‘Strategic Human Resource Management as Ethical Stewardship’, Journal of Business Ethics, vol. 98. no. 1, pp. 171–182. Web.
Cooke, F 2011, Social responsibility, sustainability and diversity of human resources, International human resources management, Sage, London. Web.
Gond, J, Igalens, J, Swaen, V & Akremi, A 2011, ‘The Human Resources Contribution to Responsible Leadership: An Exploration of the CSR–HR Interface’, Journal of Business Ethics, vol. 98. no. 6, pp. 115-132. Web.
Greenwood, M 2002, ‘Ethics and HRM: A Review and Conceptual Analysis’, Journal of Business Ethics, vol. 36. no. 3, pp. 261-278. Web.
Grimshaw, D, Rubery, J & Almond, P 2011, Multinational companies and the host country environment: International human resources management, Sage, London. Web.
Guest, D & Woodrow, C 2012, ‘Exploring the Boundaries of Human Resource Managers Responsibilities’, Journal of Business Ethics, vol. 111. no. 2, pp. 109–119. Web.
Nini, Y, Caran, C & Yim, W 2013, ‘Navigating Corporate Social Responsibility Components and Strategic Options: The IHR Perspective’, Academy of Strategic Management Journal, vol. 12. no. 1, PP. 39-57. Web.
Shen, J 2011, ‘Developing the concept of socially responsible international human resource management’, The International Journal of Human Resource Management, vol. 22. no. 6, pp. 1351–1363. Web.