Organisational Culture and Strategic Human Resource Management

The provided document is an assignment that delves into the significance of organisational culture in shaping strategic human resource management (SHRM) practices. It references various books and journals, as well as an online article, to illustrate how cultural influences can impact SHRM decisions in multinational companies. The document aims to understand the interconnectedness of HRM practices, corporate sustainability, and organisational performance within a culturally sensitive framework.

People and Organisations
(Chinese company treats employees to holiday)

Nowadays, employees are considered as the prime assets of a company. Organisations
understand that their growth is directed connected to enterprise's success. There was a time when
most of the firms treat their workers as resources like money or machine. But after creation of
human resource department in many multinational corporation, issues relating to staff members
are solved on priority basis (Sparrow, Brewster and Chung, 2016). Recently a Chinese company
Tien Group took 2500 employees on a foreign trip to Spain. They spend around £5.5 million on
this whole vacation (Chinese company boss treats 2,500 employees to holiday in Spain. 2015).
This enterprise is known for their direct marketing of health care products. This biggest question
arises here is that why would a corporation pay such a huge amount on their employees. This is
not a part of their salary and it does not provide any extra facilities to their workers in at the
workplace. By evaluating organisational culture of this corporation and understanding power and
politics, tactics of founder of Tien Group can be analysed. Strategic human resource
management will also assist in identifying the reason behind this huge expenditure on the trip by
mentioned company.
Organisation culture is related to the value and behaviour of workers who are present in a
firm. This is one of the most important forces in a corporation which decides attitude of
employees and success of the enterprise. Tien group claims that they have 12 million direct
salespersons across the globe. Almost 10000 people are needed for managing these agents of
company. If staff members are satisfied and happy with their job then they can perform better
than the expectations of management. When workers give most of their time to enterprise and
assist them in earning around $1.5 billion USD then they deserve something extra than salary.
Tien group firmly believes in having an organisation’s culture where employees share each
other’s experience and knowledge with everyone so that all can attain benefit from their mistakes
and correct things which they have done at the time of selling a product or doing other job
(Reiche, Mendenhall and Stahl, 2016). This organisation involves their staff members in decision
making process and if their suggestions are good then they are considered by the senior manager
of enterprise.
This is the evidence of this claim ''trip to Spain''. This was not the first vacation of Tian
group as prior to this, they took 6500 employees on vacation to France. Experience of these
workers and expectations of new staff members generated the idea of mass trip. This
conglomerate understands that on direct marketing, agents do not get much chance to meet each
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other. This means that developing same value in all the employees and agents is a difficult task.
By taking thousands of workers ''together'' to a trip, relations among them can get improved.
Tian group wants to create an image of an organisation who cares about their personnel and by
spending £ 5.5 million, on vacation of the workers, they maintained their image in the market.
What this company did is not important as why they did the same is more significant.
organisational culture consists of a philosophy that employees must be treated in an appropriate
way regardless of their performance. This is the main reason that many companies, not only Tien
group, are spending a lot of money on making sure that their employees have fun and get some
new experience (Rees and Smith, 2017). This is an example of positive and productive culture
and it is mainly done for motivating workers to perform much better than present time. When
personnel feel that company thinks about them and management is spending millions of pounds
on their vacation or any other recreational activity then they also make a mindset that they have
to will try to push their limit and deliver surprising results in upcoming time. Employees
understand that company’s success will be beneficial for them as well.
Management of multinational organisation like Tian group knows that ''happy employees
means high customer satisfaction''. Showing workers that they are significant for company can
be considered as a part of prime objectives. An important element of organisational culture
ascertains the limit of commitment from the side of personnel. Above mentioned group believes
in giving a lot of freedom to their agents and employees of company (Albrecht and et. al., 2015).
They force them to generate new ideas and convince other people to become an important part of
this corporation. Instead of using normal techniques of direct marketing, they ask them to try
something new which firm has not taught them. But at the same time, Tien group has some
principles relating to organisational culture. They spread the value of ''working in and within the
existing organisational culture situation''. Bringing something new on the table would be
appreciated by the management of their corporation but if it is connected to philosophy of firm
then it would not be accepted in enterprise.
Prime reason behind success of Tien group is that they support the culture of deploying
authentic informal leader. Direct marketing is a different form of selling, the need of formal
managers is less in this form of business compared to other mode of sales (Dimba and Obonyo,
2015). It is mainly dependent on the number and talent of agents who are working for company.
The idea of foreign trip for staff members was not given by any senior manager of this firm; it
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was provided by someone who have sound informal connection with the employees. Tien group
expects their personnel to adjust their behaviour according to the business objectives of
company. This is beneficial for both the sides and a profit of 1.5 billion USD and low worker’s
turnover rate is a proof of this claim.
Politics and power that is present in an organisation make a huge impact on performance
of a company. It does not matter whether the size of enterprise is small of big, if there is a
positive type of power in the organisation then they productivity of employees will increase
(Marchington, 2015). Tien group focuses on positive power and they gave enough authority to
their worker to make crucial decisions by their own. Their advice is always taken at the time of
developing a new product or expanding the company in other nation. Taking 2500 employees on
vacation to Spain is a reward of strong performance. It is connected to the positive power in the
firm and employees get encouraged by these kind of steps. For every organisation, it is
importance to analyse the affect of negative power. This is concept where leader favour one
employees over other or treat all of his/her subordinates in a wrong way i.e. do not respect them.
Improving productivity of workers in this case is not possible and the result of this kind of power
is high employees turnover rate.
Negative power make an unfavourable impact on the quality delivered by personnels. Li
Jinyuan, founder of Tien group, adopted the strategy of direct marketing in the initial days of the
business operation of the company because he knew that managers may use their power in wrong
way and it will negatively impact the rapid growth of organisation. He developed the idea of
having agents across the globe so the product of company can reach to customer without
involving high number of middleman and reducing the troubles which generate administration
work (Stone and Deadrick, 2015). This company has 12 millions agents compared to hardly
10000 employees. Regular communication with staff members is adopted by Tien group in order
to check the impact and incidents of wrong use of power.
The trend is market is continuously changing and most of the multinational corporation
like to give a seat to a worker who is working at ground level. Foreign trip of 2500 employees
was also a joint decision, it was a form of giving power to worker in the name of reward. This
trip fulfil two purposes of the company, first it motivated personnel to deliver better outcomes
and did a huge promotion of the firm name. This organisation earned lot of free publicity
because many newspaper and social media websites posted this attracted news where a boss
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spend £ 5.5 million on vacation of 2.5 millions workers. Their are various kind of powers like
legitimate, reward power, coercive, expert & referent. First one is given by the organisation and
it follows vertical i.e. top to bottom. Second one, reward power is basically exchange of certain
behaviour by two entities. Tien group used these power for gaining high commitment from their
employees towards long term organisational goals. Third is coercive where senior get the power
to punish subordinate. It is based on fear but one cannot say that it is not legitimate. Expert
power is about the special talent or expertise which is present in an individual. Last one is
individual power, it is related to individual charisma.
The evidence of favour impact of positive power is continuously increasing revenue of
the enterprise (Guerci and et. al., 2015). The economic of China is slowing down but it is not
affecting growth of this Tien group because they are still focusing on positive power. This firm
has mission of proving quality healthcare products to their customer along with giving them the
opportunity make a career and gain the benefit of win-win situation. By sending large number of
employees to different foreign location on a trip is another way of increasing the number of
agents of the firm. Organisation politics is related to focusing on individual goals and, at the
same time, ignore objectives of the enterprise. One cannot deny that power and politics are
related to each other. In order to understand politics, there are four areas which are needed to be
cover. Formal or informal source of power and the place where political activity happens like
individual or organisational.
Jeffery Pfeffer gave tactics about organisational politics. He stated that this term is related
to acquiring and developing power so an individual can get preffer outcome. One of his tactic is
to take the advice on an expert by using formal and legitimate power. This will be a ration and
non controversial procedure of decision making and it can help an individual in gaining desired
result. Other tactics does not involve expert, it focuses on influencing the organisation by
organising Tien group meeting and spreading the agenda in it. This is easy and the element of
risk is not high in it. Coalition is another tactic given by Pfeffer. Individual communicate with
other manager in order to create good relationship with them and convincing them to support
owns point of view. Coaptation tactics focuses on building and then mobilising all the people
within or outside of the organisation who have particular organisational participants. Sometime
by meeting demand of two different sides, own benefits can be attained. Committee is a tactic
which is used when people have different views at the time of making a decision.
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Like of all organisation, Tien group also have cope up with the problems relating to
politics. At different stages of they have adopted various techniques for solving this issues. It is
not necessary that every time an enterprise or their senior manager play bad politics, sometime
politics is done for benefit of the company and its employees. In Tien group, the scope of
favouring one person over other is less because their most of their revenue comes from the direct
marketing. Doing personal promotion has a drawback i.e. a large number of customer cannot be
targeted in short interval of time. But by spending millions of pounds on foreign trip, this
organisation successfully did promotion of their brands organisational culture (Björkman and
Welch, 2015). They are present in many nation, if they would have adopting the strategy of
advertising their brand on T.V or newspaper then they could target more potential buyers, but
this trip helped firm in resolving two problems. First is motivation to employees and second is
huge publicity of company name and their unique sales techniques. This organisation should not
focus on right distribution of power so senior manager do not misuse their power and they trip
like ''Spain and France'' continuously happens.
Strategic human resources management is related to the main activities which is done by
the human resources division of a company like recruiting, deciding payroll etc. (Barrick and et.
al., 2015). Some other activities like having regular conversion with employees for increasing
their moral and increasing retention is also done under HRM practice. Most of the people argue
that there are no certain or long term sustaining theories of strategic HRM, this is true because
the work of this division is continuously changing and most of the unpopular theories of HRM
get outdated in short period of time. Strategic HRM is new concept and it is very different from
traditional one which is only consider as one of function of organisation. Workers are most
important resources of the enterprise, aligning them with strategic business goals can help a firm
in moving forwards towards their vision in an effective way.
This practice is used for increasing job satisfaction, productivity and motivation. All
these elements are crucial for overall good performance. This concept gained popularity
popularity because most of the big firms entered in new economies for expanding their business
(Kasemsap, 2015). They took advantage of globalisation and became an international company.
Business environment is also rapidly changing and radical up-gradation in technology forced
many successfully corporation to making an strategy which is involves significant role of human
resources division. Key objectives of strategic HRM is to find and follows the ways which can
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assist an organisation in earning competitive advantages over their competitors. Their are various
significant activities that are covered in strategic human resources management. First is hiring, if
an enterprise will recruit right people at right place in the company then they would not face the
issues of low retention rate and overall effectiveness of firm will also increase. Training is
another area of focus, if worker will get regular training then they can bring changes in their
working according to the organisation goals. Training is win-win for both, worker and company
also. 360 degree feedback is the another part of strategic HRM. Employees may face various
kind of problems, taking feedbacks from them can resolve most of the troubles at the point of its
generation.
SHRM has several pillar, first is argues that human is not just resources, they are most
important asset of company and they have ability to get some extra edge to an enterprise over
their competitors (Stone and et. al., 2015). Second states that if an organisation want to bring
major changes, then this work can only be done by workers i.e. human resources. Alternation can
be attained in effective way if a proper plan is executed in correct manner. Retention
management and rewards are one of the main area where strategic HRM concentrate. In Tien
group, the role of human resources division was crucial in managing arranging the vacation for
2500 employees. This was a rewards to many worker for their hard work and it motivates many
other to remove their shortcoming by joining training procedure and provide surprising results in
upcoming time. This company know that if they want to keep moving in right direction then they
have to spend huge sum in rewarding worker. This is assisting Tien group in increasing the
percentage of retention rate and providing quality experience to the workers.
Many young people in China want to work in this firm because they know that this
organisation care about development of employees. Rewards system is considered as one of the
best way to motivate personnels. The trip organised by mentioned group make sure that level of
job satisfaction in the employees enhances and they get fine experience in the company.
Normally when economy of a country goes down, companies operating in it face the problems of
maintaining same amount of revenue. But this organisation keep earning same revenue because
of their sound strategic HRM. If needs of employees get fulfil in right time then most of coping
up with changes is not a big issue. Tien group know that this strategy, foreign vacations, is going
to work for them and they should continue on its right execution (Gambardella, Panico and
Valentini, 2015). It is a best way of getting free promotion but most important things is that it
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motivate employees to attain organisational goals by support each and every worker of the
company.
At the end, it can be concluded that every firm have an organisation culture which
decides whether they are going to survive in market for short or long term. An enterprise should
not change their believes and philosophy because it make them different from other companies.
Organisational politics and policies can be bad or good.
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REFERENCES
Books and Journals
Albrecht, S. L. & et. al., (2015). Employee engagement, human resource management practices
and competitive advantage: An integrated approach. Journal of Organizational
Effectiveness: People and Performance. 2(1). 7-35.
Barrick, & et. al., (2015). Collective organizational engagement: Linking motivational
antecedents, strategic implementation, and firm performance. Academy of Management
Journal. 58(1). 111-135.
Björkman, I., & Welch, D. (2015). Framing the field of international human resource
management research. The International Journal of Human Resource
Management. 26(2). 136-150.
Dimba, B., & Obonyo, P. K. (2015). Influence of culture on strategic human resource
management (SHRM) practices in multinational companies (MNC) in Kenya: A critical
literature review.
Gambardella, A., Panico, C., & Valentini, G. (2015). Strategic incentives to human
capital. Strategic Management Journal. 36(1). 37-52.
Guerci, M., & et. al., (2015). The impact of human resource management practices and
corporate sustainability on organizational ethical climates: An employee
perspective. Journal of Business Ethics. 126(2). 325-342.
Kasemsap, K. (2015). Developing a framework of human resource management, organizational
learning, knowledge management capability, and organizational performance.
In Knowledge management for competitive advantage during economic crisis (pp. 164-
193). IGI Global.
Marchington, M. (2015). Human resource management (HRM): Too busy looking up to see
where it is going longer term?. Human Resource Management Review. 25(2). 176-187.
Rees, G., & Smith, P. (Eds.). (2017). Strategic human resource management: An international
perspective. Sage.
Reiche, B. S., Mendenhall, M. E., & Stahl, G. K. (Eds.). (2016). Readings and cases in
international human resource management. Taylor & Francis.
Sparrow, P., Brewster, C., & Chung, C. (2016). Globalizing human resource management.
Routledge.
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Stone, D. L., & Deadrick, D. L. (2015). Challenges and opportunities affecting the future of
human resource management. Human Resource Management Review. 25(2). 139-145.
Stone, D. L., & et. al., (2015). The influence of technology on the future of human resource
management. Human Resource Management Review. 25(2). 216-231.
Online
Chinese company boss treats 2,500 employees to holiday in Spain. 2015. [Online]. Available
through; <http://dalatahotelgroup.com/investors/reports-and-presentations/?date=2017>.
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