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International HRM

Bas Blom

Peter Woudberg 

International HRM

Minor International law

 

NHL Hogeschool

HBO Recht

Version 1

Date: 29 January 2016

Docent: Mrs.Visser

Names:

Bas Blom

Peter Woudberg

Study year: 2015-2016

 HBO-R 4 (VOS15)

Introduction  

Enterprise Rent-A-Car is a car rental company headquartered in Clayton, Missouri, United States in Greater St. Louis. In addition to car rental, Enterprise also oversees commercial fleet management, used car sales, and commercial truck rental operations.  Enterprise Rent-A-Car was established in St. Louis, Missouri in 1957 by Jack C. Taylor. Originally known as "Executive Leasing Company," in 1969, Taylor renamed the company "Enterprise" after the aircraft carrier USS Enterprise, on which he served during World War II. Enterprise Rent-A-Car is the largest rental car company in the United States, and has more than 5,400 “home city” locations, and 419 airport locations .

Enterprise rent-a-car set up eight core values :

1. Our brand is the most valuable thing we own; this means that Enterprise wants to keep its great reputation and also expects its employees to protect this reputation;

2. Personal honesty and integrity are the foundation of our success. The company focuses on loyal employees, long-term relationships with customers and employees, by listening to them and earning their trust;

3. Costumer service is our way of life; this means that Enterprise wants to exceed on customer service and lay the focus on here. As told in the introduction, ‘take care of the customers and the employees first, and the profits will follow';

4. Great things happen when we listen.. to our customers and to each other. This means that everyone in the company has a voice and the customer's opinion is highly valued, because that is their chance to create new opportunities;

5. Enterprise is a fun and friendly place, where teamwork rules. This means that everyone in the company works hard to meet the goals for growth and success.

6. We work hard, and we reward hard working. Learning how to run a successful business from the ground up and delivering a high standard of service is hard work. It's work that demands a deep personal commitment from each employee. Enterprise rewards that commitment personally, professionally, and financially by providing employees with many different career opportunities.

7. We strengthen our communities: one neighborhood at the time. The company started at a neighborhood. That is why they can thank them for their success;

8. Our doors are open. Everyone can be themselves and they respect each other's differences that make them unique. These eight values can be found on the website of Enterprise. It becomes clear that the company has a very clear perspective on which values they find important and what they are looking for in a new employee. They see these eight values as their compass that leads them to success.

A high level of customer service is what makes Enterprise unique; this is why the company is growing. The company ensures to employ people with great knowledges, so they can keep their great position.

Table of contents

Inhoud

International HRM 0

Introduction 2

Table of contents 3

Chapter 1: Organizational strategy and structure. 4

Decentralized 4

Transnational vs International 4

Hierarchy 4

Flat or Matrix 4

Advice 5

Chapter 2: International HRM 6

2.1 Strategies 6

2.2 The preference of Enterprise 6

2.3 Right choice? 6

Chapter 3: Culture 7

3.1 Culture 7

3.4 Advice 8

4.1 Recruitment 9

4.2 Management Development 10

4.3 Learning and Development 10

4.4 Performance Management & Reward 10

4.5 Link with cultural preferences 10

Literature list 11

Chapter 1: Organizational strategy and structure.

Decentralized

Car Enterprises is mostly decentralized. The company wishes to have a different approach on the market they are working on. This means that the local managers have freedom to have their own strategy and to do as they seem fit for that particular market.

The needs of a particular market differ a lot from each other, if we look at the locations where Car Enterprises operate there is a lot of difference in what people want. For example Car Enterprises started to rent Harley Davidson motorbikes in the area of Las Vegas because many tourists want to experience the road on a different way.

Transnational vs International

These two terms are considered pretty loose terms because they both have the same aspects. Car enterprises offers a lot of freedom to the managers in the different locations. The definition of Transnational company means that the company distributes all of the marketing sales, decision making etc. to the different markets.

Car Enterprises doesn't change their logo or products in the different countries so that gives them some international aspects. But they do decentralize a lot of the power such as the decision making and marketing so that gives them some transnational aspects.

Car Enterprises wants to be recognizable around the world but still wants to give their unique touch to the market they are active on.

Hierarchy

Car Enterprises wants to keep their personnel motivated and want to create a positive atmosphere on the work floor. To achieve this goal the managers are trained to build good relations with their personnel and to find out about their needs and goals. Personnel at Car Enterprises are stimulated to bring innovative ideas which may aid the company. According to Herzberg theory employees wants to feel valued because, according to him, the real motivation comes from within. Car Enterprises recognizes this and they developed the “vote system”.

This system works by giving all the employees the ability to vote on another employee for their performance. They have to evaluate their own performance and the performance of their colleagues regarding customer service.  They do not simply vote but they have to wright constructive feedback about their performance and others performance. The names of the best employees will be displayed to all the colleagues. This says a lot about the hierarchy in Car Enterprises. They really want the employees to feel valued and to have control over their own career.

Flat or Matrix

Studying the structure of Car Enterprises shows us that they have a matrix structure. When they hire new employees they generally start as management trainees. They then become management assistant and then have the possibility to further grow to the position of assistant manager and so on.  Each branch has got his own manager and every area has got an area manager .

Because they are widespread throughout America it is important to keep organizational structure clear and simple. With so many branches it is nearly impossible to keep a clear organization with a flat structure because this would mean that there is not enough control to carry out the company vision.

Advice

When studying Car Enterprises it becomes clear they are running an well-oiled machine that has a big percentage of the car rental market. They have a clear organization that has been well structured and the strategy for hiring new recruits is solid.

We think that the structure that are running is the right one(matrix) because a flat structure would help the company respond well to the local needs. It would also make the structure unclear, if all the branches would start doing things independently the company would lose their course and make things very unstable.

If we look at the organization regarding hiring new employees I think there are some things they are overlooking at the moment. Their thought is to give new employees as much chances to grow further within the company. They are letting new recruits start as management trainee, although I think it is great to directly involve employees with the business results is do think it is not in every employee to become an manager or an assistant manager.

I think wasting time and money on training employees that do not have the capacity to become an manager is a bad thing for a company because that money could be better invested elsewhere within the company. I think they should make their selection process more strict by only selecting persons who meet specified qualifications. They want to offer new employees without any diplomas a chance to have a career but I sincerely believe this noble strategy is far from cost efficient because you will need the right people on the right places to help them further grow to their full capacity.

Nonetheless Car Enterprises is present in many countries and with the Enterprise holding generating 16.1 billion dollar in revenue in 2013 there is not much else to say about their way of managing the company, the results speak for themselves.

Chapter 2: International HRM

2.1 Strategies

‘MNC' stands for multinational company . Companies can choose for different strategy's. MNC's can choose for the strategies best practice, best fit or comparative HRM. Below, we explain the differences between these strategies.

Best practice  

Best practice means that the company chooses to apply the best practice the company is familiar with. They choose the practice that appears to promise high returns in performance, regardless of the location of the subsidiary. Best practice is a strategy method of work or activity that has proven itself as more effective than other methods. The thought is that with proper working, this method can carry out a project with fewer problems, less unforeseen complications and better results. When a MNC chooses for best practice, it is important to be familiar with the industry, in order to apply this in their own way of working.

Best fit

When a company chooses for best fit, this means that the multinational maintains a national flavor and has a strong contextual interface.

Comparative HRM

Comparative HRM is a systematic method of investigation that seeks to explain the patterns and variations encountered in cross-national HRM rather than simply describe HRM institutions and practices in different societies. When a company chooses for comparative HRM, this means that the company chooses for systematic research all over the world.  

2.2 The preference of Enterprise

We think that Enterprise has chosen for the method best practice. Enterprise is the same in any location, regardless of where the company is located. Same as the Jumbo in the Netherlands.

Enterprise trains and develops their own staff and expects its employees' full attention by the effective training, because they want every location to have the same strategy. As an employee of Enterprise, you can grow within the company. As the method best practice suggests, all subsidiaries are the same as the main company of Enterprise: every setting has the same structure as any other location of Enterprise rent-a-car.

2.3 Right choice?

The best HRM strategy for Enterprise is ‘best practice'. We think that the method ‘best practice' fits best, because everyone can have a good career by Enterprise.

We agree with Enterprise that they have chosen for the best practice approach. Enterprise's employees are very involved in the activities from the organization, because of the career fairs and the courses given by the firm. Everyone will have the opportunity to develop himself within the company. You get the best results with this method, because every subsidiary is the same. We think that it is very important to involve employees in the activities, because the organization is carried by employees. Together, they can make the organization grow stronger. And all the employees are motivated because they can work hard to work up into a better function.

Chapter 3: Culture

3.1 Culture

Before we talk about cultural differences, we would like to explain the term culture. Culture is the characteristics and knowledge of a particular group of people, defined by everything from language, religion, cuisine, social habits, music and arts . In our socialization process we learn to think, feel and act from our environment. Geert Hofstede calls these patterns the ‘mental programs'.

Of course, members of the same culture do not always react the same. Knowing the cultural background of a person will help you understand reactions in some situations.  

3.2 Cultural differences in the United States and The Netherlands

In this paragraph, we will compare different aspects of culture in the US and The Netherlands. Examples of these are high and low context cultures, ascribed and achieved status cultures, specific and diffuse- oriented cultures and feminine and masculine cultures. Below, we would like to describe these differences.

- High and low context

This is a dimension from Edward Hall . These are some of the differences between high and low context culture. If we want to give an answer on which culture is typical for the USA we should look how business people for instance are communicating with each other. The USA, as most western countries, is very low context orientated. You can notice this when you're looking at business relationships for example, but when you take a look at everyday activities you will notice that many relationships are based on the individual goals which people set for themselves rather than keeping good relationships with the people you do business with. Enterprise in The United States has a low context culture. First they look at the task and after the task, they will work on the relationship. People working at Enterprise in the US are straight forward. This also applies for the Netherlands.

Feminity vs. Masculinity

Hofstede explained that:

- In an Feminine culture, people prefer cooperation, modesty caring for the weak and quality of life.

- In a masculinity orientated culture however the people prefer to achieve goals, assertiveness, material reward for success and heroism.

In the United states you can clearly spot a masculinity orientated culture. This can be spotted for example in movies like “the wolf of wall street” which had a huge box office success whilst going about greed.  It shows that people idealize business people that have gained huge financial success. Another example is Donald Trump. Donald Trump is a business man that really believes in the American Dream and material rewards. He is really popular and that can be shown in the polls.  

- Specific and diffuse- oriented

This is also a dimension from Trompenaars . In specific-oriented cultures, people are direct and to the point. When you are working in countries with a specific-oriented culture, the relationship with your manager is work-related; you do not have contact with your manager in your private life. When you see your manager on the street, you will kindly greet him and walk along. In diffuse-oriented cultures, people are indirect and circuitous. When they see their manager in private life, they will have personal contact with him. They are always able to do tasks for their manager in private life.

The US is a country with a specific-oriented culture. The employee-manager relationship is primarily work-related: they usually do not have contact in private life. The Netherlands on the other hand, is a mixture of both cultures. Some only have a work-related relationship and others will have contact with their manager in private life. Dutch people are very helpful, also when it comes to activities outside working hours.

3.4 Advice

When we compare the cultural dimensions described above, we see that there are only a few differences in culture between the United States and The Netherlands. It becomes clear that both countries fit perfectly into the picture of Enterprise rent-a-car.

Enterprise Rent-a-car takes into account the cultural differences where the company has established itself. If you look at America and The Netherlands, there are few differences to be found when it comes to the cultural differences that we above have describe. Enterprise takes into account the cultural differences in different countries, by establishing themselves in countries where these differences are not very large.

Also, if you look at the HR strategy which Enterprise continues, you can say that they are trying to get everyone who works here to think, act and move alike throughout the whole company. They want to achieve high performances and establish bigger growth. This is accomplished by using their chosen strategy while taking the cultural differences in mind. Enterprise has done this by developing methods to motivate employees with trainings and career fairs. You will keep your employees involved and motivated. All this contributes to a strong, reliable and stable company, which has established itself all over the world , with all employees facing the same direction.

Chapter 4: HRM Practices

4.1 Recruitment

Recruitment is necessary to determine staffing needs, to increase effectiveness, both personal and professional, to increase the effectiveness of selection process and to increase the probability of retention .

HRM plays a very important role in the recruitment process by hiring, train or dismiss staff. Enterprise wants its employees to develop themselves and to reach the highest goal as possible. By training its own staff, the company can fully use the capabilities of its employees. On the other hand, Enterprise also needs to consider that they cannot always use their existing staff. They should make plans for the future; this is called ‘workforce planning'. For example, the company could grow into new markets, it may use new technologies or existing staff may leave or retire, which causes a gap. HRM plays a central role in this process, by monitoring all these factors and planning a recruitment strategy. Enterprise hires around a thousand employees each year .

Enterprise wants to attract highly qualified students, and therefore maintains relationships with several universities. They give presentations on the company, have relationships with clubs and organizations and they attend career fairs. Students can also visit Enterprise to learn their way of operating. Enterprise offers a job with the chance of a career and training. The company also wants to be a cultural and ethnic role model and states that they ‘seek and value people of all backgrounds, because everyone is important' and that they are ‘proud to be an equal opportunities employer' .

Enterprise has different ways of recruiting staff. One of them is the online recruiting process. Looking at the website , there is a search function where you can look for jobs, you can see recent jobs or you can sign up for a ‘job alert'. It also gives a lot of information about the eight values of the company (mentioned in the introduction), opportunities of the company, internships for students etc. This way, the candidate can already see if the company suits him or her.

Enterprise publishes its vacancies in different ways, such as social media, on their website and in newspapers. Enterprises recruitment website ‘come alive' plays an important part in this, as it is especially created for the company's recruitment . The website tells what candidates Enterprise is looking for, you can see the jobs available, learn all about internships and apply for a job here.

After having recruited for the job, it is time to select the best person for the job. The HR manager will first look at the job description and will see if this matches the person's skills and qualifications. After this, a job interview will be planned with a recruitment manager and if this goes well, with the branch manager. Candidates will be invited to an assessment day. This day, they will execute different activities, such as role play. Leadership, teamwork and work ethic will be tested. The day will end with another interview with a senior manager to make the final selection and then, a new Enterprise employee is born.

4.2 Management Development

Enterprise offers a job with the chance of a career. Most of the employees start at Management Trainee with a chance of becoming General Manager or Vice President. This career path starts with participating in the Graduate Management Trainee Program. The program offers a chance to develop yourself and to start a career at Enterprise. In eight to ten months, you can be an Management Assistant and later on Assistant Manager. You can gain great customer experience here and you can meet different partners such as the auto body shops and insurance companies.

4.3 Learning and Development

There are different ways to enter Enterprise. For example, first- and second year students can have an internship at the company. They can work with customers, learn from practice and work on their entrepreneurial skills. They have the same responsibilities as the management trainees.

Enterprise puts a lot of time and effort in training, learning and development. Therefore, the company recruits employees with the potential to grow, who are motivated and have initiative and drive. For example, Enterprise offers the management training program (see the ‘career path' in figure 1), because it wants the employees to develop themselves and to reach the highest goal as possible. Managers are promoted within the current staff. By giving them opportunities, Enterprise keeps its employees happy, and happy employees are more likely to stay longer. By training its own staff, the company can fully use their employees and reduces the need to hire external staff.

4.4 Performance Management & Reward

Reward at Enterprise is based on the employers performance. They offer several educational programs, for example in a classroom or you can get a mentor or practice-experience. They state that the learning never stops at Enterprise , and that ‘a great company has its rewards'.

Enterprise offers benefits in different categories :

- Health and Welfare Benefit Plan: for example, employees can enjoy visional, dental and general healthcare, life insurance and health savings accounts;

- Financial benefits, such as the Retirement Saving Program;

- Additional benefits such as employee discounts, vehicle rental and purchase discounts and the Service Award Program;

- Paid time off, such as holidays, vacation, and paid leaves, for example maternity or adoption.

4.5 Link with cultural preferences

From Enterprises' strategy, values and way of operating as explained above, it becomes clear that achievements are very important. The harder you work, the more you will be rewarded. Enterprise is looking for employees who are driven and motivated to grow, both personally and professionally. As told in chapter two, there is a difference between achievement and ascription. The view that achievement is most important, really fits the American culture but also fits the European and hereby the Dutch culture; and that is why the company works so well in Europe too.

Of course there are some cultural differences too, but Enterprise has one big advantage: although it is a large company, it operates like a small company and it has its branches decentralized. There are local managers who can make their own decisions, based on the needs of each location . Because it always puts its client in the center, Enterprise is different from its competitors.

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