Impact of HR Strategies on Value Creation in Volkswagen

This report explores how HR strategies create value in Volkswagen and analyzes the impact of culture on HRM practices. It also examines the employment models and organizational levers used by the company. Additionally, it evaluates the differences in employment laws when international HRM changes local business systems.

INDIVIDUAL REPORT

Table of Contents
INTRODUCTION.......................................................................................................................................3
A) Examine how value was created by firm using HR strategies. Use concept of strategic HRM....3
B) Analyze impact of regional and national culture on practice of HRM in chosen country............4
C) Use appropriate organization’s model of employment and state organizational levers used by
firm to create value..................................................................................................................................5
D) Using Storey’s 27 points of difference between HRM and personal management as benchmark,
state practice by firm in Asian country....................................................................................................6
E) When it comes to hiring and firing do you consider importance and significance of local culture
and HRM practice need to undertake in general and practice need to carry out HRM in transnational/
international-subsidiary...........................................................................................................................7
F) Examine differences in terms of employment laws when international HRM changes local
business system.......................................................................................................................................8
G) Corporate examples of firms using good HR practice and literature to justify stand...................9
H) Recommendations regarding HRM practices to ensure organizational performance is high.....10
CONCLUSION.........................................................................................................................................11
REFERENCES..........................................................................................................................................12

INTRODUCTION
Human resource management refers to the practice of managing people that helps in
attaining better performance. It is the process of recruiting, selecting, inducting employees,
training and development, apprising performance of employees, deciding compensation,
encouraging employees, maintaining poor relations with employees etc. This report is based on a
multinational company from European Union or European countries that also have their presence
in Asian/ African market (Stewart and Brown, 2019). To complete this project Volkswagen is to
be undertaken that is a largest multinational car manufacturing company in Germany who works
under the European Union. This company also deals in Asian Market that helps in gaining huge
customer base along with high profitable results. To complete this report several aspects are to be
included that helps in reflecting recommendations at the end of the project. It reflects a HR
strategy that is used by company to create value. Therefore, it also includes the impact of
regional and national culture on practice of HRM within Volkswagen. In this employment model
is also explains that helps in creating values. In this model based on Storey’s 27 points that helps
in differentiate between HRM and personal management within Asian country. It also reflects
importance of local culture and HRM practice within transactional and international subsidiary.
At last it represents corporate examples of the firms that use good HRM practice and provide
recommendations that help in gaining profitable results to the firm.
A) Examine how value was created by firm using HR strategies. Use concept of strategic
HRM
Strategic HRM is an essential approach which reflects plan that leads to execute several
HRM functional areas. Strategic HRM defines to a HR that coordinates and consistent overall
business objectives in order to enhance overall organizational performance (Armstrong and
Taylor, 2020). In terms of Volkswagen, human resource manager adopts the use of several HR
strategies so that goals and objectives of business enterprise are attained on time. These
strategies are also useful to create the value within working environment that are demonstrated
below:
 Selective Hiring- It is one of the best human resource strategies which is used by an
business enterprise for developing the value of company in marketplace. In terms of

Volkswagen Company, human resource manager focus on hiring talented and skilled
candidate for a specified job profile that creates values to the firm by fulfilling the
demand of particular job role. Placing right candidate on right position helps in
gaining competitive advantage within marketplace. For instance- If Volkswagen.
Wants to hire a sales representative for this they need a person who have good
communication and listening skills (Banfield, Kay and Royles, 2018). To hire that
person company create value within marketplace by attracting number of customers
and profits.
 Fair and performance based compensation- It is another best strategy of HRM in
which an organization can evaluate the performance of workers and provide rewards
according to that. This will create long term value within business firm. In terms of
Volkswagen. Human resource manager focus on evaluating employee’s performance
timely and getting rewarded for their good work. This helps in satisfying employees
for a longer period of time (Chelladurai and Kerwin, 2018). Due to get high rewards
they effectively attend and attract customers so that they will retain for a longer
period of time. It directly develops the organizational performance.
 Offering security to employees- It is a crucial form of HR strategy within an
enterprise. Employment security is one of the major parts that help in retaining
existing employees and attracting talented one. This strategy is creating value of firm
in the eyes of employees and market (Berman and et.al., 2019). In terms of
Volkswagen. Human resource manager provides insurance facilities, accommodation
facilities that live out of their home country to work in the company. These types of
security helps in creating value of entity in employees eyes so that they present their
potential to high extent that indirectly creates value of Volkswagenin competitive
marketplace.
B) Analyze impact of regional and national culture on practice of HRM in chosen
country
National culture refers to the norms, behaviors, belief, customs and values etc. that are shared
by population of sovereign nations. It reflects as particular characteristics such as religion, racial,
language, traditions and many more. Regional culture refers to that culture that is link with the

resident of the regions. Both these culture impact the practice of HRM in Volkswagen within
Asian countries.
 While doing the business on global level Volkswagen need to understand the culture,
language, values, behaviors of the countries so that they will enjoy the successful results
in international market (Macke and Genari, 2019). For instance- human resource manager
of Volkswagen indulge in several types of practices such as recruiting, training, hiring,
evaluating employees performance. In regional culture the company cannot hire an
expert to recruit applicant because they understand the regional level language, values
etc. Therefore the impact of regional culture is much affected the company overall cost
because in this organization does not need any professional or experts to understand the
language, values etc.
 On the other hand when the company needs to hire and recruit candidate on national
level that is within Asian countries and other countries then human resource manager hire
a professional so that issues related to language barrier is to be resolved. In this
Volkswagen need to implement the smart practices such as smart hiring while doing
business in Asian Countries. In this company need to focus on Asian values that reflects
provide same respect to every employee and encourage by offering monetary values. For
this company need to invest extra cost which affects financial resources of business.
Hence, it is reflected that impact of national culture on practice of HR is major because it is
wide in nature as compare to regional level.
C) Use appropriate organization’s model of employment and state organizational levers
used by firm to create value
There are various organization model of employment that an organization is used to create
the value and gaining competitive advantage within business marketplace. In terms of
Volkswagen, manager focuses on several models of employment that are presented below:
 Competitive employment- It is one of the best organization model of employment that
states that competitive employment is part time and full time work within business
enterprise that pays at above the minimum wage along with several benefits that their co-
workers enjoys (Morgeson, Brannick and Levine, 2019). In terms of Volkswagen, human
resource manager focus on hiring competitive employment within their business that will

create value by completing the task on time and in effective manner. This model of
employment is very crucial at global level. In this Volkswagen hires a best candidate and
prepares a team to complete a specific task on high wages along with several benefits. In
this only experts and professionals are to be included and no one needs other supports for
completing their activities. It will create value within marketplace because workers
perform their task effectively and efficiently. Employment model within an organization
provides employment opportunities and job training to targets clients. In terms of
Volkswagen human resource managers adopts the use of employment model without any
discrimination but focusing on the abilities and talents. This will maximize company
value in international marketplace.
There are several organizational levers which are used by Volkswagen to create a value within
competitive marketplace. Some organizational levers are presented below:
 Strategic direction- To build an organization effectively it is very essential to understand
the purpose of company. In terms of Volkswagen, it is most crucial for top authority to
present the values and purpose of business enterprise in front of their employees so that
effectiveness would be maintained (Zaid, Jaaron and Bon, 2018). In this they effectively
designing the long term goals so that employees are indulge in attaining targets
prominently. It will create value for company in the eyes of employees, clients and
competitors.
 Applied metrics- Information is very crucial for success of business firm. In this
businesses use metrics to track the effectiveness of all elements of Volkswagen by
finding the ways to monitor this. For instance- Volkswagen marketing manager focus on
tracking the growth by examine the customer visit on global level within growth
analytics. According to this they set their campaigns so that large base of customers are
attracted and retained for a longer period time (Järlström, Saru and Vanhala, 2018). This
will create value of the company in a proficient manner.

D) Using Storey’s 27 points of difference between HRM and personal management as
benchmark, state practice by firm in Asian country
In terms of Volkswagen manager adopts the use of Storey’s 27 points difference within
Asian Country where the company also have an existence. These 27 points of difference between
HRM and personal management are demonstrated below:
Basis Personal management HRM
Beliefs and assumptions Contracts
 Rules
 Managerial task
Personal management of
Volkswagen focuses on
carefully delineation of
written contracts.
In this they display to devising
the clear rules to their
subordinates so that objectives
are attained on time.
The major task of personal
management according to this
model is to monitoring the
task effectively.
Human resource management
of Volkswagen enterprise
beliefs to go beyond contract.
The manager focus on can do
outlook with rules and
policies.
The major task of human
resource management is to
nurturing the employees so
that they are satisfied with
their working and provide
proficient results to company
sustainability.
Strategic aspects Key relations
 Speed of decision
The major strategic aspect of
personal management is to
managing the labor of
company so that profitable
results are enjoyed in
international market.
The speed of decision is slow.
The major strategic aspects are
to satisfy the customers so that
Volkswagen will gain
competitive advantage in
marketplace.
The speed of decisions is fast.
Line management Communication
In personal management
communication would be done
As human resource
management of Volkswagen is

 Management role
in indirect manner.
The management role of
personal management in
Volkswagen adopting the
Transactional role of
management to managing the
employees.
focusing on direct
communication.
The management role of
Human resource management
in Volkswagen is focus on
using transformational
management role. In this they
encourage their employees for
accepting change.
E) When it comes to hiring and firing do you consider importance and significance of
local culture and HRM practice need to undertake in general and practice need to
carry out HRM in transnational/ international-subsidiary
Importance of local culture and HRM practice at the time of hiring and firing employees in
general:
 At the time of hiring a candidate within an organization company need to focus on smart
hiring practice that helps in attracting and selecting the best candidate for the specific job
role. Due to this, organization gets profitable results and gaining competitive advantage
within marketplace. The culture of the company is friendly and effective that helps in
hiring the candidates and attaining business objectives on specified period of time.
 At the time of firing an candidate HRM practice and local culture play a significant role
because by using HRM practice manager evaluate the performance of employees due to
this they examine the talent of candidate (Fei and Aun, 2019). If the skills and knowledge
are not suitable for particular job role or it will create conflicts within employees then
manager can fire the employees. In this HRM practice play a crucial role.
It demonstrates practices that are needed to HR while doing transnational/international
subsidiary. In context of Volkswagen, human resource manager adopts several practices which
are useful on international level that presented below:
 Adopting encouraging culture- As Volkswagen is working on global level and due to
this they adopts the HR practice based on employee’s security. Securities of employee’s

are very crucial and effective while working as international/transnational subsidiary
(Hee and Jing, 2018). This culture helps in developing profits of business enterprise.
 Maintains transparency- It is another practice which is used by HR of an organization.
In this they maintain transparency with the stakeholders who presents in different
countries by using communication polices strategies and plans. Timely communication
with employees on international level helps employees to raise the issues which need
solutions.
F) Examine differences in terms of employment laws when international HRM changes
local business system
International HRM addresses wider range of activities as these are coordinating with foreign
currencies, exchange rates, international relocation etc. In International HRM company manager
need major requirements to involving in personal life of employees. In terms of Volkswagen
manager changes their working criteria as they are working on international level. While doing
business on international level HRM focus on dealing with several external factors that creates
differences within employment laws. These external factors include staffing practices in foreign
locations, codes of conduct etc. For Instance- If a Volkswagen that is a multinational
organization is focused on sanctioned license by Asian country like China to set the subsidiary
within China at this time Volkswagen need to work under the China government regulations to
offers employment to the local people. While doing business in European country the company
needs to focus on following their government policies.
 To work under the Asian Country, China government officially implemented the national
emissions trading system by end of 2017 that will impact the energy generation sector of
an organization. Due to this law a expansion plan would be developed by Volkswagen
and it also changes their local business system in which they focus on their production by
implementing the products which does not harm the environment for this firm need to
take permission of EU so that flexibility in fulfilling emission targets are to be fulfilled.
To work under the EU, Volkswagen need to follow “The Real Driving emissions
regulation” for their passenger cars. It reflects as one of the major European regulation
which was followed by an organization (Chaudhary, 2019).
 Not all countries have a minimum wage at place. In this manager of Volkswagen does not
implement minimum wage act as an employment law while working on international

level so that talented workforce are attracted towards company that it will create
profitable results to company sustainability in global market.
 While working on international level HRM changes their local business system by
implementing employment contracts law that set the obligations for employers and
employees so that workers understand their working effectively and efficiently. It is very
useful for working on international level.
In terms of global level companies need to highly focus on complying international
employment laws along with local employment laws. If organization fail to follow employment
laws than they will face major issues and it will also impact the Volkswagen reputation.
G) Corporate examples of firms using good HR practice and literature to justify stand
 From the viewpoint of “(Zaim and et.al., 2018)”it is to be justified that in Metro AG,
human resource department adopts the best HRM practices like providing proper
training to employees on global level as per the skills and task requirements. It helps
in gaining profitable results within marketplace. As Metro AG, is working on global
level so it is very essential to provide proper training session to the candidates who
are new within the company or existing employees who needs this. Training and
development sessions help in satisfy employees at working place. Manager of a
company also focus on values and culture of every country in which they operate
their business that helps employees satisfied and encourages them for attaining
profitable results.
 From the viewpoint of “(Sulaiman, Ahmed and Shabbir, 2020)” It is reflected that
Volkswagen adopts the best HR practice that is provide information easily to the
employees who are working that helps in understanding the task and activities which
they do for gaining profitable results within marketplace. This HR practice helps in
gaining competitive advantage along with satisfying employees that encourage
company long term survival.

H) Recommendations regarding HRM practices to ensure organizational performance is
high
From the above analysis it is to be recommended that company like Volkswagen highly focus
on their HRM Practices for ensuring that the organizational performance is high. To justify this
terms several recommendations are demonstrating below:
 Provide training in relevant skills- It is a best HRM Practice which is recommended to
the organization for developing their performance. According to this practice company
highly invest on training and its related budget. After recruiting new candidate it is very
essential to employer to provide training related to working so that organization
performance is enhanced. In this Volkswagen, HR manager focus on using digitalization
because it helps employees to learn the things effectively that maximize their overall
performance. This will indirectly increases the profitability of business enterprise.
 Motivation and encouragement- It is another best HR practice which is to be
recommended for developing organization performance (Chand and Markova, 2019). In
this manager of Volkswagen focus on motivating employees by using monetary and non-
monetary factors so that they perform their best and enterprise will gain high profitable
results in their long term survival.
 Developing flat and egalitarian organization- It is crucial HR Practice that is suggested
for Volkswagen as the company is also working in Asian market. This practice is highly
useful for working in Asian market as it develops the overall performance of business
firm. In this manager provides equal respect to all the people who are working within the
enterprise. This will developed positivity. Hence, it promotes sharing of ideas that
reflects the high organization performance.
CONCLUSION
From the above report it is to be concluded that human resource management is a
significant term within a business enterprise. This is an essential function that occurs within
every organization as it helps in gaining profitable results to business enterprise. It inculcates
recruitment, selection, appraisal, training and development that encourage and satisfy customers
on global level. This individual report is based on multinational company that focuses on
maintaining HRM practices and personal management as a benchmark. In this project several

significant of HRM practices and local culture reflected that helps a business enterprise to gain
high level of success in international market. In this laws related to employees are also very
useful at the time when HRM changes local business system. Due to employment laws workers
are satisfied within working premise. At last it demonstrates the several recommendations so that
performance of organization is to be placed on high level.

REFERENCES
Books and Journal
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practice.
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processes, and problems. CQ Press.
Chand, M. and Markova, G., 2019. The European Union's aging population: Challenges for
human resource management. Thunderbird International Business Review, 61(3), pp.519-
529.
Chaudhary, R., 2019. Effects of green human resource management: testing a moderated
mediation model. International Journal of Productivity and Performance Management.
Chelladurai, P. and Kerwin, S., 2018. Human resource management in sport and recreation.
Human Kinetics.
Fei, T.L.K. and Aun, L.K., 2019. The Impact of Human Resource Management Bundles on
Innovation in Malaysia. Journal of Applied Economics & Business Research. 9(1).
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Järlström, M., Saru, E. and Vanhala, S., 2018. Sustainable human resource management with
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management. Journal of cleaner production. 208.pp.806-815.
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research, and applications for human resource management. Sage Publications.
Stewart, G.L. and Brown, K.G., 2019. Human resource management. John Wiley & Sons.
Sulaiman, M.A.B.A., Ahmed, M.N. and Shabbir, M.S., 2020. COVID-19 Challenges and Human
Resource Management in Organized Retail Operations/Desafios del Covid-19 y la
administracion de recursos humanos en operaciones minoristas organizadas. Utopia y
Praxis Latinoamericana. 25(SI 12). pp.81-93.

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.
Zaim, H. and et.al., 2018. The effects of knowledge management processes on human resource
management: Mediating role of knowledge utilization. Journal of Science and
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