HUMAN RESOURCE MANAGEMENT
ENVIRONMENTAL SCANNING EXERCISE [Lesson Module 1]
1. (a) Select an industry with which you are somewhat familiar [e.g., kitchen appliance manufacturing, personal
care products, or after-market automobile parts]. (b) Identify three countries with which companies in your
nation might establish a partnership or subsidiary. (c) Assume your locally-based corporation has entered into
joint ventures [shared equity and management partnership] in two of those countries, and has a wholly-owned
subsidiary [i.e., no partner] operating in the third [your choice]. In both types of business relationships your
company has employed a combination of expatriate [i.e., parent-country employees who have been employed in
your local operations] as well as host country nationals [HCNs], and employees from at least one other third
country [TCNs].
2. Identify basic trends in the following aspects of the business environment which might affect your business
over the next two or three years while engaged in a partnership [international joint venture] or with a whollyowned subsidiary doing business in the group of countries you are assigned. Cite your sources.
Economic
Social-Cultural
Political-Legal
Technological
Market
3. From your analysis, determine potential implications for HRM policies and practices.
4. Using the outline below, prepare a 5-10 minute overview of your findings.
5. Conclude by telling what additional information you would seek and what sources you might use.
BRIEFING OUTLINE
1. Industry: ____________________ Group of Countries: _________________________
2. Key Environmental Trends and HR Implications
Environmental Factors and Trends
[list several key factors for each of the following]
HRM Policy Implications
[Identify HR policy implications associated with this and
other factors/trends in the column to the left]
Economic Conditions
Social-Cultural
Market/Competition Changes
Technological Changes
Political-Legal Conditions
3. What additional information would you seek, and name some potential sources.
1
HUMAN RESOURCE MANAGEMENT
ENVIRONMENTAL SCANNING EXERCISE (Lesson Module 1)
1. Industry: _Construction
Afghanistan (whole-owned subsidiary)
Group of Countries: _China, Japan (joint ventures), and
2. Key Environmental Trends and HR Implications
Environmental Factors and Trends
HRM Policy Implications
fist several key factors for each of the following/ [Identify HR policy implications associated with this and
other factors/trends in the column to the left
Economic Conditions
China-Undergoing economic boon, history of - Adjust salary benefits based on strength of economy
unsteady economy, massive construction upgrades and local currency (Yen, ete...)
force competition among other nations with limited - Address Afghan support function availability
world suppliers, GDP Growth is 9.1%
(medical, etc...) with coalition forces versus off local
Afghanistan - economy on the rise from coalition economy and in conjunction with governmental
nation support - GDP Growth 28.6%, massive/rapid support agreements, etc...
construction upgrades
- Provide security training for unsecure Afghan
Japan - One of the strongest economies in the world, environment as well as potential support agreements
suffers from a no-import policy that requires the export from coalition forces
industry to support a lagging domestic industry
Social-Cultural
China - Wide range of religions practiced (primarily Provide cultural awareness programs to address
Buhhdism and Taoism, with smaller numbers of
various religious and cultural differences as well as
Muslims, Protestants, and Catholics),
awareness of local sensibilities towards TCN and PCN
Afghanistan -Male-dominated society attempting religious and cultural backgrounds
reform, primarily Muslim (Shi'ite and Sunni who are - Train personnel on differences inherent with team-
strong majority - instability resulting)
oriented approach
Japan - Team-oriented environment, personal gain
secondary
Market Competition Changes
China - Focus on opening up market China's market - - Train personnel on current market status in China
major market opportunities viewed by all
and Afghanistan and potential for a high influx of
Afghanistan-Agreement signed to promote trade competition based on opportun market
Japan - Competition to domestic industries closely - Adapt procedures to incorporate local governmental
monitored-heavy focus on export market with
agreements and regulations
restrictions on imports
Technological Changes
China - Focus on importing technologies that could -Train personnel on existing facility standards and
directly translate into upgrading building standards compatability to parent nation standards.
Afghanistan - Help being solicited to stand up
Train personnel to bring local subcontractors in
assistance to the Government of Afghanistan in
Afghanistan up to industry standards
planning and implementing a new National Institute of
Standards
Japan - Similar facility standards but with
nonstandard parts and supplies. Buildings built to
typhoon specifications
Political-Legal Conditions
China-Commitment under curent regime to economic For all three, address local political and legal
reform and opening to outside world, human rights agreements that support/don't support subsidiary
issues remain prominent
efforts. Address salary benefits based on tax
Afghanistan - Held first open election in 2003,
requirements for TCN and PCN employees.
Japan - Heavy emphasis on protection of domestic
industries (hence extensive restrictions on imports)
Sources:
BRIEFING OUTLINE
1. Industry: Aircraft Avionics Developer/Producer Group of Countries: US, UK (joint venture), India (3rd
country)
Sykes Avionics Co., based in Wichita, Kansas.
Designs, develops, produces, and markets aircraft avionics components for both commercial and
military applications.
Joint Venture with Limmey Displays in Manchester, England
Mumbai Magie, a wholly-owned subsidiary of Sykes Avionics Co., Mumbai, India
2. Key Environmental Trends and HR Implications
Environmental Factors and Trends
HRM Policy Implications
[Identify HR policy implications associated with this and other
factors/trends in the column to the left
[list several key factors for each of the
following/
Economic Conditions
- Markets primarily US and Europe
(Source: "A hulking beast joins the dogfight,
The Economist, Jan. 18, 2005))
-All employees need to have "global mindset', they are not just
working to satisfy their market, but working together to serve
all markets
-Effect of weak S/strong £ and €
(Source: "The Passing of the Buck" The
Economist, Dec. 4, 2004, p 71-73)
-Can cause anxiety in high cost labor markets, emphasize to
employees that company wants to maintain long-term presence
in all markets and will not overreact to cyclical economic
trends
-Cheap cost of labor in India (outsourcing - With operations in India, employees at other location may
potential)
develop fear of their job being outsourced, need to make sure
(Source: "How to Tap India's Cheap IT employees understand that the company values people and is
Labor: Three things you need to know before not just looking for the cheapest Shired gun' from around the
you travel this route" CFO.com,
world, make sure they see their role as important and
http://www.cfo.com/article.cfm/2988372?f-ar significant, i.e. they are not so easily replaced
chives
Social-Cultural
-Cultural differences between 3 countries -First, be aware of these differences
(Source: Course Texts and Samovar & Porter Second, take proactive steps to promote cultural
(editors) Intercultural Communications: A understanding, also enculturate all employees worldwide so
Reader, 2003.)
they have a common vision of how this company operates, i.e.
create an 'in-group
Third, take advantage of these differences by identifying the
strengths of particular groups and then use those strengths to
develop competitive advantage and to teach to other global
employees.
Fourth, I would ensure a systematic process for the
incorporation of expatriates into new environments rather than
just trying to scoop people up within the organization and send
them somewhere else, with the following desired steps:
1. When possible, draw expatriates from within the company
or subsidiary so that a certain amount of enculturation into the
corporate environment has already been accomplished and
provide something for the traveler to hang on to
2. Before moving an employee make sure they participate in
what the course text called a SWAT team or other exercises
BRIEFING OUTLINE
1. Industry: Engineering and Construction
Group of Countries: Russia, Republic of Georgia, Turkey
2. Key Environmental Trends and HR Implications
Environmental Factors and Trends
[list several key factors for each of the following
HRM Policy Implications
[Identify HR policy implications associated with this and
other factors/trends in the column to the left
Economic Conditions
Russia- Booming growth rate
(WOS) Poor Banking system
Low wages for Eng. & Construction
Professionals (HCN's)
Competition for competent employees
Currency exchange rates vary frequenty
Pay above average wages - seek higher level of skill
High quality of Professionals (HCN's)
Identify Highly qualified professionals and attempt to
attract them to the company through professional
channels
Seek high level of multi-languaged professionals
English spoken by young professionals
(HCN?s)
Republic of Georgia
(JV) Sluggish economy
Great deal of corruption
Low wages for Eng. & Construciton
Professionals (HCN's)
Sluggish economy may cause "stampede"
for better
paying jobs.
Require "Ethics Training" for all HCN's
Pay above average wages-seek higher level of skill
Low quality of technical expertise (HCN's)
Lack of English spoken (HCN's)
Poor Banking system
Development of Technical Training programs
Development of English language training
Consider paying employees in cash
Turkey-Booming Economy
(JV) Good banking system
Wages are moderate (HCN's)
Professional Expertise readily available
(HCN?s)
English widely spoken (HCN's)
Competition for competent employees
Exchange rates stable
Wages high but reasonable for what you get
Training requirements will be minimal
Training requirements will be minimal
Social-Cultural
Russia-Close family ties
(WOS)
Dedicated work foree (HCN's)
Workers willing to learn western methods
Alcohol consumption is a problem (HCN's)
Special provisions for family related issues, le, death and
maternity leave
Rewards and recognization programs will boost
productivity
Minimal training required but will pay great dividends
Assistance programs recommended/screening programs
required
Housing/schooling double that of North America.
Medical facilities excellent
Not a problem
High cost of living/housing/schooling/medical
(expat-TCN's)
Religion
Republic of Georgia-Close family ties
(JV)
Dedicated work force (HCN's)
Special provisions for family related issues, ie, death and
maternity leave
Rewards and recognization programs will boost
productivity
Minimal training required but will pay great dividends
Workers willing to learn western methods
BRIEFING OUTLINE
1. Industry: Engineering and Construction
Group of Countries: Russia, Republic of Georgia, Turkey
2. Key Environmental Trends and HR Implications
Environmental Factors and Trends
[list several key factors for each of the following
HRM Policy Implications
[Identify HR policy implications associated with this and
other factors/trends in the column to the left
Economic Conditions
Russia- Booming growth rate
(WOS) Poor Banking system
Low wages for Eng. & Construction
Professionals (HCN's)
Competition for competent employees
Currency exchange rates vary frequenty
Pay above average wages-seek higher level of skill
High quality of Professionals (HCN's)
Identify Highly qualified professionals and attempt to
attract them to the company through professional
channels
English spoken by young professionals
(HCN’s)
Seek high level of multi-languaged professionals
Republic of Georgia
(JV) Sluggish economy
Great deal of corruption
Low wages for Eng. & Construciton
Professionals (HCN's)
Sluggish economy may cause "stampede"
for better
paying jobs.
Require "Ethics Training"
for all HCN's
Pay above average wages-seek higher level of skill
Low quality of technical expertise (HCN's)
Lack of English spoken (HCN's)
Poor Banking system
Development of Technical Training programs
Development of English language training
Consider paying employees in cash
Turkey- Booming Economy
(JV) Good banking system
Wages are moderate (HCN's)
Professional Expertise readily available
(HCN?s)
English widely spoken (HCN's)
Competition for competent employees
Exchange rates stable
Wages high but reasonable for what you get
Training requirements will be minimal
Training requirements will be minimal
Social-Cultural
Russia-Close family ties
(WOS)
Dedicated work foree (HCN's)
Workers willing to learn western methods
Alcohol consumption is a problem (HCN's)
Special provisions for family related issues, le, death and
maternity leave
Rewards and recognization programs will boost
productivity
Minimal training required but will pay great dividends
Assistance programs recommended/screening programs
required
Housing/schooling double that of North America.
Medical facilities excellent
Not a problem
High cost of living/housing'schooling/medical
(expat-TCN's)
Religion
Republic of Georgia-Close family ties
(JV)
Dedicated work force (HCN's)
Special provisions for family related issues, ie, death and
maternity leave
Rewards and recognization programs will boost
productivity
Minimal training required but will pay great dividends
Workers willing to learn western methods
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