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Essay: Lvmh is the biggest luxury brand name

23 July 202414 June 2012 by Essay Sauce

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Introduction

LVMH is the biggest brand name in the sector of luxury brands in field of Fashion & Leather Goods, Perfumes & Cosmetics, Watches and Jewellery, Wines & Spirits and also some choose retailing items. LVMH have portfolio of nearly 60 different brands over the world with their network of 2,300 stores and they deploy 77,000 employees to manage their network of stores. LVMH is the French origin but nearly 74% of them are outside the France. Their major know brands are Chateau d’Yquem, Moet & Chandon, Hennessy, Guerlain, Louis Vitton.  LVMH is running successfully from 1593, formation of Moet Hennessy in 1971 was the turning to the larger group. In 1987 name LVMH and in 1980 Group Arnault get the majority in shareholding. In 1999 LVMH introduce in watches & jewellery and selective retailing. Lvmh categorize its HRM around the world in five zones are France, Europe, the Americas, Pacific and Asia and Japan. Through this assignment I am trying to look the HRM policies and its effect on the LVMH.

Task 1

HRM Theory:

The changing nature of the employment relationship, and the consequences for how organisations and individuals are managed. It is now over a decade since the idea for a comprehensive treatment of HRM was conceived by authors. HRM debate of the past decade is that two common themes have persisted and yet neither has turned out to be the determining feature of the way the employment relationship is managed. The first theme is that of HRM’s replacement of the older traditions of personnel management and industrial relations. The approach of what might be termed the ‘Desperately Seeking HRM’ school of analysis seeks to explore the incidence, volume and influence of HRM-based approaches and practices, and to assess whether they are supplanting the historical patterns.

A framework for HRM analysis: strategy, style and outcome:

There are three approaches to looking at the phenomenon that might help to explain different groups of arguments, based on whether the analysis focuses on the role of strategy, style or outcome in the conduct of HRM.

HRM as strategy:

The strategic emphasis has by far the longest pedigree in the HRM debate; indeed, it is probably the strategic aspirations of the US models that were the defining feature of HRM as it emerged in the 1980s. Strategy has been seen as one of the touchstones of HRM’s viability. The extent to which HRM has come to play a role in the direction and planning of organisations has been a persistent them not simply in the academic literature but in practitioner activity too.

HRM as style:

The second approach, based around style of HRM, has also had an active life, and one that has attracted much discussion within the UK. Some of the antecedents to this can be traced back through the analysis of personnel as a function and personnel managers as actors within organisational setting. Thus Watson’s (1977) analysis if the professional role of personnel managers and Legg’s (1978) analysis for their political location within organisational roles can be seen as important precursors of this approach. The analysis of HRM in terms of style has also revolved around whether it can be regarded as hard or soft (Legge, 1995) in its intent. Hard HRM is sometimes defined in terms of the particular policies that stress a cost-minimisation strategy with an emphasis on leanness in production, the use of labour as a resource, and what Legge calls a ‘utilitarian instrumentalism’ in the employment relationship; at other times hard HRM is defined in terms of the tightness of fit between organisational. In LVMH three key HRM activities are recruitment and selection, training and development and performance evaluation.

HRM as outcome:

HRM, weather it is pursued by analysts, academics or practitioners, continues to expand and develop. So far from reaching the high-water mark and ebbing, HRM as a phenomenon continues to thrive. Indeed, the fusion of HRM with business focus, noted above, has ensured that many major organisational changes now intimately involve HRM as part of the equation. These changes provide the background against which human resource management has emerged as the predominant contemporary influence on managing employment relationships. It is now commonplace to describe HRM as a managerially derived and driven set of precepts with both line and HR managers actively involved in its operation. What is distinctive about the debate, and perhaps explains its capacity to renew itself after each wave of analysis has been assessed and absorbed, is the shift from the broad question of whether HRM exists at all to more focused analyses – for example, whether particular combinations of HRM policies produce better results in output or services so that competitive advantage might accrue to those organisations that adopt them. Thus HRM continues to provide agendas and prescriptions for debate amongst both practitioners and analysts that are contentious and compelling, and have no settled orthodoxy.

In LVMH employee work jointly with the business group which report to corporate headquarters. Approximately 55 to 65 % of force is controlled by companies, the as well managed by the business groups or corporate.

LVMH deploy the two HRM models which are and resource based model.

Best fit model:

The best-fit school explores the close link between strategic management and HRM. Which is focus on the competitive, finance, and HR strategies which took part in the business profitability? It will show the internal context of the organization. It will ignore the interest of the internal customer and some time wrong decision taken for the right person.

As per looking LVMH workforce planning and development strategy they ignore the employees interest though they are not attracting the experts through giving them higher rewards, they are looking for the cost cutting and efficiency. They considered that good package is necessary but it would not be the main reason to join the workforce or criteria for going abroad on assignment.

Resource based model:

The resource view represents a paradigm shift in strategic HRM thinking which is mainly focus on internal resources of the organization, rather than on analysing performance in terms of external context. In this view minimize the external context. It ignores value and consequence of common base line good practices.

LVMH is assigning an assignment to the internal employee rather then select experts from the external resources they also made list of persons which are ready to go with assignment given by the company for the time bound period to the specific non home country based. They are ignoring the global talent for the job in their selection for the specific type and term bound work.

LVMH is assigning task to their employee who is familiar with their operation and strategy which they implement to expanding their brand and business both in a such a professional manner like they have send marketing manager of the shoes department to the insurance marketing in another country to develop the expertise of individual employee they do such kind of movement is benefit the LVMH in long run.

Task 2

Training:

‘Training is any learning activity directed towards the acquisition of specific knowledge and skills for the purpose of an occupation of task’. (Cole, G A 1993:362). In other words, training is a process to enhance the knowledge we acquire or we have.

Development:

Development refers to ‘the skilful provision of learning experiences in the workplace in order to improve performance’. (Harrison, 1992:4). The development of employees in the workplace is essential for all categories of staff and can play a significant role in any change or integration process (e.g. mergers and take-overs and the ensuring integration of workforce. (Harris, Brewster & Sparrow, 2004, p.90). It is the process of the enhancement of performance.

Basic Overview of Systematic Approaches to Training and development:

A systematic approach consists of an inevitable training process that remains concentrate on the requirements of the organization. The process includes the following phases:

Analyze:

This approach analyzes the organization’s expectations from the employees and identifies the purpose of training so that employee’s skills can meet the organization’s needs. Typically, this phase also consists of identifying when training should occur and who should attend as learners.

LVMH experts are mainly from the France so they are mainly French language speaking but for the global mission of the company and their business is different content in the world, English is the main language which is spoken all around the world so they have to need a expert how can speak and understand English very well to deal with their routine business work for that LVMH has to find the persons who are going as a expert outside the headquarter and give them English language learning lesson for their English language skill development.

Design:

This approach designs a training system where learner and trainers implement it for meeting the learning goals. Basically, it includes analyzing learning objectives, required funding, and content of course, lessons and sequence of lessons.

LVMH has to design module of learning English language for the expertise that is on the assignment for the fixed term outside the France. For that they have to define a course outline to match the expert level in English with dealing professional deal with the day to day business routines and also familiar with the local staff the country.

Develop:

It develops the training materials and resources which called ‘training packages’ and this package include developing audio visual, graphics, manuals, etc.

LVMH have to develop such programme with the French subtitle which contain the whole English language learning from the route to expert level for that they have to provide each beneficiary from that programme get the Audio, Video and mixture of graphic can also add on.

Implement:

This approach implement the training packages which include providing the training, take group feedback, providing training materials, taking tests and conducting the final evaluation.

LVMH give training to the experts for the English language for their development part for the assignment to foreign country, get the feedback on the material which supplied to the potential candidate for the development and after taking training for the development and how they implement it and is it up to the mark which is defined by the HR department of the company.

Evaluate:

It includes evaluating and analysing before, during and after implementation of training.

LVMH have to weekly evaluation of the training programme of the learner what he learns is their any extra efforts to be made for any of them to learn in proper way if yes, they have to provide little bit extra attention to the person who need so.

Training and development strategy of LVMH:

LVMH use experts from their headquarter through selection method and give them proper training to explore their knowledge and gain their skills in the different fields like Insurance company VP transfer to the Cloths retailing company this kind of movement is for the time bound and give the such expertise to develop such skill and knowledge on the basis of that company gain the profit and individual career development also achieved by the company.

From the company’s point of view it is cost to the company to give training and development to the employee but to meet the criteria of assignment which assign to the employee outside the home country on the basis of that he or she will gain the knowledge and experience to take challenging task and complete that task in given time period. All assignment is outside home country so there is a barrier of culture come in the picture and employee has to make necessary changes in his or her behaviour or act as per the specific country needs. LVMH has to give training before going and after coming both times for the English language course. Company should not give pressure on the employee to complete it early give proper time to learn the English language so he or she can perform better.

Due to the international assignment is increasing in LVMH so, they have to take on account that they have to give their experts training for that and they ready to perform on task and help the HR.

Transferring experts outside the country is the main aim of the LVMH to develop own skill through taking own decision to improve the business of the company, also encourage self decision making and entrepreneurship. Through this LVMH can decide the future policy of employee’s development.

The group should believe concerning latest customs to extend its international mobility strategy so that it may enhance shore up a large career improvement policy. Finally, the question for LVMH is to find out how such a career improvement strategy can improved serve up its strategy of international development.

Task 3

HR performance:

Balance Score Card (BSC) is one of the way to evaluate and monitoring barometer for the HR department for their strategic goal achievement.

‘A tool for measuring the contribution of human resource management practices got the financial performance of an organization.’ The HR scorecard was developed by academics Bryan E. Becker, Mark A. Huselid, and Dav Ulrich and presented in their book The HR Scorecard: Linking people, Strategy, and performance (Harvard Business School Press, 2001). It was intended as a supplementary tool to Kaplan and Norton’s balance scorecard, which does not focus on HR practice. The HR scorecard sees human resource management practices as a strategic asset and provides a road map of six steps designed to help organizations integrate human resource systems with organizational strategy.

Fig 1: The HR Scorecard Strategy Map

HR focuses on the critical human capital requirements defined by the business. Previously, HR performance measurement at Verizon had focused solely on improvement for administrative and transactional efficiency such as the error rate in employee benefit processing and the number of training hours delivered per month. The focus was expanding to include new processes for the HR organisation to develop exceptional service delivery and increased employee value while ensuring a focus on cost and value.

Early Results:

An early benefit of the HR Scorecard work was that it provided a process for the senior HR team to focus on a clear and common objective: to establish a common strategy for HR in support of the business objectives. The high level strategy was for everyone to be a partner to the business. Rarely, however, did all of the HR leadership agree on how to implement the strategy because each person had a different opinion. Taking strategy and translating it into a measurement and management model gave specific and operational definitions.

Communication the HR Scorecard:

Communicating the HR Scorecard across the HR organisation and the business is a critical aspect of successful implementation. The development process increased learning and understanding but was only visible to the top leaders within HR and the business. To use the HR Scorecard to drive change throughout the organisation, the Planning, Measurement, and Analysis team developed a phased approach to communicate and train the managers and their departments on this new management tool. The emphasis on the scorecard was on the value the tool provided in communicating strategy and alignment to the business. It also served as a tool that provided proactive solutions to employee issue or deterrents before a negative impact could occur to the bottom line. Performance measurement was also an essential component, and all in the HR organisation had their incentive compensation tied to the results of the HR Scorecard.

Finance perspective:

In HR BSC is play a role for the reducing cost of HR. BSC is to identify the new potential areas where they can place their Human Resource and get the benefit to the organization. In case of LVMH they define the needed place where they can send their experts without giving them any extra benefit in terms of payment but give them flexibility to take their own decision in context of organization’s growth, through this practice they cut the cost of the HR by not hiring experts on higher pay and also they reduce cost of hiring experts and their training and development on this level they only provide the English language classes to the employee and their family members. This is the minimum expanse they have to do so it its bearable and worth to the LVMH for the future operations and growth.

Customer perspective:

Balance Score Card focuses on what customer want from the company and try to comply or implement their suggestion in their product range or services. LVMH is widely spread over the world so they look after the trend of world and follow the customer needs through their latest product launching time to time for that they take advice of their expert team in each selection and sub-section of the business or business units. LVMH is a brad icon in the world they can achieve this easily because they are in the business from almost 400 plus years through this period they have 60 highly prestigious brands developed and running successfully. This says that they have achieved customer’s need and they succeed to achieve their level of satisfaction through deliver them what they want.

Learning and Growth perspective:

As per the BSC looking forward to the growth is important element as concern to the HR performance systems. Kaplan and Norton says that ‘learning’ is important than ‘training’. This can comply with the aptitude with company have Human capital, Organization Capital and information capital. In regards to the good HR development system which lead to the learning and development of the human resource of the company and their performance. It is also look into the cross culture differences, inner improvement in form of self improvement of an individual person. Knowledge is the thing which can be utilise to work together with worker and organization, today world is changes every day in form of environmental changes as well as technological changes so it is need of the employee to take necessary training to understand the changes in technology and how to imply them in the day to day business work.

LVMH has to increase the number of classes for English language for their experts for making more and more expert to enable fluency in English language. If their all employees have this skill they can perform well in the each and every country around the world without any problem regarding the English language. LVMH has also have to make the list of the employees who know what and try to find the skill which they need to develop in regard to their foreign assignment and give them training on particular skill which they did not have knowledge, give them challenging task to perform and give full freedom to take decision in regard to the task for get better result from it.

Conclusion:

LVMH is the company which is exist from 1593 till this date means they have potential to sustain in the market with each and every environment if it is worst or good they have power to remain stable in any condition for that have to rely on their human resources mean their employee through which they are running their business for that they have to give training to develop such good business and their strategy to be the number one in the retail market.

I have try to show the work on basis of the case study given and try to justify my views on the LVMH but I am sure that it is not enough to the such a big organization in some words only still I am in a learning phase so I can make mistakes and I try to learn from that mistakes and get perfection in my study.