Role of HRM Strategies and Culture in International Subsidiaries: A Case Study of Carrefour

This report explores the role of HRM strategies and culture in international subsidiaries, using Carrefour as a case study. It discusses the value creation through HRM strategies, impact of culture on HRM practices, employment model and levers used for creating value, personnel management vs HRM policies, significance of culture and HRM practices in international subsidiary, and changing international laws from international to local business.

Human Resource
Management
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TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
TASKS.............................................................................................................................................3
A. Value creation through HRM strategies.................................................................................3
B. Impact of culture on HRM practices.......................................................................................4
C. Employment model and levers used for creating value..........................................................5
D. Personnel management Vs HRM policies..............................................................................6
E. Significance of culture and HRM practices in international subsidiary..................................7
F. Changing international laws from international to local business...........................................8
G. Effective HRM practices within literature..............................................................................9
H. Recommendations...................................................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11
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INTRODUCTION
Human resource management refers to the management practice which emphasises on
development, retention and selection of necessary work force for completing the organisational
goals (Delery and Roumpi, 2017). Technologies and changing perspectives has made it possible
for the organisations to operate globally in the changing business dynamics. For dealing with the
diverse business environment it is necessary that companies must develop a work force which is
capable to meet the gaps between local and international business environment. The cultural
differences between various countries demands for suitable planning of HRM strategies so that
organisation can build a work force capable of understanding the diversity in consumer
behaviour and business environment.
In this report Carrefour is selected as case study organisation which is a France based retail
corporation. This European Union based organisation has successfully delivered its services in
European culture or countries. However, it has also made a remarkable performance in China,
largest Asian country. Organisation has been successfully in mitigating the cultural differences
between Europe and Asia. The report will investigate the role of human resource strategies for
creating values and gaining success. It will also analyse the role played by culture within human
resource management (HRM) practices. Further the study will discuss employment model and
best strategies for improving HRM outcomes.
TASKS
A. Value creation through HRM strategies
HRM plays a vital role in providing competitive positioning to the organisation. An
organisation cannot gain success without support from the talented workforce. Thus company is
able to attract and retain talented employees only due to qualitative recruitment and other HR
policies. The HRM strategies such as motivation, flexibility, compensation and rewards and
training programs are helpful in exploring the full potential and talent of the recruited employees
(Greer, 2021). An innovative team makes it possible for the organisation to identify the business
needs and to apply appropriate solutions for it. This is possible only when HR department
ensures that organisation has all necessary tangible as well as intangible resources for
accomplishing business goals.
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The lack of corporate and professional culture can lead to failure of operations and
companies may not succeed in international market, particularly when entering through
partnership, joint ventures or other strategic options. It is the responsibility of the HR department
to develop both hard and soft skills in staff members so that a productive work culture can be
developed. Development of such efficient work culture is key to gain success in foreign market.
The customer portfolio of every retailer is very diverse and thus if Carrefour does not have HR
policies which encourages diversity and equality then organisation may fail to even meet the
expectations and needs of customers.
Thus it can be said that the value creation in terms of productivity, brand perception,
customer and employee retention and competitive advantage is possible only because of
effectiveness of HRM policies and practices (Bailey and et.al., 2018). For retailers like Carrefour
brand perception and value is developed mainly by the way in which staff members
communicate with the customers. Thus for such organisations it becomes more important to
build a HR team which can provide a satisfactory response to customers. Brand value is
enhanced by only means of efficient HR policy so that not only employees but also the working
environment and policies can be improved to deliver desired value.
B. Impact of culture on HRM practices
The HRM policies of Carrefour are greatly influenced by the national and regional culture
of Indonesia. Indonesian culture gives more preference to balance between personal and
professional life (Country comparison, 2021). They used to have more empathy and formal
communication. The same is also reflected within work culture of Carrefour. Organisation
incorporates a highly professional code of conduct and communication hierarchy which meets
the regional culture of the Indonesia. However, the policies such as leave management and
grievance resolution also includes the glimpse of National Indonesian culture which gives value
to productivity and professionalism.
The HR policies seek to be flexible yet in alignment with the national work policies. For
instance, the Carrefour is bound to follow all national regulations related to occupational safety,
wages and work culture. Along with the communication aspect the regional culture of Indonesia
also has impact upon resourcing and talent management strategies. For instance, some regions of
Indonesia used to have more openness and flexibility than the others. For such areas organisation
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used to follow advanced and interactive recruitment and training methods. The culture also plays
key role in communication method, compensation and organisation of resources.
Indonesia is also considered as multicultural archipelagic nation in which different regions
are characterised by different religious beliefs or languages. Thus while incorporating HRM
policies Carrefour ensures that its workplace ethics does not violates or hurt the emotional or
religious sentiments of its diverse workforce or its diverse consumer profile. While formulating
and implementing training programs also Carrefour ensure that its employees are trained in such
a way that it gave them best understanding as well as they are prepared to provide best services
to different customers with diverse needs (Boon and et.al., 2018). It is not possible for the
organisation to frame HR policies without taking national or regional culture into consideration
because it can cause conflicts among teams and staff members may consider Carrefour as foreign
company. For encouraging good emotional bond with the organisation it is necessary that
Carrefour must incorporate values of Indonesian culture along with its core business values.
C. Employment model and levers used for creating value
The employment model used by Carrefour is very interactive and value creator. In the
adopted model organisation gives first priority to attraction and retention of talented candidates.
Organisation has graduates programs partnership with universities and apprenticeships so that it
can strengthen its talent management. Organization has multi skilled development programs so
that its training policy can help in professional development of employees. To make process
more productive organisation also gives high priority to internal promotions. In order to create
higher values, it is required that Carrefour is able to understand the diversity in its operations
when moving from European to Asian culture. Thus considering the globalisation and technical
advancement Carrefour also promotes diversity in its employment model.
One of the most impressive and powerful aspect of Carrefour employment model is that it
ensures that executive board member of company is from different background with diversity in
country, skill, language, age as well as work experience (Act for people Growing and moving
forward together, 2021). Carrefour is also abiding to make its employment model highly
productive and an example towards its corporate social responsibility goals. In this directive the
retailer also has specific policies to overcome any kind of gender bias or violence against women
or disable. The disabled people are also given equal opportunity to grow and work with the
company. Organisation is giving good investment on its training programs and performance
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based internal promotions so that individuals are always inspired to work hard for achieving their
goals. Carrefour employment model also involves futuristic aspect and thus company regularly
find ways to make its HRM practices advanced by using digital technology and green
sustainability concept. Organisation also appreciate the suggestions provided by its employees
(Guest, 2017). It makes the employability culture of Carrefour highly innovative and flexible.
The staff members always find way to connect themselves as team and part of the growth
journey of company by means of effective recruitment and employee retention policies.
D. Personnel management Vs HRM policies
Personnel management (PM) prioritise management of administrative and personnel
systems while HRM has strategic approach to forecast the needs of organisation. Storey’s 27
difference points forms a good foundation for the organisation to choose the best one for the
firms. The first difference is in terms of contract. HRM strategies are not restricted to only
contract while PM has clear and careful set of written contracts. Carrefour as international brand
in Asia so it emphasis more on PM while conducting its routine operations (Barrena-Martinez
and et.al., 2018). However, for behavioural aspect organisation give preference to HRM aspect
which states behaviour to be based on mission instead of following PM which focus on
customised behaviour. In PM organisation used to focus on labour management.
However, to build trust of customers in Indonesia Carrefour adopts HRM approach of
building relations with customers. The initiatives adopted by organisation are also integrated
instead of piecemeal so that it can make better decisions. In this aspect also thus company
follows HRM. The HRM aspect demand for direct communication. However as per cultural
preferences of Indonesian culture organisation adopted indirect communication which forms the
part of PM. Also to establish Carrefour as international brand organisation has adopted greater
standardisation as observed in its marketing, operational as well as resourcing strategy (Zaid,
Jaaron and Bon, 2018). This in context of standardisation also firm has adopted high
standardisation which is characteristic of PM because in HR approach standardisation is quite
low.
For greater success within Asia company does not adopt the conflict handling by reaching
temporary truces as in PM. Instead for resolving conflicts Carrefour try to manage the conflicts
on the basis of culture and climate of operating environment. The pay scale chosen by firm in
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Asia is based on performance basis which indicates that it has adopted HRM approach contrary
to the fix grade pay in PM.
E. Significance of culture and HRM practices in international subsidiary
Within international subsidiaries it becomes mandatory for the organisations to consider
the cultural aspect within HRM operations. There has been great difference between European
and Indonesian culture. Thus Carrefour must consider these differences for better HR outcomes.
As compare to Europe, Indonesia has greater diversity in terms of language and religious beliefs.
Thus in recruitment procedures such as in job description and interview organisation must ensure
that they do lead to any discrimination or any miscommunication which can hurt a particular
individual or community. Similarly, Indonesian community used to favour indirect
communication while the European working culture prefers more direct communication. It
makes firing process different in both the countries (Armstrong and Taylor, 2020). In Indonesia
the recruiters are expected to avoid negative feedback. Thus if organisation does not accept this
cultural part of Indonesia then talented employees will not prefer to work with Carrefour. It can
itself became one of the reason for the failure of organisation in international boundaries.
Internationally the perspective of equality and preferences may vary. Like in Indonesia
family values and personal wellbeing is given more priority while in Europe professional
preferences are appreciated more. Similarly, despite diversity Indonesian culture has more
inequality and gap between power and non- power holders. Thus if HR policies like internal
promotions and compensations methods are formulated on the basis of these differences. If
company will not consider these differences, then there is strong possibility that Indonesian
community may not accept Carrefour and its practices. It will not only influence staff retention
but can also cause significant decline in customers (Nieves and Quintana, 2018). The ignorance
to culture at international level is also one of the key reason to create miscommunication and
conflicts between managers and employees. If employees do not find reflection of their personal
or national value in the organisation, then they never show full commitment and dedication. Thus
instead of locally accepted brand Carrefour will always remain a foreign and alien brand within
Indonesia so people will never provide their support and preference to brand and company may
not enjoy its international success.
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F. Changing international laws from international to local business
The culture becomes an integral part when executing HRM practices. The same is also
reflected in terms of employment legislations. Indonesia is rapidly developing country with rapid
pace of industrialisation (Madera and et.al., 2017). Though country is now also considered as
developed country similar to Europe but still Carrefour may observe considerable differences in
terms of legislation at both local and international level. Locally in European regions Carrefour
have to follow the minimum wages and occupational safety regulations to ensure the wellbeing
of its staff members. Though similar laws are also implemented in Indonesia but they have
different dimension. For instance, the per capita income and average living cost vary greatly
between Indonesia and Europe. It leads in variation in minimum wages or expenditure criteria of
the firm (Papa and et.al., 2018). International firms are also required to have employment
contract which ensures that their operations follow international trade agreements without any
violations.
The work safety and policy regulations and discrimination criteria are also different
internationally. Both cultures have different criteria for communication and work practices. Thus
it is evitable that there will be variation in code of conduct policies as well. The regulations
related to employee termination and recruitment may involves additional formalities and clauses
for the foreign organisations so as to ensure that any citizen or company is not exploited by the
other organisation or no harm is caused to the national integrity by the firm’s operations. In
situations such as conflict resolution which require judicial involvement may also face different
employment regulations (Stewart and Brown, 2019). For international organisations the legal
involvement can also require a more challenging and complex framework due to involvement of
international trade agreement.
The labour and employment laws vary as per the operating culture of firm. For instance,
the way of communication and procedures related to recruitment and termination are very
different in local and international countries. Thus even a simple change in communication
preference or approach can cause violation of labour laws. Further with the foreign companies
there can also be difference in payroll strategies which can be regulated by global exchange of
currencies or funds.
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G. Effective HRM practices within literature
According to Brewster, Mayrhofer and Farndale, (2018) contemporary organisations gives
more emphasis on attracting and retaining talent. Talented work force is able to achieve
organisational goals with greater efficiency. Organisations such as Marks & Spencer and Tesco
are known for their good customer services which is possible only due to highly trained staff
members. These global leaders also have unique employment models and training programs for
meeting the expectations of employees and to prepare them for meeting professional challenges.
In the same context Kianto, Sáenz and Aramburu, (2017) also stated that good HRM practices
not only focus on professional development but also on personal development and satisfaction.
Carrefour as well multinational brands like Tesco used to have clear and impressive policies
related to grievance management, leave policies and work culture policies. The contemporary
retailers are also incorporating sustainable HRM practices so that companies can improve CSR
goals of the organisation. As per the view of Bratton and Gold, (2017) the adoption of
technology based payroll and HRM systems is contributing significantly to companies to have
sustainable resource management. Almost every organisation including Carrefour, Zara,
Unilever or Tesco have their own customised HR management software so that organisation is
able to meet the human resourcing needs of company in effective manner.
H. Recommendations
For productive and quality management of human resources it is recommended that
Carrefour must make its recruitment procedures more transparent and updated. Retail industry is
facing fierce competition all over the world. Thus to withstand the competition it is necessary
that company has highly innovative and talented employees. Thus instead of recruiting only local
candidates from Indonesia company must also open up its recruitment for international talent.
The diverse work force will be able to provide more holistic services to local people as well as
tourists who visit Indonesia. For this purpose, Carrefour must also enhance its presence on social
media or networking platforms so that exposure can be provided to talent across the world. It is
also recommended that for enhancing the customer services staff members of retail stores must
be highly good in various employability skills such as communication, technology and problem
solving (Banfield, Kay and Royles, 2018).
Thus organisation must also focus on highly innovative and updated training and induction
programs. The ineffective and out dated training programs does not give an opportunity to
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employees to fully explore their innovative ideas and talent. It is also one of the reason for poor
employee retention. For long run it is suggested that company must focus on protecting its talent
from competitors by employee loyalty. This can be achieved by regular motivation from the
leaders and management as well as advanced training programs. It has been also observed that
most of the HR departments does not consider employee conflicts as the major issue (Noe and
et.al., 2017). It is recommended that companies must also have clear grievance and conflict
management policies so that teams are able to easily resolve the cultural or diversity issues. It is
the responsibility of the HR department to implement work culture and policies which make
every employee feel valuable.
CONCLUSION
It can be concluded from the above discussions that culture is an integral part of the
organisational practices and human resources must be developed regularly. The organisations are
able to gain competitive benefit and success largely because of their productive and efficient
work force. Without retention of talented employee’s organisations will not be able to
accomplish the business objectives and operations. It has been also analysed from the study that
when moving from regional to international levels companies are required to consider diversity
and cultural element in HRM policies with more emphasis.
For ensuring the long term success it is required that organisations must review their HRM
practices and must make necessary improvements in it as per advanced market trends. It can be
concluded that if HRM policies are not effective enough then employees are hard to motivate for
delivery of productive outcomes. It has been also evaluated that internationally operating
organisations particularly those operating in diverse culture also need to meet the varying
legislative requirements related to HRM policies. For continuous improvement in productivity
HRM practices must also be reviewed and associated changes must be made to gain competitive
benefits.
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REFERENCES
Books and Journals
Armstrong, M. and Taylor, S., 2020. Armstrong's handbook of human resource management
practice.
Bailey, C. and et.al., 2018. Strategic human resource management. Oxford University Press.
Banfield, P., Kay, R. and Royles, D., 2018. Introduction to human resource management.
Oxford University Press.
Barrena-Martinez, J. and et.al., 2018. Drivers and barriers in socially responsible human resource
management. Sustainability, 10(5), p.1532.
Boon, C. and et.al., 2018. Integrating strategic human capital and strategic human resource
management. The International Journal of Human Resource Management, 29(1),
pp.34-67.
Bratton, J. and Gold, J., 2017. Human resource management: theory and practice. Palgrave.
Brewster, C., Mayrhofer, W. and Farndale, E. eds., 2018. Handbook of research on comparative
human resource management. Edward Elgar Publishing.
Delery, J.E. and Roumpi, D., 2017. Strategic human resource management, human capital and
competitive advantage: is the field going in circles?. Human Resource Management
Journal. 27(1). pp.1-21.
Greer, C.R., 2021. Strategic human resource management. Pearson Custom Publishing.
Guest, D.E., 2017. Human resource management and employee well‐being: Towards a new
analytic framework. Human resource management journal, 27(1), pp.22-38.
Kianto, A., Sáenz, J. and Aramburu, N., 2017. Knowledge-based human resource management
practices, intellectual capital and innovation. Journal of Business Research, 81,
pp.11-20.
Madera, J.M. and et.al., 2017. Strategic human resources management research in hospitality and
tourism: A review of current literature and suggestions for the future. International
journal of contemporary hospitality management.
Nieves, J. and Quintana, A., 2018. Human resource practices and innovation in the hotel
industry: The mediating role of human capital. Tourism and Hospitality
Research, 18(1), pp.72-83.
Noe, R.A. and et.al., 2017. Human resource management: Gaining a competitive advantage.
New York, NY: McGraw-Hill Education.
Papa, A. and et.al., 2018. Improving innovation performance through knowledge acquisition: the
moderating role of employee retention and human resource management
practices. Journal of Knowledge Management.
Stewart, G.L. and Brown, K.G., 2019. Human resource management. John Wiley & Sons.
Zaid, A.A., Jaaron, A.A. and Bon, A.T., 2018. The impact of green human resource management
and green supply chain management practices on sustainable performance: An
empirical study. Journal of cleaner production, 204, pp.965-979.
Online
Act for people Growing and moving forward together, 2021
<https://www.carrefour.com/sites/default/files/2020-08/Act%20for%20people%20-
%20gorwing%20and%20moving%20forward%20together.pdf >
Country comparison, 2021. [Online]. Accessed through <
https://www.hofstede-insights.com/country-comparison/indonesia,the-uk/ >
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