Solving the Labor Dilemma in a Joint Venture in Japan Assignment

Solving the Labor Dilemma in a Joint Venture in Japan Assignment Words: 1452

FDI is seen as a major contributor to global growth and development spreading the benefits of capital, technology, management expertise, jobs, and wealth to just about every corner of the world. ” (Daniels, et al, 2009, p. 189) It is because of Johnsco’s desire to expand into the international marketplace through investment in a electronics plant in Japan that I have carefully examined the issues John has brought to my attention and report on below relative to critical staffing issues being faced.

While it is a relatively small organization at this point in time, it is none-the-less an organization and as such it appears to have had no HRM (human resource management) plans or strategies in place to address its expansion into Japan. “An HR department is typically created when the number of employees reaches 200-500” (Ivancevich, 2010, p. 14), Johnsco has 300 employees currently and with the expansion into the Japanese marketplace this number will obviously increase. “The HRM strategies must reflect clearly the organization’s strategies regarding people, profit, and overall effectiveness”. Ivancevich, 2010, p. 8) Johnsco’s staffing problems are a true indication that recruitment has not been a primary focus of the company in this venture and it is also apparent that not enough research had taken place prior to signing the agreement to expand overseas. ” The importance of recruiting, selection, training, developing, rewarding, compensating, and motivating the workforce is recognized and practiced by managers in every unit and functional area of an institution. ” (Ivancevich, 2010, p. ) It is possible that there have been current changes in the environment such as shifts in the composition, education, and attitudes that have caused this critical labor shortage but putting an effective HR department in place will help alleviate these problems in the future for both the Stateside operation as well as the overseas operation. (Ivancevich, 2010, p. 9) Three identifiable issues that are readily apparent are the aging Japanese labor force, the decreasing number of semiskilled young workers due to the rise in youth receiving college educations, and strict laws against foreign workers.

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Japanese culture encourages workers to remain with a single firm until retirement; this will no doubt limit the number of available “older” workers Johnsco could potentially hire. Johnsco could persuade the union and its joint venture partner to help address the current and future staffing issues by using the following concept to address the employment issues being experienced with the Japanese venture. “Before establishing operations in a different country, one important task for the global HR manager is to research the local labor relations climate. ” (Ivancevich, 2010, p. 12) With this in mind the ARDM (A = acquiring, R = rewarding, D = developing, and M = maintaining and protecting) human resource management model can be used to help Johnsco see the whole picture or parts of the picture. (Ivancevich, 2010, p. 31) The ARDM “model emphasizes some of the major external and internal environmental influences that directly and indirectly affect the match between HRM activities and people. ” (Ivancevich, 2010, p. 31) Johnsco managers will have to observe “Federal regulations which influence HRM activities, policies, and programs” (Ivancevich, 2010, p. 3) as well as union issues which operate within Johnsco currently, as many of the laws affecting employee relations and treatment carryover into Japan. One such example is the Civil Rights Act of 1991 which prohibits discrimination on the basis of sex, race, religion, color, and national origin. The Civil Rights Act of 1991 applies to American corporations’ overseas operations. (Ivancevich, 2010, p. 109) Besides governmental regulations another hurdle that Johnsco will have to jump is the cultural mindset in Japan regarding women.

If Johnsco is going to be able to effectively mitigate its U. S. legal obligations it must understand the culture in Japan which tends towards the masculinity perspective with regard to national culture. This could have a negative impact on Johnsco’s ability to accurately represent women in the workforce particularly those who may be eligible for promotion to management levels. “Masculine cultures have strict sex roles; Japan might tend to be less supportive of efforts to integrate women into upper-level management. Ivancevich, 2010, p. 97) Another issue surrounding Johnsco’s thoughts on relying heavily on the female workforce, apparently willing to work long hours for the employer, is Article 133 of the Japanese Labor Standard; “in its consideration for working women with children addressed the need to limit the amount of overtime they would be required to work. In this case, the standards for limits on the extension of working hours for one year shall not exceed 150 hours. ” (Japanese Labor Standards Act 1947, p. ) This limitation of how many hours a woman can work could impact Johnsco’s anticipated production capacity. My recommendation would be for Johnsco to outsource the HR function to a firm in Tokyo to assist with the current staffing problem, onboarding of new employees and any expatriate managers. The HR firm could also help Johnsco better understand any government regulations or restrictions and culture of the Japanese society as well as its business environment. “A study of 1,700 organizations estimated that 53 percent planned to outsource some HRM acivities. ” (Ivancevich, 2010, p. 4) I would recommend that the HR firm immediately begin working with Johnsco’s management team, union representative, and joint venture representative in order to formulate a plan to address local union concerns regarding promotional opportunities for U. S. workers overseas and to begin implementing the ARDM model process locally in Japan to attract and hire qualified host country employees. The HR firm could develop a plan to help Johnsco “focus on recruitment efforts and write ads in ways that are consistent with local custom and jargon so there are no misunderstandings. (Ivancevich, 2010, p. 108) “The distinguishing feature of today’s successful organizations is the quality of the people they employ – they are the single most sustainable source of competitive advantage. ” (Worman, D. 2005) Since “a union is an organization that represents the interests of employees on such issues as working conditions, wages, and salaries, fringe benefits, employees’ right, grievances processes, and work hours” (Ivancevich, 2010, p. 4) Johnsco’s current union representatives should work hand in hand with Johnsco managers and joint venture partners to ensure Johnsco’s successful integration into the Japanese market. While the union has made specific demands relative to promotional opportunities, Johnsco management and HR department should work with union officials to help develop a plan to recognize current employees who would qualify for these new management opportunities in the overseas plant.

An expatriate program for qualified existing staff, whether they currently hold the position of manager or are promotable to that position, should be implemented. “Traditionally, an expatriate manager is a manager who is on a foreign assignment from the corporation’s home nation. ” (Ivancevich, 2010, p. 99) Johnsco should initially prepare and assign two key people to assist in starting up the overseas operation at lease long enough for a successful transition to occur. (Ivancevich, 2010, p. 11) Initial use of expatriates will help Johnsco alleviate concerns that host country nationals will not adopt the parent company’s culture and management system, levels of commitment to the organization, lack of expertise, and concern about how effective communication will be between the host and home offices moving forward. (Ivancevich, 2010, p. 107) It will be very important for the union to recognize that if current employees are looking to staff open positions in Japan, they must be willing to attend expatriate cross-cultural training for themselves and their families.

Language, religion, customs and general cultural beliefs should be part of the training program regardless of host or parent country national personnel. At transition, host country nationals who have also received this cross-cultural training can assume operations. One reason for using host country nationals in the long term is that they “have distinct advantages over expatriates in terms of cultural sensitivity and understanding local employees’ motivations and needs”. (Ivancevich, 2010, p. 07) In conclusion, since many of these issues were overlooked initially when Johnsco was approached about expanding it is obvious to see in hindsight that expanding your operation overseas can and will be a complicated endeavor. By addressing processes initially overlooked through use of an outsourced HR department in Japan, and implementing one at the U. S. plant; I think Johnsco can overcome its staffing issues completely and will begin to attract qualified employees who will, at least in Japan, stick with the company until retirement.

This is good for Johnsco but also requires that Johnsco evaluate its current retirement plan with union officials to ensure these comply with Japanese labor law standards. References: Daniels, J. , Radebaugh, L. , & Sullivan, D. (2009) International Business: environments and operations, 12th Edition, New Jersey: Pearson Education Dianah Worman, “Is there a business case for diversity?. ” Personnel Today (May 17, 2005): 27. General OneFile. Gale. Empire State College SUNY. 5 Feb. 2008 Ivanevich, J. , (2010): Human Resource Management 11th ed. McGraw-Hill Companies, NY, NY Japanese Labor Standards Act (1947), page 5

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