STRATEGIC HUMAN CAPITAL MANAGEMENT 2
Strategic Human Capital Management
Colorado Technical University
May 8, 2022
AGC has experienced problems that can be attributed to the organizational culture and the human resource management practices. The first problem is the decline in the profits. Although the company has established its operations in different continents, it is unable to achieve better performance. The second problem the company is facing is the poor human resource management. This is caused by the lack of understanding and establishment of the time that is required to enhance the employee training. There is also increased competition in the labor market because the company establishes its operations in industrial parks. There are poor policies on the training requirements of the employees as well as lack of motivation and performance measures to keep the employees motivated and willing to continue to work with the organization. The company also faces problems with the environment of operations where there are issues such as political and regulatory issues affecting the host countries and hence the performance of the company. These are issues that were diagnosed by the financial performance of the company. Irrespective of the implementation of various strategies, the company has been performing poorly financially.
Root-Causes of the Problems
The failure of the company to perform well in different environments is caused by various issues. First, the company considers the leadership of the country in terms of the market and the availability of the raw materials and labor. It however, does not study the environment to where the subsidiary is being set to determine the cultural sensitivity and the effects of the culture on the organization. As a result, the company sets up their operations in countries that do not bring competitive advantages to its performance. The establishment of the subsidiaries also lacked the organizational culture of the headquarters because they are set up to increase distribution of the products in different parts of the world. The problems are also caused by lack of proper employee management practices (AlManei et al., 2018). The company lacked proper measures to ensure the employees were thoroughly trained in all aspects of the company for effective performance. The rewards and salaries of the company needs to be competitive especially because they establish their operations in the parks. The management of the employees using the employees from the headquarters will result to poor motivation of the employees. This is because the locals will feel that they are less valued and the company cannot trust their skills. Thus, the approach will affect employee morale and increase turnover rate.
AGC needs to take the right measures to make a turnaround in its performance and increase its standings in the industry. The first intervention is to ensure there are metrics that are used to analyze the financial efficiency of the in management of human resources. This includes the management of the costs of new hires, training costs, and relocation costs. The company should settle for the options of employees that increase performance and enhance competitiveness in the industry. The second intervention is the carrying out of feasibility studies to determine the likelihood of the company to succeed in the new environment based on the available economic and political factors (Huselid, 2018). The fact that the company has ignored this aspect has led to establishment of operations in areas where there are no competitive advantages. The company also needs to standardize the policies on host country operations and the role of the host due to cultural differences in the regions of operations. It is important to have an evaluation of the political, economic, legal, and cultural environment before establishment of operations.
The evaluation process is meant to determine whether the established measures are effective in enhancing the performance of the organization. Thus, using scorecards and dashboards, it is possible to determine the human resource training and performance. It will indicate the changes in training and appraisal over time. The second evaluation is to carry out the cost-benefit analysis of the initiatives and programs on human resources (Calzavara et al., 2020). This is a method that includes the determination of the costs incurred in training the employees and the income generated after these employees have the right skills at hand. The third evaluation is the benchmark analysis and measurements using the outside organizations. It is possible to have better performance by having the right analysis of the other companies and how they manage different situations in order to implement the same in the company.
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Calzavara, M., Battini, D., Bogataj, D., Sgarbossa, F., & Zennaro, I. (2020). Ageing workforce management in manufacturing systems: state of the art and future research agenda.Â International Journal of Production Research,Â 58(3), 729-747. https://www.tandfonline.com/doi/full/10.1080/00207543.2019.1600759
Huselid, M. A. (2018). The science and practice of workforce analytics: Introduction to the HRM special issue.Â Human Resource Management,Â 57(3), 679-684. https://onlinelibrary.wiley.com/doi/abs/10.1002/hrm.21916