International HRM: Danone's Strategies and Cultural Considerations

This report provides a comprehensive analysis of Danone's international human resource management (IHRM) practices. It begins by outlining the complexities of entering a global market, including cultural barriers, political risks, exchange rate fluctuations, and foreign laws. The report then explores Danone's international business development strategies, with a focus on joint ventures, their benefits, limitations, and impact on human resources. Furthermore, the report delves into Hofstede's cultural dimensions model, analyzing the cultural context of Nepal and its implications for Danone's operations. It also addresses the issues of cultural shock faced by employees in international assignments and proposes solutions for effective IHRM. The report concludes with recommendations for Danone to navigate the challenges and opportunities of international expansion, ensuring successful IHRM practices.

Running Head: INTERNATIONAL HRM 1
International HRM Practice

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Table of Contents
Introduction.................................................................................................................................................2
Task 1..........................................................................................................................................................2
a. Complexities involved in entering a global market..........................................................................2
b. International business development strategies and its implications.................................................3
Task 2..........................................................................................................................................................5
Hofstede's model.....................................................................................................................................5
B Issues of cultural shock and solutions.................................................................................................6
Conclusion & Recommendations................................................................................................................7
References...................................................................................................................................................9

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Introduction
International Human Resource Management is one of the critical aspects of the multinational
companies. There are many functions performed by the HR in the company. It encompasses
systems and collective employment practice. It engages people and leads them towards a
common purpose. It also adopts such practices which make line managers and specialist
managers to manage workforce groups. International HR is concerned with the relationships of
internal and foreign environment. Danone is a French multinational food company based in
Paris. It conducts business operations in more than 130 countries and generates sale €21.9 billion
in 2016 (Danone.com, 2017). Most of the business operates in emerging countries. The total
revenue is generated from dairy products, water, and nutrition products.
The product portfolio includes dairy and nutrition products which serve at a national and
international level. The main brands are Activia, Actimel, Danimals and Yocrunch, waters. In
the past few years, company has adopted more aggressive business and development strategies.
In the emerging markets such as Asia, Israel, and other growing countries, the firm has adopted
different tactics such as joint venture to maintain steady expansion. The present report provides
detailed information about the international human resources practices and its complexities. It
also provides in-depth analysis issues related to cross culture environment and solutions to
overcome these problems.
Task 1
a. Complexities involved in entering a global market.
Expanding business at a global level is also a challenge for business organizations. There are
different types of challenges faced by a corporation while entering the global business
environment. However, it is also beneficial for the business enterprises. Danone is a food
Corporation Company, which produces and export packed food to several different countries
(Leitner, 2016). The firms mainly generate its business from dairy products, nutrition, and
pharma drugs. The company operates its business at an international level, especially in the
emerging Nepal and Malaysia. Following are the complexities involved in the global market:

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Cultural Barriers
If any business wants to expand its business in a foreign territory, first it needs to evaluate
culture and social habits of the customers. Culture has a huge impact on the business of
company. In different countries, people live their life and consume food according to their
culture. In addition, it is also essential to select an appropriate customer segment before entering
to the global market (HULT International Business School, 2017). In every market, local shops
are dominating because they are aware of local cultural aspects.
Political risk
The political risk in international business is instability and uncertainty. The political conditions
of emerging market are more likely to be unstable and offer more challenges to business. Issues
such as ill-defined policies, corrupt government, and restricted opportunities can pose difficulties
for Danone. In addition, a growing trend towards single economy makes business landscape
hostile. For example, in Nepal and Malaysia internet and social networking are allowed;
however, same is not allowed in other countries such as China. This political regulation can
negatively impact the business of Danone.
Exchange rate
Danone is French company so during expanding business in new global destinations firm need to
evaluate its financial performance. In the domestic market, the company has a specific idea
regarding budget and financial growth. On the other hand, in the international destination firm
need to evaluate expenses and cost of production. The economic conditions of Nepal are not
stable, which may lead the corporate to lose target customers effectively. It can adversely impact
on the human resource of the company. Monitoring international exchanges rate is a must for
Danone.
Foreign Laws and Regulations
The business laws and regulations are different at different places. In the global era, each country
establishes different types of laws for business which creates threats to a foreign company. It is
essential for the firm to evaluate the local laws of the country before entering the market
(Bloomfield, Brüggemann, Christensen, and Leuz, 2017). Danone is involved in the food

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industry; therefore, it has to evaluate the laws pertaining to the food industry. In the international
business, food safety standards become a major problem. Apart from that, trading laws and tax
implications also become a threat for Danone.
b. International business development strategies and its implications
While entering in the international business, there are many development strategies which can be
selected by the corporate organizations. In the present time, Danone conducts its business
operations in emerging counties like India, China, Israel and Turkey. The food company can
expand its business in developing countries like Nepal and Malaysia (Hwang, Zhao and Chin,
2017). Both of them are small but quite developed countries and culturally diversified. The best
strategy for expanding into international market is joint venture. It is a business agreement in
which two companies usually enter to achieve specific goals. The firm is already in various joint
ventures in different global destinations. Following are the benefits and limitations of joint
venture in Nepal and Malaysia.
Benefits
 It helps the company to capture a new market in the easiest form. By working in the joint
venture, Danone can understand and promote its products and services. Since, it is a
business agreement so the Food Company works independently and promotes its brand in
a better manner.
 Developing business in the joint venture will allow Danone to access resources such as
specialized staff and technology. Through strategy, the company attracts more investors
and working capital so as to maintain long-term success.
Limitations
 The joint venture creates a great imbalance between two parties with respect to assets,
expertise, and investment. Working in the joint venture creates miscommunication with
another firm, so Danone needs to clear each objective of business; otherwise it results in a
negative impact on a joint venture.
 Each company has different management and leadership style. In the joint venture,
culture can create an adverse impact on the workplace environment. Employees have

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different values and beliefs (Meyer and Xin, 2017). Working in another country’s culture
can result in conflicts and problems for current atmosphere.
Impact of Human Resources Management
In the joint venture, two businesses merge to work with each other. It helps both businesses to
expand their operations and add more customers effectively. In the joint venture, human resource
is highly affected. Each business firm has its own working culture and environment. Working in
the joint venture in any country like Nepal and Malaysia can result in cultural barriers and
conflicts for everyone. So, each corporation needs to involve deep planning and allocated
resources effectively. There are three dimensions of IHRM which are HR activities, types of
employees and countries (Trivikram, 2017). HR activities include procuring, utilizing and
allocating the human resources. In these activities, firm needs to make in-depth planning and
allocate resources effectively in a subsidiary company to maximize efficiencies and increase
productivity. The types of employees and countries include host country, domestic country, and
another country (the native country of employees). Working in the international business,
Danone needs to hire employees from the diverse culture. Here nationals of various countries
contribute their skills and efficiently for the growth of the organization. However, the business
also needs to provide healthy workplace environment so future conflicts can be avoided.
Task 2
Hofstede's model
Hofstede's cultural dimensions model is the framework which describes cross culture framework
communication. It helps to evaluate the impact of culture on values, behavior, and structure of an
organization or society. The cultural dimension is divided into six different parts. The USA is
considered as one of the best suitable countries (Frampton, Zafar, Bohara and Steinberg, 2016).
The political stability and workplace culture are highly diverse. Following is the cultural analysis
of Nepal:
Power distance

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It determines how subordinate respond to power and authority. In Nepal, power distance is high.
It means higher authority is not friendly with their suburbanites (Hofstede Insights, 2017). In
this country, order passes in hierarchy level and usually uses the autocratic management style.
Individualism
It shows individual perception and dependency on society. Nepal scores low under this segment.
It means that people are believed in long-term business relationship and loyalty. People in Nepal
are reliable and employees welcome to other countries in society (Rayamajhi, and Regmi, 2015).
Hiring and promotion decisions take account of the employee’s in-group and management is the
management of groups.
Masculinity
A high score in masculine on this dimension means society is driven by competition,
achievement and success. A low score means that society is driven by the dominant values and
quality of life. Nepal scores 40. It means people of society are concerned about the quality of
life, people value and equality. Conflicts are resolved by compromise and negotiation this culture
helps to Danone to establish long-term relationship in society and helps employees believe in the
quality of working.
Uncertainty Avoidance
This factor means how society deals with the unknown a fear of society. Nepal scores 40 in this
segment. It means that aggression and emotions are shown in society (Beugelsdijk, Kostova and
Roth, 2017). People accept new ideas, innovation and believe to try something new. So for
Danone, the business practice becomes easy and helps to expand its operations. People like to try
new and different things.
Long-term Orientation
This dimension deals how society maintains its relations with past and face the future challenge.
The society is divided into two parts i.e. normative and pragmatic approach. In the normative
society, people prefer to maintain old-time tradition and norms. On the other hand, pragmatic
society likes modern society. Currently, Nepal has no score in this category.

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Indulgence
One challenge of every society is socialization. It defines to the extent which one can control
over its desire and impulses. Nepal has no score in this segment (Beugelsdijk, Maseland and
Hoorn, 2015). It can be divided into two parts i.e. Indulgent or Restrained. The overall culture
framework of Nepal is positive. This county is small in size but the opportunities are vast. In
Nepal, there is another food company such as Nestle earning healthy revenue. The culture is
diverse and appropriate for making long-term business.
B Issues of cultural shock and solutions
The word culture shock refers to feelings of distress while exploring foreign culture. It is also the
personal disorientation a person may feel when experiencing an unfamiliar way of life due to
immigrations or visit to the new country. Danone is an international company that wants to
expand its business in other countries (Gunn, 2017). Nepal and Malaysia both are emerging
economy which can add more revenue. However, to start business certain issues always exist for
which firm need to make an effective evaluation. There are many issues which are related to
cultural shock some of them are given below:
 Due to cultural shock employee refuses to work with the company. Employees have
different perception about workplace environment. If the culture of the new place is not
healthy then employees turnover can increase which can lead more complexity in the
firm (Brown, 2016). Danone is a French company, so if the firm wants to hire employees
from different countries needs to maintain a healthy work environment.
 In the international business operation, HR has a critical role in the management of work
environment. Due to culture differences, firms cannot achieve its goals. The gap between
two cultures can make operations more complex. Business Corporation avoids making
communication that results misunderstanding.
Solutions
Effective international human resource management
In order to prevent the above problems, Danone needs to make effective international human
resource management. Firms need to make strategic alliances with different people and develop a

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cross-culture environment (Liu et al, 2017). Expatriate feels discomfort in a new environment
which can be avoided by conducting formal meetings with employees. It helps to establish open
communication with other people and employees can work as a team.
Appropriate recruitment
The selection of future expatriate is a crucial process. Most of the international company failed to
select an appropriate candidate for specific jobs (Sit, Mak, and Neill, 2017). Danone needs to
select candidate profile which fits perfectly for the international assignment. Employees profile
should be matched with cultural constraint and the host country.
Conclusion & Recommendations
As entering in the new marketplace, the main problems for the HR are culture and
communication gap. The market of Nepal and Malaysia is highly competitive and an emerging
market. The culture of these two countries is also very informal and provides open
communication. Value, beliefs, and preferences are different from each other which can lead
complexities to achieve goals. From the above report, Danone should introduce effective
international human resources management with its business environment. The firm needs to
provide inter-cultural cross training development to the new employees. Culture training,
language instruction, and assistance on the practical matters help to employees to make
communication and reduce culture gap with host countries. Interpersonal skills consider as
important skills for working in host countries. In addition, Danone can also give additional perks
and financial aids to individual to motivate them.

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References
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national culture stable over time? A cohort analysis. Global Strategy Journal, 5(3), pp.223-240.
Bloomfield, M.J., Brüggemann, U., Christensen, H.B. and Leuz, C., 2017. The Effect of
Regulatory Harmonization on Cross‐Border Labor Migration: Evidence from the Accounting
Profession. Journal of Accounting Research, 55(1), pp.35-78.
Brown, S., 2016. Effects of Intrapersonal Communication on Reverse Culture Shock.
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HOFSTEDE’S CULTURAL DIMENSIONS IN THE CZECH REPUBLIC, INDIA, NEPAL,
ROMANIA, SPAIN, AND THE USA. Business Studies Academy, p.2.
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HULT international Business School.(2017) 11 Biggest Challenges of International Business in
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Hwang, B.G., Zhao, X. and Chin, E.W.Y., 2017. International construction joint ventures
between Singapore and developing countries: Risk assessment and allocation preferences.
Engineering, Construction and Architectural Management, 24(2), pp.209-228.
Leitner, J. ed., 2016. State Capture, Political Risks and International Business: Cases from Black
Sea Region Countries. Taylor & Francis.
Liu, D., Gong, Y., Zhou, J. and Huang, J.C., 2017. Human resource systems, employee
creativity, and firm innovation: The moderating role of firm ownership. Academy of
Management Journal, 60(3), pp.1164-1188.

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Meyer, K.E. and Xin, K.R., 2017. Managing talent in emerging economy multinationals:
Integrating strategic management and human resource management. The International Journal of
Human Resource Management, pp.1-29.
Rayamajhi, K.B. and Regmi, M.P., 2015. Effect of individualistic and collectivistic values on
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