Understanding Organizations and Human Resource Practices

Information sheet

The company is a large advertising and marketing agency that develops and launches product promotion campaigns according to its clients’ needs and preferences. The organization renders a great variety of services including copywriting, market research, design, finance management, etc. Advertising is a customer-oriented business. It means that the organization works in close collaboration with clients and strives to establish long-term relationships with them. The list of current agency’s customers includes various business entities that need product or service promotion – manufacturers, retailers, and others.

The company endeavors to achieve maximum customer satisfaction. Its mission is the realization of even the most challenging ideas and projects through collaboration with clients and the development of partnerships based on trust, credibility, and high-quality service. Customers take a central part in the process of service delivery and even in the service initiation process itself¹. When being directly involved in the service delivery process, customers directly impact the quality of service operations. Moreover, the face-to-face interactions with clients facilitate differentiation of service range according to customer preferences.

Currently, the company works on a new product advertising project for a large UK retailer which plans to complete within the following 12 months. The project realization is the long-term organizational goal. The short-term objectives include marketing research aimed to increase the success in new project launching, product design, and development of the promotion campaign.

Business performance is always affected by many internal and external factors. The most important external factors are the following:

1. economic,
2. social,
3. political,
4. and legal.

The dynamic and rapid changes in the modern economy and globalization of markets significantly increase competition. It means that for the achievement of greater success in the marketing and advertising sector, it is important to remain flexible. Flexibility in the service delivery system implies the effectiveness of the response to both substantial environmental changes and customer differences².

The social factor is important as well. Through the consideration of the ethical principles of business conduct, and by addressing the needs and interests of a vast number of stakeholder groups, the company represents itself as a good corporate citizen and improves its reputation in the external environment³. In this way, it becomes possible to develop a positive perception of the brand in public and increase customer attraction.

The political policies, regimes, and changes influence the company to a large extent. The significant political risks include operational restrictions that may affect employment policies; financial, personal, or ownership rights; exchange control, etc. ⁴ It is possible to say that political factor is closely interrelated with the legal context because policies prompt the formation of particular legal rules and require abidance with them. Thus, the analysis of political risks and the evaluation of legal systems must be included in the business strategies.

The agency implements an informal structure of work operation (cross-functional collaboration) that facilitates decentralized decision making and active communication between departments; increase innovativeness and creativity⁵. The cross-sectional collaboration helps to align the fulfillment of main organizational functions: HR management, customer service (CS), marketing, and finance. This type of corporate structure may serve a dual purpose. Firstly, the representatives of different functional areas may provide expert information on the performance in their departments to align work outcomes and objectives among the various units. For instance, the observations of a CS manager regarding customer demands and preferences can be used for the development of more effective marketing strategies, improvement of HR practices aimed to refine CS, and revision of financial investments in the required organizational advancements. Secondly, the members of the cross-functional team can communicate project-related and corporate goals and values back to their departments and, in this way, encourage the enforcement of cultural and regulatory principles within the organization.

It is possible to say that among the four of Handy’s corporate culture models, person culture, and task culture fit the organization most. The company arranges teams specialized in the fulfillment of particular objectives. The teams comprised of 4-5 employees with common interests but the different point of views are characterized by increased innovation and high level of problem-solving capacity. In this way, this model fosters a creative work process because it allows open communication and collaboration. At the same time, a person’s culture means that the organizational interests do not prevail over the individual ones. The company provides its employees with the opportunity for self-realization and gaining financial benefits. However, the given model is associated with risks of managers’ reduced control over the situation within the firm and failure to achieve greater productive results and performance improvement. The company attempts to mitigate these risks by implementing a well-balanced motivation and reinforcement system which clearly states what type of behavior is approved, supports employee recognition, and efficiently aligns organizational needs with personal interests.

The role of HR

One of the current strategic organizational goals is opening a new branch in the foreign market. Entry to a new market may give company opportunities to strengthen its competitive advantages, yet the process of internationalization entails many financial and non-financial risks⁶. Therefore, the major strategic goal is the localization of business which implies the strategic adjustment of the internal organizational behavior to the needs and interests of the local customers and business actors. Localization will involve three main strategic points: external analysis, internal analysis, and learning. It is possible to say that HR practices are essential to the success of the suggested internationalization strategy because there are significant normative and behavioral variations in culturally distant markets; thus, the issue of adaptation is of vital importance for the organizational leaders⁷.

Since there is a lack of stability at the initial stage of the internalization process, and since the potential local employees may show strong adherence to their national and cultural customs, the company needs to build a system of labor relationships with new subordinates in which the external cultural factors will be considered. This system should serve as the basis for the development of an adequate strategy of cross-cultural management, and it is almost impossible to achieve any of the mentioned objectives without excellent HR management.

Along with staffing, the HR department performs many essential functions including

1. corporate culture development,
2. safety and well-being promotion,
3. enhancement of employee communication and relationships, and others.

Opening a new branch means that new hires should be recruited. HR specialists negotiate conditions, benefits, and compensations with contenders. When entering a new market, the company should also recognize the importance of the local working conditions and readjust its organizational culture to the norms and cultural peculiarities of the hosting state⁸. The cultural readjustment can be supported by staff development based on such HR activities as training, provision of feedback to management and employees, etc. The development of labor relationships also implies the mitigation of potential disagreements between leadership and subordinates which are inevitable at the initial stage of internationalization.

The mentioned functions and activities are concerned with both individual and organizational welfare and the provision of mutual benefits that increase job satisfaction and reflect the understanding of personal and corporate needs. HR professionals support the line managers and staff by

1. balancing between organizational and employee needs,
2. Ensuring abidance with legal regulations,
3. Communicating corporate values among all employees.

HR managers mediate between top management and individual employees and strive to achieve the balance between their interests. In the international team, communication and understanding may be particularly challenging. And in such a situation, the role of HR managers becomes even more important because it is their primary responsibility to ensure the maintenance of order in employee relationships through the enforcement of legal, ethical, and safety principles at different organizational levels. Secondly, HR managers support the company’s leadership and employees by reporting the cases of workplace abuses, promoting compliance with employee rights, and communicating corporate mission and values through staff education.

HR practices play a significant role in the organisational strategic approach to productivity and creativity increase, improvement of job satisfaction, enhancement of individual and organizational work outcomes⁹. It is possible to say that HR activities help to develop trust in the relationships between management and employees. And the communication based on trust is core to the health of the corporate environment because it demonstrates that an organization recognizes the needs of its employees, provides opportunities for self-realization and growth.

Additionally, HR management supports learning orientation and knowledge management that involves the accumulation of information related to the internal and external environments, its storage, and flow within the organization. The movement of information ensures the cohesion among distinct organizational sections and their functioning, and it plays a major role in the development of the corporate culture and integration of organizational values into it. The establishment of the dialogue with employees and the improvement of stakeholder relationship through HR activities, as well as practices of the value creation and promotion, may be highly beneficial for the company because the development of organizational values and knowledge capital is the competitive advantage that helps managers to sustain business in the modern ever-changing economic environment and achieve positive productive and financial results.

Reference List

Buzacott, J. A. and Mandelbaum, M., ‘Flexibility in Manufacturing and Services: Achievements, Insights and Challenges’, Flexible Services and Manufacturing Journal, vol. 20, no.1-2, 2008, pp. 13-58.

Gao, J. et al., ‘Service-Oriented Manufacturing: A New Product Pattern and Manufacturing Paradigm’, Journal of Intelligent Manufacturing, vol. 22, no. 3, 2009, pp. 435-446.

Greenwald, B. and Kahn, J. ‘All Strategy is Local‘. Harvard Business Review, Web.

Guo, H., ‘Intrapreneurship, Human Resource Management, and Their Interfacial Interaction: A Study on Multi-Cases in the Mature Stage’, Journal of Chemical and Pharmaceutical Research, vol. 6, no. 5, 2014, pp. 1801-1805.

Kim, S. and Kim, S., Global Corporate Finance: Text and Cases. Oxford, Blackwell Publishing, 2009.

Lekman, L. and Chelliah, J.,’What Are the Antecedents to Creating Sustainable Corporate Entrepreneurship in Thailand?’, Contemporary Management Research, vol. 10, no. 3, 2014, pp. 181-201.

Mihelic, K., Lipicnik, B. and Tekavcic, M., ‘Ethical leadership’, International Journal of Management and Information Systems, vol. 14, no. 5, 2010, pp. 31-41.

Toh, S. and Srinivas, E., ‘Perceptions of Task Cohesiveness and Organizational Support Increase Trust and Information Sharing Between Host Country Nationals and Expatriate Coworkers in Oman’, Journal of World Business, vol. 47, no. 4, 2012, pp. 696–705.

Wang, Y. and Suh, C. ‘Towards a Re-Conceptualization of Firm Internationalization: Heterogeneous Process, Subsidiary Roles and Knowledge Flow’, Journal of International Management, vol. 15, no. 4, 2009, pp. 447–459.

Footnotes

1. J. Gao et al., ‘Service-Oriented Manufacturing: A New Product Pattern and Manufacturing Paradigm’, Journal of Intelligent Manufacturing, vol. 22, no. 3, 2009, pp. 435-446.
2. J. A. Buzacott and M. Mandelbaum, ‘Flexibility in Manufacturing and Services: Achievements, Insights and Challenges’, Flexible Services and Manufacturing Journal, vol. 20, no.1-2, 2008, pp. 13-58.
3. K. Mihelic, B. Lipicnik and M. Tekavcic, ‘Ethical leadership’, International Journal of Management and Information Systems, vol. 14, no. 5, 2010, pp. 31-41.
4. S. Kim and S. Kim, Global Corporate Finance: Text and Cases. Oxford, Blackwell Publishing, 2009, p. 53.
5. L. Lekmat and J. Chelliah, ‘What Are the Antecedents to Creating Sustainable Corporate Entrepreneurship in Thailand?’, Contemporary Management Research, vol. 10, no. 3, 2014, pp. 181-201.
6. B. Greenwald and J. Kahn, ‘All Strategy is Local’, Harvard Business Review, Web.
7. Y. Wang and C. Suh, ‘Towards a Re-Conceptualization of Firm Internationalization: Heterogeneous Process, Subsidiary Roles and Knowledge Flow’, Journal of International Management, vol. 15, no. 4, 2009, pp. 447–459.
8. S. Toh and E. Srinivas, ‘Perceptions of Task Cohesiveness and Organizational Support Increase Trust and Information Sharing Between Host Country Nationals and Expatriate Coworkers in Oman’, Journal of World Business, vol. 47, no. 4, 2012, pp. 696–705.
9. H. Guo, ‘Intrapreneurship, Human Resource Management and Their Interfacial Interaction: A Study on Multi-Cases in the Mature Stage’, Journal of Chemical and Pharmaceutical Research, vol. 6, no. 5, 2014, pp. 1801-1805.