The retail sector is considered as highly growing industry that supports the economy in developing their GDP. With the increasing scenario of globalization as well as advancement in the technology support the retail industry in attaining the future growth and development (Zhu and Kraemer, 2005). The present report focuses on choosing the leading retail supermarket that is Marks and Spencer that engage in expanding their activities in the other region with the growing concept of globalization. Along with this, it will also critically evaluate the international business environment in the target country with the help of using different models. Moreover, it also evaluates the key HRM practices that would support the organization to adopt in the target market. Lastly, it would also recommend the proper analysis of the human resource management issues within the target market.
1. Overview Of Company And Evaluation Of International Business Environment
The leading multinational company Marks and Spencer (M&S) one of the renowned names in the UK retail sector that specializes in selling a range of luxurious clothing and other products to the customers (Lado, Dant and Tekleab, 2008). The company has the largest number of stores in the UK region while they also have other stores in different parts of the world. Along with this, retail firms also attain sustainability by delivering high-quality goods as well as branded products. The company also offers its range of products via their online websites and authorized retail stores both in the UK region and in the international marketplace. It has been also assessed that customers prefer to purchase their products as it possesses innovation as well as it also offers greats value of the products to the customers that assist in attaining their objective (Lewison and Balderson, 2013). The key international objective of a retail firm is to expand its activities as well as to attain the market share across the globe that supports enhancing its visibility. Therefore, to penetrate the new market M&S HR manager would consider the feasibility of the market environment.
With the increasing aspect of globalization, the leading retail brand of the UK focuses on targeting the new market in order to attain its large market share. The selected target market for Marks and Spencer is Japan as they do not have M&S within the country (Som, 2007). Therefore, to successfully expand their business activities in the new target market it is essential for the HR manager to critically evaluate the international business environment so that the cited firm can easily grab the target market. With the help of engaging in PESTLE analysis, the HR manager can easily assess the external environment of Japan in which the company would operate its business activities (Akong'o Dimba, 2010). The PESTLE analysis mainly focuses on different factors such as-
The foremost external environment factor that would affect the activities of M&S in the new target market is the political factor within Japan (Ratna and Singh, 2013). There is a political factor within the country is stable in nature that supports in building effective relationship among the neighbor countries such as Russia, South Korea, etc. that benefit the country in establishing the retail outlet.
Another external business environmental factor that impacts the business activities of a leading retailer in Japan includes its economic factor. The economy is highly developed and has the largest economy across the world that results in increasing the standard of their products (Birdi and et.al. 2008). Another economic factor that impacts the activities is that the economy has a high living standard therefore, they tend to purchase higher income and quality products that affect their operational activities.
Another business environment factor within the Japanese economy is a social factor that directly impacts the activities of the retail firm in the region (Wilton, 2016). As with the increasing aging population within the target market, M&S must focus on selling the clothes according to the preferences of the old people in which they are more comfortable.
Another external environment factor that impacts the activities of retail firms in the Japanese market is a technological factor. Japan is among the developed countries therefore, the advancement in technology support the M&S to expand its activities in the new market (Caligiuri, 2014). Moreover, the technological factor company can easily introduce their mobile application or engage in an online platform for selling their range of products to the ultimate customers.
In order to succeed in the new target market, human resource managers need to consider as legal factors of the target market so that they must engage in framing such policies that are abided by their legal system (Bednall and Sanders, 2014). The legal system of Japan mainly focuses on the different labor laws as well as employment laws such as minimum wage law, working hours, etc. that would support M&S to successfully enter into the Japanese market.
The last external business factor that would impact the activities of the retail firms is the environmental factor. In the present scenario, it is essential for the firm to engage in sustainable activities so that it may not impact the environmental activities within the new target market (Behery, Jabeen and Parakandi, 2014). For this, M&S would engage in recycling packages of their products so that it may not harm the environment.
2. Hrm Functions That Can Be Adopted In Target Country
With critically evaluating the external environment of the target market, the newly appointed HR manager of Marks and Spencer must also assess the different HRM functions that can be adopted by them to enter into the target market (Van Dooren, Bouckaert and Halligan, 2015). With the different functions, the HR managers must also address certain issues that are associated with them so that they can easily overcome the issues to succeed in the new target market. The different HRM functions that can be adopted in the target country are as follows-
a) SHRM policies and best practices
Strategic Human Resource Management (SHRM) is regarded as an effective approach that assists the company in attaining long term business goals and objectives. This basically includes components such as maintaining discipline, boosting the morale of employees, payroll, etc. therefore, it is essential for the organization to consider such policies and practices that would support maintaining healthy relationships among employers and employees (Wilton, 2016). It is also stated that with the effective SHRM policies and practices all the activities related to human resources are interlinked for the accomplishment of overall objectives and goals of the organization. Within implementing the policies and practices that can be adopted in the target market results in arising certain issues and challenges it mainly includes issues related to change management (Decramer, Smolders, and Vanderstraeten, 2013). If the HR practices are not effective in implementing the change within the organization then it might results in arising issues for the Marks and Spencer to get established in the new target market.
b) Recruitment and Selection procedures
Another HRM function that needs to be considered by the newly appointed manager of HR managers for expanding their international activities in the new target market is engaging in proper recruitment and selection procedures (Shackleton, 2015). In order to attract a competent workforce within Japan newly appointed HR manager of M&S would use effective procedures that will positively or negatively impact the operation of the business. It has been assessed that employees are considered as an essential asset or possession of the organization (Importance of recruitment and selection, 2016). With the help of adopting this procedure, they would select qualified and competent personnel for the new retail firm that results in successfully establishing in the new marketplace. Along with this, with using effective recruitment and selection procedure M&S would also select competent personnel for the different job posts so that they may easily attain the goals and objectives. Recruitment procedures that can be adopted for the target market include advertisement through an online platform so that large candidate gets attracted towards the job post. The key significance of using effective recruitment and selection procedures for the retail firm is that it reduces the cost of an organization as well as it also results in overcoming the financial loss (Slocum, Lei, and Buller, 2014). Along with this, another significance of recruitment and selection procedure is that it results in retaining staff within as selecting competent candidates would result in building commitment towards the organization.
In the situation, if recruitment and selection procedure is not properly adopted within the new target market then it may result in arising challenging situation as well as issues. The issues associated with improper recruitment and selection procedure are that it outcome as an expense for the M&S if the manager engages in selecting the wrong or incompetent candidate for the new store in Japan. Another issue that arises with improper procedure is that it might results in impacting the performance of the organization (Boyce, Corbet and Adler, 2013). As it results in selecting the wrong candidate that requires a lot of attention by the manager therefore, it results in wasting the time as well as resources that impact the performance of an organization in the new region. Moreover, another issue of poor recruitment for M&S is that it also results in increasing the number of errors within the organization that further impact their decision making within the organization.
c) Training and Development
Training and development are two major parts of the organization, by this way employer of Marks and Spencer can enhance its profitability of the organization to a great extent. As it is a multinational corporation to run business in Japan country smoothly it is required that employees perform their work effectively. It can only possible when all-sufficient skills and knowledge about their roles have and job profile (Liu, Keeling and Papamichail, 2015).
Training has far differed from development, training is the learning process in which e worker of a particular company gets the opportunity to develop their skill. Whereas development is considered as an educational process that can assist in the overall growth of the persons. Training is given by Marks and Spencer for a particular profile so that individuals can do all tasks easily and can communicate with people of Japan well. As for entering into a new market and nation, it is essential to understand the culture and needs of the population which can be possible when an employee is able to communicate with them. By giving them training will be able to enhance their skills so they will be able to convey better with the audience (Sung and Choi, 2014). So it is for a particular task and for a short duration. On the other hand, development is for the long term period it can give huge benefits to persons and it can help in its career growth. Training focuses on the present situation but development programs are organized for future development.
Importance of training and development
Training is very important as it will help the HR manager of Marks and Spencer to address the weakness of its employees. The main purpose of arranging such type of programs in the cited firm is to enhance lacking points of workers so that they can perform well in the organization (Caligiuri, 2014).
By giving them training timely HR managers of Marks and Spencer can increase the confidence of workers to work in a different location, as a culture of Japan has far differed from London so it is very necessary that people feel motivated to work in the new area. Some times due to lack of confidence they leave their jobs. By giving them training cited firms can reduce job turnover to a great extent.
T & D gives employees promotion and career growth opportunities, so they will find it interesting and stay in the firm for a longer period. In this way, the objective of expansion in Japan will easily be achievable successfully (Bednall and Sanders, 2014).
Untrained people expensive for the organization that can result in lower production, but by giving them proper effective knowledge HR manager of Marks and Spencer can enhance their knowledge thus, they will be the more productive thus operational cost of the company will get down.
Types of training:
In Marks and Spencer off the job, training is available, as cited firm wants to expand its business in Japan so it can not give directly on the job training to its staff members. Because the culture of both countries has differed from each other. It may be possible that due to cultural difference newcomer get depressed and feel uncomfortable. So by giving them off job training HR managers can make them aware of the cultural background of Japan. That will help candidates to adjust and work in a slightly different environment (Lamba and Choudhary, 2013). Marks and Spencer provide classroom lectures, visual presentations, and role-playing to train staff members. In this way people get to know all the relevant information about their role and responsibility and background of Japan. This will help them to perform better in a new country, so it will be beneficial for the organization as it will successfully establish its brand in the new nation.
Marks and Spencer also have a procedure to give in house training to its employees. It is a cost-effective method in this HR manager just send a trainer who can give all detail about the job responsibility, firmly do not have to set up an environment so it is a cost-saving technique. In this trainer pay more attention on specific subject and skills which are required to perform well in new culture. It saves time for the company and people enhance relevant skills within them.
Development frameworks are very important in the organization to motivate staff members and to enhance their morale so that they can perform well in cross-culture. By looking upon these frameworks HR managers can improve their practices. With the help of effective training strategies a company can analyze its weakness and can work to improve this. Training and development strategies can help to improve efficiency of HRM (Birdi and et.al. 2008). Development frameworks assist in analyses that actually outcome is the same as wanted or not. The HR managers of Marks and Spencer can collect relevant information and can improve their practices to get an optimistic outcome. It will help to analyze the gap between current strategies and the required ones.
d) Performance management system
The performance management system is an essential part of HRM practices. It assists to track and monitor the performance of individuals in the organization. In Marks and Spencer human resource manager uses performance rating strategies, it helps them to identify the best performer and then HR manager give them rewards to motivate them (Behery, Jabeen and Parakandi, 2014). Managers of each department make checklists of an attitude of employees and as per their views, they give their views regarding workers' performance to top management. In this way people get equal treatment in the workplace.
It is important for the organization, as in this way HR manager can encourage its staff members and can enhance their working performance. In this way they will staff in the organization for a longer period. It helps to reduce job turn over in the cited firm. By this revenue of the company can get enhanced. Apart from this it helps to identify weakness of employees of Marks and Spencer thus, managers can provide them training accordingly. It is a great technique and can help in the success of the cited firm to establish in the new Japanese market easily.
Through adopting this HRM function within the target market that is Japanese market it might result in attaining some issues that is it might result in lowering the morale of workforce as they would feel that they were assessed unfairly, therefore, it might results in disengaging staff within the organization (Van Dooren, Bouckaert and Halligan, 2015). Along with this, another issue of a poor performance management system is that fabricated information in the performance management system would impact the review of the individual performance that might result in the improper review of the performance. Therefore, it might result in impacting and affecting the individual performance towards the retail firm in the newly targeted market. In addition to this, another issue that arises within the performance management system is that improper practices would result in lowering the self-esteem of the staff that would create bitterness among the management personnel and towards the organization (5 Problems with Performance Management as we know it, 2016). Along with this, improper performance management system within the cited retail firm also results in lowering the job satisfaction among the staff. As, they feel that they are unfairly and unequally treated within the organization in terms of their performance. Therefore, staff within the new retail firm become dissatisfied as well as burnt out or stress out within their job roles. Thus, for adopting this HRM function newly appointed HR manager of M&S would assess all the issues and challenges.
e) Compensation and benefits
While entering into the new market that is Japanese market HR manager would also focus on one of the effective HRM functions that is compensation and benefit. The workforce within the Japanese market is highly skilled that requires high compensation as well as benefit that would meet their financial requirement (Decramer, Smolders and Vanderstraeten, 2013). Along with this, proper and effective compensation package would also assist the workforce to match the standard of living as the economy of Japan is highly developed in nature. Thus, compensation and benefits is another HRM function that would be adopted by HR manager to successfully operate their activities in the new market.
Compensation is termed as reward that is payable or earned by the workforce in regard with their services that they render within the cited firm (De Waal, 2013). There are different types of compensation that is fixed by HR manager of M&S within the new market for attracting the candidate and workforce towards the new store and outlet. The types of compensation focus on direct, indirect and non-financial compensation that assists the employees to render effective services within the retail supermarket. The direct compensation is in form of wages or base salary that is paid to the staff or workforce in the constant interval for their services and activities that they render within the retail supermarket. On the other hand, non-financial compensation are referred as the opportunities that are provided to the individual or staff for enhancing their career development as well as it also ensure recognition that support the staff to be in the newly set up retail firm. Whereas, benefit is defined as expecting something extra not in terms of monetary value but in the non-monetary form also. Thus, the employee benefits are most in the non-financial terms that enriches the lives of staff.
Therefore, to establish effective compensation package for the different level workforce within the retail supermarket HR manager focuses on using different approaches and methods that support in setting up the salary for staff (Hofmann, 2015). The significance of engaging in compensation and benefit practices within the newly retail firm is that it assists in acknowledging the services and activities that are delivered by the different staff and workforce within the supermarket. It further results in persuading the customers in purchasing their range of products and merchandise. The significance of adopting this HRM practices within the newly set up firm is that it assists in enhancing and promoting the motivational level of the candidate those who have been hired within the retail firm. It has been assessed that some value are accomplish more than the financial terms that results in attaining the growth and development of the individual staff within the establishment (Zhu and Kraemer, 2005). Along with this engaging in compensation and benefit practices within the M&S also support the employees in increasing their confidence level as they are benefitted from different monetary and non-monetary rewards.
Along with this, compensation and benefit practices if not managed and implemented properly within M&S then it might results in attaining several issues related with executive compensation. As, to attract and retain senior level personnel within the retail firm it is essential to engage in the executive compensation that differ from their managerial and other staff working in the retail firm (Lado, Dant and Tekleab, 2008).
3. Recommendations For Overcoming Human Capital Management Issues In Target Country
In order to overcome or manager the human capital management issues in the target country that is Japan it is required by the newly appointed HR manager to be recommended with the certain ways. Therefore, certain recommendation for overcome human capital management issues and challenges are as follows-
- Handling diverse workforce: The foremost recommendations for overcoming human capital management issues in the Japanese market is engaging in effective strategies and activities that support in handling the diverse workforce (Lewison and Balderson 2013). The Japanese market focuses on diverse culture workforce that needs to be handled and managed in the proper manner so that M&S would easily overcome the issues related with the human capital management. With the diverse workforce al individual uses their own activities and ideas within the retail firm to persuade the customers in purchasing their products and merchandise.
- Workforce training: Another recommendation for the newly hired HR manager of M&S for overcoming and managing the human management issues within the Japanese market include engaging in the workforce training so that the existing staff or workforce may easily enhance and amend their skills and abilities that support them in performing their job role in the proper and adequate manner (Akong'o Dimba, 2010). Along with this workforce training also assists the human capital to get efficient and effective in accomplishing the stated goals and objectives with overcoming the issues that benefit the overall organization to sustain in the new target market. In order to overcome the human capital management issue within Japanese market HR manager should devise effective training session in the regular interval so that workforce can easily amend their skills with the advancement in the technological factor so that they may effectively render service within retail firm.
- Managing change: Another recommendation for prevailing out of the issues in the newly target market is that HR manager must engage in activities related with managing change so that issues or problem may not arises within the retail firm (Ratna and Singh, 2013). The workforce within the Japanese market is highly skilled therefore it is essential for the manager to manage change within the retail firm they may not adapt the standardization approach within the new market. They must ensure adopting the methods and ways that are present in the new market so that it may easily enhance their productivity as well as level of profit.
Through completing the research it has been sum up that in the present context globalization plays significant role through which business can easily expand their activities in the international market. Along with this, it also supports the company in attaining higher profit margins that support them to be succeeding in the competitive marketplace. Along with this, report also focuses on assessing the business environment of newly target market so that HR manager can easily understand the feasibility or potentiality of market so that M&S can easily expand their activities in the targeted market. The assessment of business environment can be easily measured through implementing the model such as PESTLE analysis that support the manager in understanding the external environment in which the newly firm would operates their activities and operation. Along with this, HR manager would also evaluate the different HRM functions that could be adopted by them for engaging in the performance management it mainly include functions associated with recruitment and selection, training and development, performance management systems as well as compensation and benefit etc. lastly, it would also recommend certain actions that HR manager would execute within the new environment so that may easily manage or overcome the issues related with the human capital management.
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