HR-related issues of partial production shift to offshore locations

This report discusses the HR-related issues of a partial production shift to offshore locations for Crown Northampton, a shoe manufacturer. It covers risks, opportunities, and cross-cultural factors that need to be considered while shifting production to countries like China, Vietnam, and Ethiopia.

HR.-related issues

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
TASK ..............................................................................................................................................3
Explanation of scenario...............................................................................................................3
Risk, opportunities indulge in a move for expansion in other countries....................................4
HR related considerations and cross cultural factors requires to shift the production................6
REFERNCES:................................................................................................................................12
Books and Journals:..................................................................................................................12

INTRODUCTION
The report aims to provide various opportunities, risk and aspects of management for business
environment. Every business organisation work on the aim to achieve long term target by
creating expansion, brand name, customer reach and retention and undertaking opportunities.
Business get established with a foremost aim to make highest profit and be the market leaders.
Therefore, an entrepreneur is the one who brings certain ideas, creative thoughts and approaches
to regulate each business practices that must bring innovation and change into society and people
could experience valuable products and services. Therefore, Crown Northampton is a world
class superior small organisation that believes in fine quality and self made goods that have a
unique presence into market(Legorburu, Johnson, and Kerr, 2018). They are the finest
manufacturer of shoes and the company was established in 1908. The report is going to talk
about many risk, opportunities and challenges faced by company to start operation in the
countries like China, Vietnam and Ethiopia. Therefore, the report will present various issues and
what consequences the organisation have to face while working on offshore locations. These
issues mainly would describe as cross cultural barriers in language, believes of different people.
MAIN BODY
TASK
Explanation of scenario
The small business organisation are known for the great contributor in economy in terms
of income and creative positive impact with their sustainable and unique ideas of doing
business. Similarly, one of the supreme organisation that is Crown, the company is the finest
manufacture of shoes in Northampton. This city is situated in England and has known as the
main manufacturer point where all the shoes manufacturing takes place. The city comes under
the large coverage of UK due to availability of high quality resources such as material, labour
and technology. The company serve their handcrafted shoes across many countries and has large
customer base. But now, the company wants to move on the track for expansion in other parts of
countries like China, Vietnam and Ethiopia. For that instance, they require to analyse risk
involved while working oversees by identified market culture, people preference, technology
and legal restrictions. An organisation covers its cost by eliminate unnecessary labour cost and
fixed charges that create more wider space for earning profits. So that, The crown needs to keep

this technique while move for expansion. Also, there is requirement of effective and talented
employees as well as low costs factory workers in order to cover the margins and enable
profitability and productivity both in the organisation. The three cities are known as the
emerging market which provide many effective opportunities for the company. China is known
for the cheap labour supply and advanced technology which could promote effective working.
Vietnam has low cost production in terms of material and other resources. Therefore, it is
essential for the company to analyse the suitable market and their potential customer so that,
chances of failure would be neglect and best human resources practices must be promoted.
Risk, opportunities indulge in a move for expansion in other countries.
Risks are an integrated part of every business which reflects in every small or large size
organisation. As there is dynamic environment which keeps on changing at a fast pace which
give rise to new uncertainties and risk whether they are competitors, high cost labour and
technology or many others factors. On the other hand, opportunities are also there in every new
market , it is up to the entrepreneur how they analyse it and implement into their business. Some
of these are described below for The Crown company:
Risks:
Transfer of capital: it is the major risk for the small scale organisation to transfer their
capital assets and liabilities form one country to another, as it hold many legal formalities and
restrictions that may losses potential market opportunities. transferring capital as per the rule in
different countries systemic rule is time taking provide as it include labour supply, cots of tools
and equipments, hiring workforce and employees and many more. The Crown company needs to
look for investing a fresh capital in the manufacturing unit in new countries and create strict rules
of suppliers so that, the risk will get eliminated.
Risk of market demand: a business undertake a lot of different market requirement that
impact in the whole procedure of manufacturing and delivering foods and service into market.
Different areas have different customers who follows various kinds of trends and their cultural
believes. Due to which organisation may attempt failure to acknowledge the market properly.
Therefore, the Crown company needs to identify their potential customer and trends. China,
Vietnam and Ethiopia (Conrad, . and Kostka, 2017). For example, In Northampton, people like
to wear sober and classy shoes whereas in China, people look for some unique styles and
customisable designs so that, the company needs to manufacture products according to that.

Risk of labour supply: There comes the most impacted risk for a business who look for
expansion in different cities. It is fact that, talented employees are hard to find with cheap rates
and potential capabilities to achieve organisational objectives. It is also a risk factor for Crown as
they are not aware about the labour efficiency and their expectations as it may not match with the
expectation of company. This would create a barrier in HR management which is the most
crucial function. The company needs to look for labour expectation for example, Vietnam has
low cost salary employees who is ready to work effectively as the company does not have many
manufacturing units.
Opportunities:
Entrance into international market: it is the most vital opportunity for small business
to enter is international market and enable their operations. It gives rise to brad name and more
market capture which is must for long term survival into this competitive market. Crown
company could utilise their finest products and services in different countries and grab attention
of customer also set a competitive image for other companies. Therefore, it require effective
human resource and company standards that unfolds the areas for more profitability.
Market and product growth: enabling operations in different countries lead to many
market opportunities due to which the company would result in more market reach. Market
growth is essential for business expansion into international market as it attain huge customer
base and market potential. Therefore, Crown company would have opportunity serve their
handcrafted shoes into international market also which evaluated brand name and they could
cover large market under their control. As till the time, companies product only get deliver in
England and other neighbour cities but now company looks for expansion and start
manufacturing in countries like China, Vietnam and Ethiopia, it will lead to serve products to
new customer also so that, there will be rise in sales and profitability.
Cost benefits: There are many benefits an organisation could undertake by starting
manufacturing process in different countries. As other countries which are developed like China
have high technologies and low cost of materials, labour due to which, the company could cut
off the necessary cost like transportation, machinery, labour and enjoy a lot of benefits during the
long run. Crown company could enhance their production and supply into market by taking cost
control on manufacturing and production will be cheap and quantitative. Less cost production is

the main aim for Crown as they put a lot of efforts in making shoes which are handmade and no
machine is used.
By analysing risk and opportunities related with the international business, it has
identified that the crown company could undertake cost benefit, market growth and entrance into
foreign market by moving to other countries. But it also involves risks and uncertainties that
must be eradicate by formulating effective strategies.
HR related considerations and cross cultural factors requires to shift the production
The business wants to work in long terms for which they take decisions to expand
operation into other offshore locations. There are many consequences and issues come across
during the production in other cities which is require attention by the organisation as these issues
creates barriers in effective outcomes (Top HR Considerations for International Expansion,
2021). Cross-cultural issues are quite common at international level which included language
barriers, religious differences, interpersonal relations and many others. Every countries has their
different rules and regulations related to political interferences, demands and preferences of
people and rules regarding working hours, language usage, health related facilities and others
(Yu, 2017). HR manager is liable to ascertain all these consideration while recruiting and
selection employees within organisation. It is in control of HR manager to identify cultural
differences and try to fill them put by making a multilingual environment and focus on
coordination.
The issues are associated with legal, marketing, purchasing and logistics due to which
Crown company may face cultural barriers in performing all these departments as they will
require effective communication and group efforts to maintain department operations as per
desired objectives.
Cross cultural factors:
Cross-cultural is all about working with different tradition, religion and beliefs and
language. Crown company wants to settle their manufacturing and operations in China, Vietnam
and Ethiopia. All three countries follow different rules and legal requirements that impose some
rules regarding taxation, transportation of resources and labour workforce and many more. This
impact on working effectively and cultural differences create individual difference also. So that,
HR manager must identify these differences and works to maintaining equality for all. These
cultural factors could describes effective through Hofstede five cultural model.

Hofstede graph: Vietnam vs United kingdom

Hofstede graph: China vs United kingdom
Power index: This index shows that not all individuals are equal and have differences
into their power. Basically, it deals with inequality culture due to which the environment of
organisation become negative and must promote equality. It creates by distributing powers
unequally into organisation. The above graph shows that power distance index is high in United
kingdom as compared to Vietnam so that, Crown company needs to work on power distance due
to which HR manger needs to divide power equally so that all employees feel the same position
and maintain organisation culture.
Individualism: This cultural defines the society different in between individuals and
groups. It defines where the organisation work on collectivism approach or individualism.
Collectivism defines as group or society in which company is working. According to graph
shown, Vietnam has high percentage of individuals whereas, China has low. Therefore, the
Crown company needs to work differently in both the countries according to the society
differences. The HR manager needs to focus on both grouping society together as well as
individuals for effective functioning.
Masculinity: This culture focus on masculinity and femininity of the country which
shows that, whether organisation only work to ascertain profits or for the welfare of society.
Countries like United Kingdom works with masculinity as there is no more ration of women
employees as their main motto is to earn hight income. Whereas, China and UK works on same
level as these both countries similarly focus on earning profits and work for success of
companies (Beugelsdijk, and Welzel, 2018). Crown company could easily operate their
operation in China under this culture whereas, In Vietnam they needs to have approach of
collectivism.
Uncertainty avoidance: This index defines the potential of different countries to tackle
uncertainties in long run. Some countries could not perform in risk and frequent nagging
environment which leaders to losses for the company. Therefore, China has high uncertainty low
uncertainty avoidance as it could work on risk environment whereas Vietnam has high scores.
Crown needs to be prepare for taking taking in Vietnam by formulating strategies and pre-
determined goals to rescue with failures.

Long Term Orientation: This index shows the scale of organisation which works in
different countries. Companies work on short and long terms gaols which depends on their
potential and resources. Vietnam and UK both have long term orientation goal and organisation
look for market opportunities (De Stefano, Bagdadli, and Camuffo, 2018). But China have more
of potential due to having technology and low cost suppliers that opens ate for many new
players. Crown company needs to enable long term orientation in China to maintain its culture
by providing job opportunities and infrastructure.
Indulgence: This index shows how much a country is indulge or restraint. In which
indulgent people have less control and restraint have strong control on their desires and aims.
Vietnam has low rate of indulgence as the country does not hold strong culture as much as
China (Moonen, 2017). Therefore, Crown company needs to encourage the potential and keep
stick on the goals through which they would get success In both the countries.
From the above discussion, cross cultural differences needs to be followed by HR
manager of the company. There are many considerations needs to be undertaken prominently:
Recruitment and selection: HR manager needs to look at this crucial practice. While
working to offshore companies, the manager needs to hire right person for the right job role.
Identity the capable employees to work within the company is must which could be challenge
for the managers. As these could get affect with the cultural differences, language barriers and
organisation policies (Taras, 2017). For that instance, the manager of crown company needs to
make effective strategies and plans for recruitment.
Training: it is another vital practice which HR manager must perform. Providing
training and guidances require when organisation wants to work with different individual who
have indifferent capabilities. Therefore, manager of Crown must focus on giving relevant
training to the people of China, Vietnam and Ethiopia so that, it avoid confusion,e lack of poor
guidance and inefficiency.
Compensation and rewards: The HR manager of the company needs to ficus on giving
compensation and rewards It helps the employees to remain motivated and all these pays
showed be one equally basis also followed by employment laws of respective countries
( Hunter, and Figueiro, 2017). The laws must be ascertained by Crown company to keep
talented employees within the favour of organisation.

It has evaluated that, Crown company must consider these HR practices while working
on offshore countries so that, all the function and department will work in appropriate manner
and achieve targets in a less time.
CONCLUSION
From the above report, there are many issues and problems identified while moving for
expansion. The UK company who wants to grow their manufacturing concern must have
concern about cross cultural; considerations by identified many opportunities like cost benefits,
market growth and entrance in international market. Also, there are many risk identified such as
changing trends market preference and many more. HR manger needs to look on effective
recruitment, selection, training and compensation which helps to fulfil desired job position into
organisation.

REFERNCES:
Books and Journals:
Beugelsdijk, S. and Welzel, C., 2018. Dimensions and dynamics of national culture:
Synthesizing Hofstede with Inglehart. Journal of cross-cultural psychology, 49(10),
pp.1469-1505.
Conrad, B. and Kostka, G., 2017. Chinese investments in Europe's energy sector: Risks and
opportunities?.
De Stefano, F., Bagdadli, S. and Camuffo, A., 2018. The HR role in corporate social
responsibility and sustainability: A boundary‐shifting literature review. Human
Resource Management, 57(2), pp.549-566.
Hunter, C.M. and Figueiro, M.G., 2017. Measuring light at night and melatonin levels in shift
workers: a review of the literature. Biological research for nursing, 19(4), pp.365-374.
Legorburu, I., Johnson, K.R. and Kerr, S.A., 2018. Multi-use maritime platforms-North Sea oil
and offshore wind: Opportunity and risk. Ocean & Coastal Management, 160, pp.75-85.
Moonen, P., 2017. The impact of culture on the innovative strength of nations: A comprehensive
review of the theories of Hofstede, Schwartz, Boisot and Cameron and Quinn. Journal
of Organizational Change Management.
Taras, V., 2017. Cultural dimensions, Hofstede. The International Encyclopedia of Intercultural
Communication, pp.1-5.
Yu, J., 2017. After Brexit: risks and opportunities to EU–China relations. Global Policy, 8,
pp.109-114.
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