Vodafone's Human Resource Management: A Comparative Essay

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ASSIGNMENT 1 – INDIVIDUAL ESSAY

Table of Contents
INTRODUCTION............................................................................................................................. 2
BODY.............................................................................................................................................. 3
CONCLUSION............................................................................................................................... 10
REFERENCES.................................................................................................................................11
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INTRODUCTION
Vodafone is one of the largest telecommunication companies that provide a range of services
to both enterprise customers as well as consumers. It offers mobile, Fixed as well as TV to
consumers customers. The mobile services are used by 500 million customers around the
world. Vodafone is present in various locations including the Middle East, Europe, Asia Pacific
and Africa through joint ventures, subsidiary undertakings, associated undertakings as well as
investments (Vodafone, 2019). This essay is focused on understanding the differences in
managing the human resources within Vodafone at the domestic and international
environment. This essay takes into consideration the Hofstede cultural dimensions as it is one
of the important factors that affect HR managers.
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BODY
Human resource management is a concept that includes the processes to manage the people of
any organization like Vodafone in structured as well as thorough manner with the aim to
achieve the set goals of targets pre-decided by the management of Vodafone. The activities of
human resource management include the hiring and retention of the people, negotiation of pay
packages as well as perks settings, change management, performance management and also
take care during the exit to the people from the company (Farndale et al., 2014). As the
business operations of organization such as Vodafone have been internationalised, the role of
human resource management has also been expanded to the international level.
The main activities of HR management are directed towards the achievement of better
performance of goals of a company like Vodafone regardless of its operations in the domestic
market or operations in international countries (Latukha, 2015). Since the HR management is
implemented in different settings at the domestic and international level, there occurs
difference human resource management between domestic and international settings.
Domestic HR is defined as the processes to manage the human resources in local country while
international HRM is defined as set of activities that are aimed to manage the organizational
human resources at international level within various countries in order to achieve
organisational goal as well as achieve competitive advantage over the competitors at
international and national level (Gomes et al., 2015).
It is observed from the definition that there is no difference between the activities or functions
of HRM as both the HRMs carry out similar activities for example recruitment, selection, career
management performance appraisal, rewards and compensation and so on (Mohamed et al.,
2013). The only difference that lies in the location in which the HRM functions and activities
that are being performed as it brings various factors such as political, legal, economic and
business systems, as well as various issues such as cultural differences, institutional difference,
the difference in time zones or geographical dispersion.
As Vodafone is located in various markets such as Canada, United States, Iceland, Peru,
Argentina, UK, Ireland, Spain, France, Denmark, Italy, Hungary, Sweden, Romania, Ukraine,
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Greece, Nigeria, Egypt, Austria, Finland, Russia, Australia, New Zealand, India, Tanzania, Latvia,
Estonia, Lithuania, Serbia, Denmark, Congo, Angola, South Africa, Kenya, UAE, South Korea,
Ghana and Tunisia and various others, it is essential for them to effectively manage the human
resources at different geographical locations considering different factors and issues (Vodafone,
2019).
Another key difference lies in the involvement of a group of employees as international HRM
deals with three categories of nation or country (Shah et al., 2012). The three main categories
are parent country where the company is located that is Vodafone is headquartered in London,
England; host country where the subsidiary of the company is located, and other countries from
where finance, labour, raw material and research and development is sourced by the company
such as Vodafone.
The three types of employees in international organization are Parent country nationals are the
employees of the organization who are the citizen of the country where the company
headquarter is located, host country nationals are those country citizens where the subsidiary
of the company is located or local citizens are recruited by the organization in its subsidiary
company (Edwards et al., 2016). The third country nationals are those that are other countries’
citizens, which mean they are neither the country’s citizen where company headquarter is
located nor the country’s citizens where the subsidiary is located.
The other difference includes the health and security risks, the role of the state, the number of
risks involved as these are more extensively involved in international HRM as compared to
domestic HRM. The explicitness of HRM between international and domestic environment
occurs due to the requirement of operating in different countries as well as the necessity of
employment for the citizen of home state or foreign countries’ citizen (Lertxundi and Landeta,
2012). It is essential for the organization such as Vodafone to consider the type of foreign
countries where it focuses on expanding their business. The HR management of any
organization is affected by the differences in the political order, economic, legal and business
system.
The whole world is regarded as the source for supplying required resources for operations,
undertake business activities around the world, apply a strategy for global business and surpass
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the external business borders for the company that require operating globally (Mellahi et al.,
2013). In the below-given diagram, some of the most significant factors influence the hiring and
paying individuals for different nationalities, business operations complexity in different
countries, the difference in management activities in the domestic and international
environment.
Figure 1 Factors that affect the difference between HRM in the domestic and international
environment
Source: Shah et al., 2012
There is variance in the nature and stability of political systems between countries. There are
various countries in the USA and Europe where the relative political system is stable and legal
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HRM in
domestic and
international
enviornment
Cultural
enviornment
Senior
management's
attitude
Measure reliance of
multinational
companies on
domestic market
Primarily
involvement of
multiinational
company in industry
Resemblance of
undertaking business
in different nations
and employing
different ethnic
group of individuals

system is well-established despite the change in the prime ministers, senators, presidents,
governors, premiers and representatives, while there are many other countries where the
political and legal system are turbulent (Vaara et al., 2012). In some countries, the military
coups overthrow the governments while some countries are ruled by despots and dictators
who utilise their power requiring international organizations to purchase goods as well as
services from the host country entities controlled and owned by rulers or their families. Also,
there is variance in character and stability of the legal system as sometimes business contracts
become unenforceable due to internal factors of politics.
It is required by the international organizations like Vodafone to decide strategically as to when
certain laws and regulations must comply and when these are ignored due to operational or
political reasons (Edwards et al., 2016). There is also a difference in the HR regulations and lows
in character and detail. Of e example in various countries in Western Europe, it is difficult to
reduce the number of labours due to laws on labour unions and employment since required
payment to former employees may be very high.
There is also a difference in the degrees of equal employment legislation. The laws of some
countries must address the issues like employment discrimination as well as sexual harassment
while in other countries employment discrimination is an acceptable practice due to religious or
ethical differences (Edwards et al., 2016). This reveals that the HR professionals of Vodafone
must crucially conduct a widespread review political environment and laws related to
employment along with the role plus nature of labour unions for successfully operating in
countries other than the home country.
Additionally, there is a difference in the economic system in different countries. Some countries
still operate with modified communism version such as China, which has fundamentally failed.
In case of attempting a mixed model by the government, the government enterprises are
bloated with excessive worker count in order to reduce unemployment and layoffs (Mohamed
et al., 2013). Some less-developed countries are open to foreign investment so as to generate
jobs for their growing populations. These countries offer cheaper labours for a global
organization as compared to Japan, Western Europe and the US.
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Significant profit earned by organizations like Vodafone in developing countries such as China
and India is determined by the fluctuations in currency and restrictions on the transfer of
earnings. Political instability may lead to seizure of assets of foreign organization. The countries
that have weak economies are not able to maintain and upgrade the infrastructural elements
such as schools, electric power, roads and telecommunications (Gomes et al., 2015). Lack of
proper infrastructure makes it difficult for organizations to operate in a foreign environment.
The major economic consideration for global corporations is the cost of living.
Another most important concern that affects international HR management is cultural forces.
Culture is comprised of societal factors influencing beliefs, values and activities of a distinct
group of individuals. There are significant cultural differences between nations and countries
(Mohamed et al., 2013). It is essential for HR managers to consider the conflicts caused by
religions or ethnicity. It may be difficult for organizations like Vodafone to unite people with the
different ethical or tribal background. The ethical difference may occur due to the culture in
different countries.
Geert Hofstede developed a cultural dimension model that includes five dimensions which is
one of the widely used methods to classify and also compare cultures (Dartey-Baah, 2013).
Power distance is the dimension that refers to the inequality among individuals of a nation. For
example, the countries such as the US, the Netherlands and Germany have low power distance
which means less inequality as compared to the countries such as Russia, China, Indonesia and
France. The increase in power distances relates to increased differences in status and authority
between subordinates and superiors. The HR activities are affected in these dimensions is by
the difference in the reactions to management authorities among different cultures.
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Figure 2 Hofstede cultural dimension model
Source: Dartey-Baah, 2013
Individualism is another dimension that refers to the extent of preference of individuals in
acting individual rather than in members of groups. Here it was identified that the people in
Asian countries tend to be more collectivistic or group-oriented that those individuals in the US
who prefer individualism (Vaiman and Brewster, 2015). The HR activities may be affected as it
leads to more collective action and fewer individuals competition in those countries that
emphasize collectivism.
Masculinity or femininity is another cultural dimension that refers to the extent of prevalence
between masculine and feminine values. Performance orientation, competitiveness,
assertiveness and success are masculine values while close personal relationships, quality of life
and caring are included in feminine values (Hauff et al., 2015). For example, Japan has a high
masculine score as compared to the Netherlands that has a high feminine score. This dimension
may affect the allotment of women expatriates to managerial jobs in various countries for
example despite the 90 per cent of top companies in Britain there are only 43 women working
at other senior roles.
Uncertainty avoidance is the cultural dimension that refers to the individual’s preference in a
country for structured instead of unstructured situations. Structured situations are those that
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have well-established rules and clear guidelines on what is expected from the people to act
(Vaiman and Brewster, 2015). The countries such as France, Russia and Japan have a high score
in this dimension making them resistant to change and be more rigid. On the contrary, the
individuals in countries such as the US, Hong Kong and Indonesia have low scores which make
them tend to be more flexible and more business energy.
The HR management is highly impacted by this factor as it anticipates the reaction of the
people towards the changes introduced in organizations like Vodafone in different countries.
People in more flexible culture tend to be more challenging leading to entrepreneurship and
risk-taking as compared to the rigid countries (Vaiman and Brewster, 2015).
Long-term orientation is the last dimension introduced by Hofstede that refers to the values
held by people that emphasize the futures rather the short-term value that focuses on present
and past. Thrift and persistence are included in long-term values while respecting traditions and
fulfilling social obligations are included in short-term values (Thite et al., 2012). The score of
people in China and Hong Kong is high on long-term orientation while the people in countries
such as the US, France and Russia scored high on short-term orientation.
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CONCLUSION
Thus the HR management at the international level is far more complex than in the domestic
environment. It is essential for the international HRM to identify and resolve issues that may
arise due to the difference in the business environment, cultural differences, legal norms and
procedures, variety of policies different in customers and traditions and economic and political
factors. Since the company such as Vodafone tends to expand in the international market, the
role of international HRM becomes more crucial and growing. Hence the international HR
management of an organization such as Vodafone is required to deal with more external
factors than the domestic HR management.
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REFERENCES
1. Dartey-Baah, K., 2013. The cultural approach to the management of the international
human resource: An analysis of Hofstede's cultural dimensions. International Journal of
Business Administration, 4(2), p.39.
2. Edwards, T., Sanchez-Mangas, R., Jalette, P., Lavelle, J. and Minbaeva, D., 2016. Global
standardization or national differentiation of HRM practices in multinational companies?
A comparison of multinationals in five countries. Journal of International Business
Studies, 47(8), pp.997-1021.
3. Farndale, E., Brewster, C. and Poutsma, E., 2014. Coordinated vs. liberal market HRM:
the impact of institutionalization on multinational firms. In International human
resource management (pp. 20-39). Routledge.
4. Gomes, E., Sahadev, S., Glaister, A.J. and Demirbag, M., 2015. A comparison of
international HRM practices by Indian and European MNEs: evidence from Africa. The
International Journal of Human Resource Management, 26(21), pp.2676-2700.
5. Hauff, S., Richter, N.F. and Tressin, T., 2015. Situational job characteristics and job
satisfaction: The moderating role of national culture. International business review,
24(4), pp.710-723.
6. Latukha, M., 2015. Talent management in Russian companies: domestic challenges and
international experience. The International Journal of Human Resource Management,
26(8), pp.1051-1075.
7. Lertxundi, A. and Landeta, J., 2012. The dilemma facing multinational enterprises:
Transfer or adaptation of their human resource management systems. The International
Journal of Human Resource Management, 23(9), pp.1788-1807.
8. Mellahi, K., Demirbag, M., Collings, D.G., Tatoglu, E. and Hughes, M., 2013. Similarly
different: a comparison of HRM practices in MNE subsidiaries and local firms in Turkey.
The International Journal of Human Resource Management, 24(12), pp.2339-2368.
9. Mohamed, A.F., Singh, S., Irani, Z. and Darwish, T.K., 2013. An analysis of recruitment,
training and retention practices in domestic and multinational enterprises in the country
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