Impact of HR Strategies on Value Creation: A Case Study of Volkswagen

This document discusses the impact of HR strategies on value creation in Volkswagen. It explores the influence of regional and national culture on HRM practices, the organization's model of employment, and the levers used to create value. It also examines the differences in employment laws when international HRM changes local business systems. Additionally, it highlights the importance of local culture and HRM practices in transnational subsidiaries.

Human Resource
Management

Contents
INTRODUCTION...........................................................................................................................................3
MAIN BODY.................................................................................................................................................3
Value created by Volkswagen by using HR strategies.............................................................................3
The impact of regional and national culture on the practice of HRM......................................................4
Organization’s model of employment and organizational levers used to create value.............................5
Storey’s 27 points of difference between HRM and Personnel as a benchmark......................................6
Differences in terms of employment laws when international HRM changes local business systems.....7
Importance and significance of local culture and HRM practice in general and in
transnational/international-subsidiary......................................................................................................8
Corporate examples of firms using good HR practices and literature to justify your stand.........................9
Recommendations regarding HRM practices to ensure the organizational performance.........................9
CONCLUSION.............................................................................................................................................10
REFERENCES..........................................................................................................................................11

INTRODUCTION
Volkswagen is an automotive industry and the headquarters are in Wolfsburg, Germany.
The company has its presence in the Asian countries. The report discuss about the HR strategies
of the company adding values to it. The impact of regional and national cultures on the HRM
practices are discussed. Organizational models of employment are used and the levers that create
values to the company are discussed. The Storey’s 27 points of difference between HRM and
personnel management is used as a benchmark to state the practice done by the Asian country.
The importance of the local culture is discussed on the hiring and firing in the company. The
practices that are done by the HRM in general are discussed and the HRM practices that are done
in international subsidiaries re also discussed. The international HRM when make changes in the
local market the difference in the employment laws takes place that are discussed along with the
examples of the corporate firms that are practicing good HR practices. Recommendations are
given to the employers of the Volkswagen regarding the HRM practices to ensure the high
performance.
MAIN BODY
Value created by Volkswagen by using HR strategies
The values of Volkswagen are created by the HR of the company by implementing
strategies that work best for the company (Haipeter and Jo, 2021). The HR strategy includes: Understand the business
The HR of Volkswagen need to understand the market force and trends of the
Asian country to know the impacts on their business strategy. They need to keep the
priorities of the business before making the strategy.
 Define HR strategy
The HR of Volkswagen need to provide a map on how the strategy will be
directed in a unique way to manage the company’s human capital while managing the
business related challenges and the related objectives of the company (Dovbnya and
Pysmenna, 2017).
The HR strategies should be effective so it can add values to the organisation with the
workforce of the organisation. The strategies will provide the guidelines to retain the
talent while competing for the new talent for the organisation.
 Segment HR customers
The HR can identify the workforce and train them for certain programs as well as
services for the development. The HR can observe the issues and provide the workforce
with tools they require for the better performance.

 Prioritise HR investments
The HR can identify and put efforts in making strategies for the areas where the
priorities of the organisation can be put first. The life cycle of the employees can be
considered and strategies can be made on the basis of the analysis of the cost, benefits as
well as the risk in delivering the rewards to them. This can improve the efficiency of the
work of the employees.
 Ensure right HR service delivery model
The current strategies can be monitored and changes can be made according to
their effectiveness in the alignment to the objectives of the company (Pollard, Karimi
and Ficcaglia, 2017).
 Establishment of right HR capabilities
Skills and development training can be conducted to meet the need of the current
strategies if it lack in fulfilling the desired results for Volkswagen. The required support
can be given to the staff to work efficiently.
 Build HR brand
Communication with the employees for the development of the strategies in the
organisation and obtain feedbacks to change if there is any loop hole in the strategies
(Shetty, 2018). Measure impact of HR products and services
Linking the corporate strategies, HR priorities and the performance measurement
of the HR for the development of the organisation. Implementation of a HR scorecard
can help in measuring the impact, values and the costs by the strategies.
The impact of regional and national culture on the practice of HRM
Volkswagen is developing with a great speed in the Asian country and this leave option
but to adapt according to the cultural changes of the country (Wijewantha, 2019). The regional
and the national culture of Asian country have a great impact on the HRM practices of
Volkswagen such as: Recruiting
Countries follow different recruitment policies for hiring employees that depends
on the cultural attitude of the country. Asian countries may use different cultures like
Ethnocentrism, Polycentrism and Geo-centrism.
 Selection
Asian countries use extensive selection process and in most of the screening
process psychologist make the employees aware about the different culture, work and
the style of living.
 Training and development
Employees have to go through the training process and the HR manager of the
Volkswagen have to deal with the struggle in training the employees from the different
culture like that from the Asian country.
 Compensation policy
The compensation policy of Volkswagen have to consider the aspects of tax,
retirement plans, pension scheme and cost of living of the Asian employees. The HR

manager needs to make sure the employee get more compensation than they get from
their own country (Haque, 2017).
 Motivation
The HR of the Volkswagen have to motivate the employees for the effective
work. The motivation also differ with the country, the motivation needs of the
employees of the European Union are different from the employees of Asian countries.
 Leadership style
Different countries follow different leadership styles. Germany where the
Volkswagen is located follow centralised structure whereas the Asian countries follow
different structures, this makes it difficult for the HR to manage the practices.
 Performance appraisal
The performance appraisal depends upon who is going to appraise the employees.
There is a disadvantage of the appraisal in the home country due to the issue of
geographical distance which do not provide true reports of the performances and that can
cause the employees to be less satisfied with their job. This impact the overall
functioning of the organisation (Islami, Mulolli and Mustafa, 2018).
Organization’s model of employment and organizational levers used to create value.
The supported employment model is used by the Volkswagen. This a kind of service that
are provided by the co-workers, mentors, job coaches and business supervisor, where these
people help the company in integrated settings to gain the competitive employment. These
people keep maintain the employment for the organization.
The company provide with these member if any of the employee feel unsatisfied with the
work as well as the quality of life in spite of the position of the employee in the organization.
Employees share their views and preferences regarding the problem. The service provider help
the employee with coping up with any kind of issues. This maintains the satisfaction level of the
employees in the organization and help in the growth of the company (Al Zefeiti and Mohamad,
2017).
There are many programs that assist Volkswagen to choose their service provider with
the required skill sets for the organization. The programs provide the company with the level of
education and certification that might be required to be an employee specialist.
The specialist help the organization to find the right employees for the kind of jobs that
the organization provides.
The levers used by the Volkswagen to create the values are:
Strategic direction
The organization with an effective objective helps in the development. Clear objectives
of the company keeps the company productive for long term (Casalegno, Pellicelli and Civera,
2017).
Strategic communication

The company meet the value and objectives by measuring the progress made by the
company with the strategies. The company manager can communicate with the employees to get
an idea about the growth and the working of the company.
Strategic hiring
The company can hire the employees that have the potential and don not require
additional training and development sessions for their work. This reduces the staff turnover and
reduce the cost of the training and development (Zerfass and et.al, 2018).
Purposeful culture
The employees are able to see the objectives of the company by the culture of the
organization. The culture focuses on the key points that are required for the growth and
development of the company (Vaughn and Linder, 2018).
Storey’s 27 points of difference between HRM and Personnel as a benchmark
The Storey’s 27 points model by John Storey was based on four components: Belief,
strategic qualities, role of line managers and key levers. Volkswagen practice the HRM policies
in the Asian countries for the development as the four components are met that are:
Beliefs
The HRM of Volkswagen are the main factor of production in the company. The success
is a by-product of the commitment as well as the capabilities of the employees of the company
(Raval, Kant and Shankar, 2019). The employees of the company are thus treated as the assets
for the company rather than the resources for the production.
Strategies qualities
The HRM is all about the strategies and this makes it crucial for the managers and the
leader of the Volkswagen to give attention to the strategies for the company. Strategies can be
used as a competitive advantage in the market. The strategies are full of ideas, and different ideas
can be proposed for the changing business environment. Strategies can be made to develop the
skills of the employees and motivate them for better performance.
Role of line manger
The HRM ensures that the people management is prioritized. This makes the bond
between the employees and the line mangers strong that develops a trust within the employees
for Volkswagen and the managers. The line manager in the company ensures their roles in the
company every day that helps in the growth of the company (Rimi and et.al, 2017).
Key levers
The HRM consider the culture of the organization as an important part in comparison to
the procedures and the system of Volkswagen. The culture of the company avoid the conflicts
between the staff and the managers and increase the understanding that in turn increase the unity
in the organization. The culture is responsible for maintaining the values, beliefs, assumptions

and objectives of the company that will impact the production, growth and development of the
company.
Differences in terms of employment laws when international HRM changes local business
systems
There are many changes that come with the HRM practices when it is working
internationally with other countries. The main challenges that are faced by the managers is to
deal with the employment laws. The laws change with different countries and vary from the laws
that exist in the home country. If the laws are not understood properly then the laws can cost the
company much penalties and that can only create more problems for the company (Farndale and
et.al, 2017). The laws of employment at home country of Volkswagen may vary with the
employment laws of Asian countries like:
Civil rights laws
This law provides the employee with a protection against any kind of discrimination that
includes factors like the race, color, religion, sex and age. The laws can widely vary according to
the culture, values and social beliefs of the country. This can be very strict in some countries
while it will not be taken as serious in the other country. The seriousness and the effectiveness of
the laws can be different with the people views and behavior in the respective countries.
Workplace safety laws
This laws ensures that the employees of the company are safe where they are working.
The employers of the company have to ensure the safety of the employees that includes safety
from the kind of hazards such as extreme noise, unsanitary conditions, toxic chemicals and
mechanical dangers. The health and safety of the employees may be the utmost priority of some
countries and some countries might neglect the issues like that (Johnson, 2020).
Wage laws
There different types and condition relayed to the salaries of the employees. Many act
ensure the minimum salary an employee should get. Violating the rules of the employment salary
laws can make the organization to pay high penalties. The cost of the living of different countries
are different and there are different minimum salary rate.
Medical laws
The laws provide the employee to take sick leaves and take a break from the work. Some
laws also provide to take leaves when the family member of the employee is sick. The rules and
conditions can vary accordingly.
This types of changes in the employment laws in different countries can be tough for the
HR managers to deal with but the only solution is to look for the law changes with different
countries and have the knowledge of the culture and the behavior of the people regarding the
rules. The knowledge can help the HR in protecting the company from any legal issues.

Importance and significance of local culture and HRM practice in general and in
transnational/international-subsidiary.
The hiring and firing of the organization depends on the local culture. When the
complexity of the culture is understood the hiring of the new talent become easier. The local
culture affect the hiring as they know what to ask the and how to get full information by asking
certain questions. They understand what will motivate the people as well as how people will
perceive the work at their company. The local culture ensures that the new employee is fully
informed about the elements of the culture in the organization (Cheng and Hackett, 2021).
Terminating the employee is also decided by the local culture of the organization. The
organization know the needs of the organization and work according to objectives. When the
employees are untrained and are needing more training and development expenses hiring the
new ones, the company simply fire the employees and get the ones who will fit best for the
company.
HRM practices that needs to be undertaken
Selective hiring
This practice help Volkswagen to get the employees that are best fit for their roles in the
company’s culture. This will reduce the employee turnover an increase the productivity and the
growth of the company (Jørgensen and Becker, 2017).
Effective training
The employees of the organization need training to stay updated and providing them with
the useful and purposeful training is the duty of the organization to ensure the companies
productivity (Smith, 2017).
Performance management
The company’s objectives and the feedbacks from the selected employees gives the
measure of the performance of the management. The organization need to manage the
performance and observe the development by putting up creative strategies.
HRM practices needs to be taken in international subsidiary:
 The organization need to look up for the employees who are able to adapt the different
culture and understand the need of potential changes during the development of the
organization. Recruiting the right employees is the important part in international
subsidiaries (Van Mierlo, Bondarouk and Sanders, 2018).
 The knowledge of the laws and the culture of the international organization can help the
organization to protect itself from being in trouble with the lawsuits. Keeping up with
the labor laws, taxes plans and the international rules for trading for the particular
company can help the organization.
 The knowledge about the trends, preferences and behavior of the people at the
international organization can help the parent organization in keeping up with customer
demands.

 Being update with the technology and training the employees with that can help the
organization in managing international firms to great extends.
Corporate examples of firms using good HR practices and literature to justify your
stand.
Examples of corporate firms using HR practices are:
ADOBE
It is a multinational computer software company. The company is listed in the top 10
companies due to its best hiring practices. The company focuses in hiring the employees that best
suit for their firm. Time is invested in hiring and various interview panels are viewed before
hiring an employee. There are different rounds in the hiring process that includes multiple
technical rounds, aptitude tests and HR round (Stahl and et.al, 2020).
GOOGLE
It is the most popular search engine and is known for the innovative and technological front.
At google the HR practices involve the ways in which the relation between the employee and the
employer are made stronger. The practice at Google is called ‘People Operations’. The practice
includes the ways and the alternatives that can be used by the human resources to conduct things
better in google. The culture at Google promotes:
 Practicing good working environment
 The employees are given meaningful work to do
 The freedom of the employees is promoted.
ACCENTURE
It is a multinational professional service company. The company focus on the passion of
the employees working there. The company focus on the skills as well as their interest at a time.
The company aligns he objectives of the company with the skill and the interest of the
employees. The company collect feedback from their employees for the better management of
the talent which helps it in future (Guetzko, 2019).
Recommendations regarding HRM practices to ensure the organizational performance
Volkswagen need to understand the benefits of the strategic human resource
management. The strategic HRM will provide the company with: employees being satisfied with
their jobs, the work culture is improved, the customer are satisfied, and resources are managed
efficiently, helps in employee management and increase the productivity rate.
The success of the company is dependent on the strategic HRM and that can be achieved by HR
planning. The company can develop better by:
 The HR planning should be done according to the needs of the company, by
understanding the values, aims, mission and objectives of the company the plans and
strategies can be imposed in the company for high performance. The employers can

ensure clear communication with their employees to give them a view of how the
company wants to be directed.
 The HR can use their capabilities to understand the employee’s capability. The HR can
know how the employees of the company are working towards to meet the needs of the
company. They can ensure that the employee who is expert in certain department of the
company gets the chance to show their capabilities. The employees who are interested in
gaining the skill training are provided with appropriate training. This will help the
company gain high performances (Rana and Malik, 2017).
 The HR can calculate the future needs of the company by predicting the employees with
the skills to meet the need and by looking at the employees with skills who are currently
working in the company to meet the current needs and objectives with the strategic goals.
 By providing the tools to the employees to access the work with more efficiency that will
help the company to perform with higher efficiency.
 The HR needs to track the development made by the use of certain strategies that will
help the company to get a review on what they need to act and what needs to be improved
to get high performance.
CONCLUSION
It can be concluded from the report that Volkswagen can use the HR strategies like
understanding the business, define HR strategy and priorities HR investments can help create
values to the company. The regional and national culture can impact the HRM practices like
recruiting, selection, training and development process for the company. Supported employment
model can be used by the company and lever like strategic direction, strategic hiring and
purposeful culture can help the organization create the values. Storey’s 27 points model is used
to mention that Asian country use HRM for their companies. The international HRM when
change the local business system the civil right laws, workplace safety laws and wage laws are
altered. Local culture have a great role in influencing the hiring and firing process of the
company. General HR practices like selective hiring, performance training and effective training
need to be taken under by the company. The HRM practices like knowledge of laws and the
capability of the employees to adapt are need to be taken under for international subsidiaries.
Corporate examples of ADOBE, GOOGLE and ACCENTURE are given that are using good HR
practices. Important recommendations are given regarding the HR practices to ensure the
organizational performances.

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