SLP and International Business Analysis Essay
Excerpt from Essay :
political scenario illustrated that governments all over the globe are making their immigration rules more stringent because of the rise in terrorism; the implication of this phenomenon is a decrease in international traveling, which endangers continuance of a number of airlines, including Nigeria's Arik Air (Eze, 2010). Hofstede's power distance dimension denotes the degree to which unequal distribution of power is anticipated and accepted by the lower ranking members (in terms of authority), of organizations and institutions in the nation under consideration. USA's score on this dimension is relatively low (40). Power distance deals with members of a society not being on an equal footing with one another; the dimension conveys a particular culture's outlook towards power imbalances among countries, as well. Furthermore, the inequality that prevails in a given society is equally approved of by its leaders and followers. Nigeria demonstrates a high power distance score (80), signifying its citizens' acceptance of a hierarchical system wherein each individual has a grade; there is no additional justification required. Organizational hierarchy exhibits intrinsic inequalities; organizational structure tends to be centralized, with the subordinates anticipating instructions of what their role is, and the model boss being a well-meaning autocrat. Nigeria and the U.S. differ by a score of 40 on the dimension, implying that hierarchical structures are more dominant in the former nation, with every individual having a specific, unquestionable place, and requiring no further explanation (Countries - GeertHofstede, n.d).
With the above implications in mind, a U.S. commercial airline needs to present before its customers a choice of numerous alternatives, allowing them significant bargaining power, which can also be seen in the fact that manufacturers of aircrafts strive for increased airline participation in aircraft design customization. But, owing to steep switching costs within the airline sector, suppliers' bargaining power is mediocre (Kotler et al., 2009).
Nigeria's score on Hofstede's individualism dimension is low (30), indicating the nation to be collectivistic. This is evident in Nigerians' strong, lasting commitment to any group that they belong (family, organization, etc.). Collectivist societies value loyalty as a paramount virtue; it takes precedence over almost all other social principles and laws. Powerful bonds are fostered, and all individuals assume responsibility for others in their group. Here, offence results in humiliation and shame, and the relationship between employer and worker is viewed in terms of morals. People treat organizations like their family, promotion or hiring decisions take into consideration workers' in-group, and management refers to group management (Countries - Geert Hofstede, n.d).
The U.S. depicts a high individualism score (91). In individualistic countries, citizens are expected to care merely for themselves and immediate family, whereas, in countries that are labeled 'collectivist', individuals form part of groups, which see to their well-being and are responsible for them, in return for absolute loyalty. Hierarchy, in organizations in the U.S., is instituted for the purpose of convenience and structure --subordinates can access their superiors more easily, and managers can make the most of teams' and individual staff members' expertise. Subordinates as well as managers are conferred with and, there is regular information sharing. Simultaneously, intra-organizational communication is, to some extent, direct, informal, and participative. Social bonds in the U.S. are loose; everyone is expected to look only after themselves and members of their immediate family, without over-reliance on governmental or social support. Moreover, America demonstrates a great degree of geographic mobility. Though Americans are considered the world's best joiners, the men, in particular, face challenges with cultivating meaningful friendships. They are habituated to communicating and having business dealings with individuals not very familiar to them. As a result, they do not show reluctance towards seeking or procuring desired information from prospective counterparts. On the business scene, American company employees must display initiative and self-sufficiency. Lastly, in the exchange-based context, it has been noted that promotion, hiring and decisions hinge on proof of competency or merit (Countries - Geert Hofstede, n.d).
Nigeria's score on the dimension of uncertainty avoidance is 55. This intermediate ranking proves no clear preference. Uncertainty avoidance depicts the degree to which any given society feels endangered by unfamiliar or vague situations and creates institutions and beliefs in an attempt to avoid, stave off or counter such situations. America's score on this factor lies below average (46). Uncertainty avoidance pertains to how a particular society copes with the issue of unpredictability of the future. Nigeria's higher score, compared to that of the
U.S., suggests that Nigerians feel more vulnerable when faced with vague and unfamiliar situations than Americans do. Further, American society is rather receptive to inspiration or views from anybody; everybody is free to articulate and express his or her thoughts and feelings. This poses a challenge, as the American employer will anticipate or even expect that local (Nigerian) staff can easily handle uncertainties of the future, and will therefore, not feel vulnerable in the face of unfamiliar/vague situations. As such, American society does not demand a great many rules; Americans are more emotionally-guarded than members of higher-scoring societies (Countries - Geert Hofstede, n.d).
The American firm must adopt a geocentric human resource (HR) strategy for managing Arik Airlines. Geocentric hiring implies recruiting the most competent of candidates, irrespective of their nationality (background). This is a global approach- one that fosters universal integration; it believes that individual facets of a company all contribute uniquely to its overall functioning. A geocentric staffing policy gives priority to skill and suitability of individuals for a particular post over nationality. What passport one holds is unimportant in a geocentric company, in matters of promotion, rewards, and growth in the organization. The advantage of a geocentric strategy is the organization's ability to establish a culturally diverse executive board comprising members hailing from different countries. Geocentric policy surmounts the federation shortcoming that characterizes a polycentric staffing policy; also, it facilitates resource sharing and collaboration across units. Bearing in mind the large amount of Arik Airlines employees required in America, it would also prove more convenient to conduct business in their own domain when there is a difference of culture (Williams, 2010; Rao, 2010).
The responsibility of organizations that send employees overseas expands to cover more than just elementary HRM functions. For instance, hiring, development and training are given particular emphasis in such companies. They cannot simply choose employees most suitable for placement in a foreign division, without regard for the families they will be taking along to the unfamiliar overseas cultural environment. Numerous employees who are assigned overseas come back unsuccessful simply because of familial adjustment issues. Therefore, it is imperative to arrange foreign language training for the selected individual and members of the employee's family a prior to departure. All prerequisites, such as visas to undertake the journey, must be made available on time. Moreover, the employer must ensure preparation of a residence for the family in the other country, school enrolment for the employee's children, and family health services. The geocentric organization makes use of a global integrated approach and hires and manages its workforce on an international basis (Treven, 2001)
America's HRM system, when compared to that in Nigeria, is rather strict- well-structured and formalized; organizations need to abide by federal HRM rules in the process of hiring candidates, while decision-making in the organization needs to be in line with organizational requirements, and economic and political factors. Therefore, there is a call for hiring specific, competent HR from the local candidate pool. American labor law provides better remuneration and accommodation benefits to staffs. However, Nigeria's population is already relatively high. The management of Arik Air believes that the local workforce is not competent enough; furthermore, owing to its high population density, people work for lesser pay, giving rise to issues of social inequity in the nation. The Nigerian government had chosen to ignore the problems faced by domestic workers until recently. An effort is underway to equalize local work conditions. The U.S. firm must take into account the prevailing problems and HRM structure of the organization while employing workers from the local candidate pool. While developing its HRM strategy in Nigeria, environmental factors (i.e., political, social, economic, and legal) need to be borne in mind. At present, for a majority of Nigerian companies, performance appraisal takes place via dialogue with employees; it plays the role of a mentor in general molding of employees to gain optimal performance from them (Treven, 2001)
While a geocentric policy is the preferred approach to staffing in this case, it may pose some difficulties as well. A geocentric strategy makes it challenging to counterbalance international priorities and domestic demands. It puts off tough local decisions till they cannot be avoided -- at a stage when they become costlier, more complex and pose more troubles than they would have, had they been addressed earlier. Geocentric approach may likely render it harder to hire qualified workers, and can reduce head office control over the overseas subsidiary (Treven, 2001; Rao, 2010)
Hofstede proposed "Power Distance' as a measure of…
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