A

PROJECT
ON
JOB SATISFACTION OF EMPLOYEES

Under The Guidance of:

Mr. SURJEET

Faculty

SCMIT, SIKAR
Submitted by:

PARVEEN PARASAR

Enrollment No. 07061107085

MBA (HRM)
Remarks of Evaluator

Approved/ Disapproved Approved/Disapproved

(1 Evaluation) (II Evaluation)

Session:-2007-09
Specialization HRM




Directorate of Distance Education
Guru Jambeshwar University of Science & Technology
Hisar - 125001



DECLARATION


I hereby declare, the project work entitled A STUDY ON JOB SATISFACTION IN
CHOLAMANDALAM MS GENERAL INSURANCE LIMITED, CHENNAI for partial
fulfillment of the requirements for the award of the degree of MASTER OF BUSINESS
ADMINISTRATION, as a record of original work done by me under the supervision and
guidance of Mr. SURJEET KUMAR, SCMIT, GJU university, HISAR. This project work has
not formed the basis for the award of any Degree /Diploma/Associateship/Fellowship of similar
titles to any candidate of any university.







Place: Signature of the student
Date:










ACKNOWLEDGEMENT

I express my heart felt thanks to my mentor Mrs. Preeti Suman Mishra for her valuable
guidance, supervision and encouragement. Without her help, this study would not have seen the
light of the day.

I am also grateful to the college for assisting us with the resources required in the preparation of
a report.

Last but not the least, I would like to thank all the members of NIILM-CMS who extended their
whole hearted support to me during my work on this report because without their valuable co-
ordination it would not have been possible.


















TABLE OF CONTENTS

Executive summary
Introduction to the topic
HRD challenges
Effective criteria for HRM activities
Literature review
Characteristics of HRM
HRD in MNCs
Training & Development
International Context
Business & Domestic business compared
Profile of some well known MNCs
MC DONALDS
AMERICAN EXPRESS
HONDA
Analysis
Conclusion
Some constraints in HRD
Recommendations
Annexure
Bibliography









EXECUTIVE SUMMARY

Competitiveness demands a diverse workforce, and up-to-date skills. The free market belief in
buying in skills has proven to be inadequate, even in times of high unemployment. HRD allows
people managers to be proactive, focusing on employees as investments for the organizations.
One of the great strategic contributions of HRM lies in the planning of skills availability in
advance of need. Development programmers involve more than training. They began with the
induction and integration of new employees.

Development also involves the socialization of employees to fit the cultural requirements of the
company. A much-publicized modern approach places development within the learning
organization. HRD focuses strongly on management development. Career plans, performance
objective-setting and training programmes are more often directed at managers than lower-lever
employees. With the integration of training activities into human resource development
programs, trainers are particularly concerned with the merits of formal as opposed to experiential
training, cost-effectiveness and quality.

Organizations exist to achieve goals. Goals are only met when individual employees efforts
matches with policy of the organization and thus bringing out success and effectiveness. The
assessment of how successful employees have been at meeting their individual goals therefore
becomes a critical part of HRM and therefore performance appraisal also plays a major role in
the development of employees.

This report talks about the HRD practices in various organizations both private undertaking and
public sector undertaking. It represents a working paper showcasing insights of the HRD IN
MNCs and importance of HRD.



INTRODUCTION
Pranoy Das had been a star performer in India. But, on his overseas posting, he has to grapple
with the quirks of a multicultural milieu.
Abraham Titus was the best turnaround man a firm could hire. Yet given the contradictory goals
of his superiors, he was unable ton navigate change at ORTRAX.
And lots more/
The above shows the importance of HRD in an organization.
In the simplest of words, HRD is the process of helping people to acquire competencies. In and
organizational context, HRD may be seen as a process by which the employees of an
organization are helped in a continuous and planned way to acquire competencies to achieve
their goals.
All people need competencies. We can broadly club these competencies into four, namely:
Knowledge
Attitudes
Values
Skills
HRD since its inception has not been able to stabilize itself i.e. since last 25 yeas HRD is
continuously expanding and the rnage of the functions this can accommodate is nearly infinite.
Selection practices
Appraisal
Training and development
Career planning
Participation
Communication
Compensation
Decision making
And lots more to go
HRD will soon form the base of the organization.
The importance of HRD as a realized from the fact that human resource is the only resource
which has the will to do component in addition to the ability to do component which other
resources also possess. This realization has given a pivotal place to human resource development
in the overall management of organizations.
The need of HRD today in the context of extremely competitive business environment is
effectiveness. Management is not classified into good and bad as was the practice earlier but is
now classified as effective or ineffective.
Organisation normally strive to achieve the following:
Mission execution
Efficiency/profitability
Growth
Image
Survival/continuity
And all these can best be achieved by HRD.




















HRD CHALLENGES
HR activity HRD Challenges

Decision
making
Conflicts among diverse constituent groups, complexity of decision
processes.

Communication Interpersonal problems due to geographical dispersion and cultural differences

Staffing Organization may demand staffing policies contrary to maximizing profits.

Compensation Perceived and real compensation differences.

Career planning Perceptions regarding value of overseas assignments, difficulti8es in reentry

Performance
management
Differences in standards, difficulties in measuring performance across
cultures.

Training Special training for functioning in organisational structure.

Leadership Provide effective and visionary leadership to modify or change organisational
culture by focusing on attitudes, skills, knowledge, beliefs, perceptions and
behaviour of employees

Organization
culture
Review of organizational structure and HR systems for their utility by making
the structure to allow for information flow. Quick response, decentralization
(power sharing) accountability etc.

Effective Criteria for HRD Activities

The Effectiveness criteria for HRD activities in the changing characteristic of work place has to
be really efficient in order to comply with the business imperatives of the organization.
Developing the specific criteria which define effectiveness for HRD activities is one of the most
difficult problems which must be addressed by HRD professionals and practicing managers.
Effective performance at the individual or aggregated level can be defined according to six
criteria. The most effective employees or work units are those providing the highest possible
quantity and quality of work at the lowest cost and in the most timely fashion, with a minimum
of supervision and with a maximum of positive impact on coworkers , organizational units, and
the client/customer population. Another conceptualization breaks these six down into simply
effectiveness and efficiency, with effectiveness defined as meeting or exceeding customer
requirements and efficiency defined as meeting those requirements at the lowest cost possible.
HRD professionals and practicing managers spend considerable time in developing,
administering, and maintaining performance management systems which attempt to measure and
improve effectiveness and efficiency.
While the relative weights to be applied to the six criteria should be directly linked to
organizational objectives such as increased sales, reduced costs, and of course customer
satisfaction, they rarely are. Most organizations have difficulty even measuring overall
performance in a reliable manner, and few systematically relate individual performance to
performance aggregated to the unit or corporate level. Organizations rarely get down to specifics
about all six criteria and, most important, about their relationships to the objectives of the
organization or measures of either internal or external customer satisfaction. When reliable and
valid measurements of these criteria are taken, they are rarely related to either internal or extrnal
customer satisfaction except at the most superficial level. As stated above, there is a growing
realization that such linkage is vital to competitive advantage.



















LITERATURE REVIEW
The HR department's responsibilities have gradually become broader and more strategic since
the days when business people began including "personnel departments" in their organization
charts. In the earliest firms, "personnel" first took
over hiring and firing from supervisors, ran the payroll department, and administered benefit
plans. As technology in areas like testing and interviewing began to emerge, the personnel
department began to play an expanded role in employee selection, training, and promotion. The
emergence of union legislation in the 1930s added "protecting the firm in its interaction with
unions" to the personnel department's responsibilities. Then, as new equal employment
legislation created the potential for discrimination-related lawsuits and penalties, personnel's
advice and oversight became even more indispensable.
Today, the globalization of the world economy and several other trends are again triggering
changes in how companies organize, manage, and use their personnel/HR departments.
Human Resource Management (HRM) maybe defined as a set of policies, practices and
programmes designed to maximise both personal and organisational goals. It is the process of
binding people and organisations together so that the objectives of each are achieved. According
to Flippo, human resource management is "the planning, organising, directing and controlling of
the procurement, development, compensation, integration, maintenance and reproduction of
human resources to the end that individual, organisational and societal objectives are
accomplished." According to National Institute of Personnel Management of India, "human
resource management is that part of management concerned with people at work and with their
relationships within the organisation. It seeks to bring together men and women who make up an
enterprise, enabling each to make his own best contribution to its success both as an individual
and as a member of a working group."
Scott and others have defined as follows: "Human resource management is that branch of
management which is responsible on a staff basis for concentrating on those aspects of
relationship of management to employees and employees to employees and with the
development of the individual and the group. The objective is to attain maximum individual
development, desirable working relationship between employers and employees and employees
and employees, and effective moulding of human resources as contrasted with physical
resources."
In the words of Jucius, "human resource management may be defined as that field of
management which has to do with planning, organising and controlling the functions of
procuring, developing, maintaining and utilising a labour force, such that the (a) objectives for
which the company is established are attained economically and effectively; (b) objectives of all
levels of human resources are served to the highest possible degree; and (c) objectives of society
are duly coincided and served."
Human resource management is known by different names, e.g., personnel management,
manpower management, personnel administration, staff management, etc.
Characteristics of Human Resource Management
On the basis of the definitions given above, the following features of human resource
management can be identified:
Comprehensive Function. Human resource management is concerned with managing people at
work. It covers all types of people at all levels in the organisation. It applies to workers,
supervisors, officers, managers and other types of personnel.
People-oriented. Human resource management is concerned with employees as individuals as
well as groups. It is the task of dealing with human relationships within an organisation. It is the
process of achieving the best fit between individuals, jobs, organisations and the environment. It
is the process of bringing people and organisations together so that the goals of each are met.
Action-oriented. Human resource management focuses on action rather than on record-keeping
or procedures. It stresses the solution of human resource problems to achieve both organisational
objectives and employees' personal goals.
Individual-oriented. Under human resource management, every employee is considered as an
individual so as to provide services and programmes to facilitate employee satisfaction and
growth.
Development-oriented. Human resource management is concerned with developing potential of
employees so that they get maximum satisfaction from their work and give their best efforts to
the organisation. It takes into account the personality, interests, opportunities and capacities of
employees for this purpose. It seeks to help the employees to realise their full potential.
Pervasive Function. Human resource management is inherent in all organisations and at all
levels. It is not confined to industry alone. It is equally useful and necessary in government,
armed forces, sports organisations and the like. It permeates all the functional areas, e.g.,
production, marketing, finance, research, etc. Recruitment, selection, development and utilisation
of people is an integral part of any organised effort. Each and every manager is involved with
human resource function. In big organisations, there is generally a human resource/personnel
department. But this department only provides expert staff, advice and assistance concerning
personnel matters. The authority to take decisions about these matters lies with the operating
executives.
Human resource management is not something which can be turned over to a human resource
department. It is the responsibility of each and every manager. When a human resource
department is created, other managers are not relieved of this responsibility. This department
only advises and assists line managers. According to Scott et al "human resource
management is a responsibility of all those who manage people as well as being a description
of the work of those who are employed as specialists. It is that part of management which is
concerned with people at work and with their relationships within an enterprise." Human
resource management is a staff function but a line responsibility.
Continuous Function. Management of human resources is an ongoing or never-ending exercise
rather than a 'one shot' function. In the words of Terry, "it cannot be turned on and off like water
from a faucet; it cannot be practised only one hour each day or one day a week. Human resource
management requires a constant alertness and awareness of human relations and their importance
in everyday operations."
Future-oriented. Human resource management is concerned with helping an organisation achieve
its objectives in the future by providing for competent and well-motivated employees. It attempts
to obtain willing cooperation of people for the attainment of the desired objectives.
Challenging Function. Managing of human resources is a challenging job due to the dynamic
nature of people. People have sentiments and emotions so they cannot be treated like machines.
It is, therefore, necessary to handle them tactfully. It is not simply managing people but
administering a social system.
Science as well as Art. HRM is a science as it contains an organised body of knowledge
consisting of principles and techniques. It is also an art because it involves application of
theoretical knowledge to the problems of human resources. In fact, handling people is one of the
most creative arts.
Staff Function. The function of human resource management is advisory in nature. Human
resource managers do not manufacture or sell goods but they do contribute to the success and
growth of an organisation by advising the operating departments on human resource matters.
Like the director of a movie, their performance can be judged from the success of the total
organisation.
Young Discipline. Human resource management is of comparatively recent origin. It started in
the last part of the 19th century. It is relatively a new specialised area as compared to
manufacturing and marketing.
Interdisciplinary. Human resource management involves application of knowledge drawn from
several disciplines like sociology, anthropology, psychology, economics, etc. In order to deal
with human problems effectively, a manager must depend upon such knowledge. In modern
times, human resource management has become a highly specialised job.
Nervous System. Human resource management is similar to the nervous system in the human
body. The nervous system is not an adjunct to the body but is inherent in the whole body and
intimately associated with its every movement. Similarly, human resource management is not an
extraneous element to the organisation structure. Rather it lies embedded in the structure, is
inherent in its functioning and an integral part of the process of management itself. Human
resource management cannot be separated from the basic management function.
Every organisation has some objectives and every part of it should contribute directly or
indirectly to the attainment of desired objectives. Objectives determine the character of an
organisation and serve as the basis for voluntary cooperation and coordination among
employees. Objectives also provide benchmarks or standards of evaluating performance.
Objectives of human resource management are derived from the basic objectives of an
organisation. In order to achieve organisational objectives integration of employer's interest and
employee interests is necessary. In this light, the objectives of human resource management may
be summarised as follows:
To help the organisation attain its goals by providing well-trained and well-motivated
employees.
To employ the skills and knowledge of employees efficiently and effectively, i.e., to utilise
human resources effectively.
To enhance job satisfaction and self-actualisation of employees by encouraging and assisting
every employee to realise his/her full potential.
Human resource management is the central subsystem of an organisation as can be seen from
given Fig. below.

HUMAN RESOURCE DEVELOPMENT
"People" is the most important and valuable resource every organisation or institution has in the
form of its employees. Dynamic people can build dynamic organisations. Effective employees
can contribute to the effectiveness of the organisation. Therefore, organisation should
continuously ensure that the dynamism, competency, motivation and effectiveness of the
employees remain at high levels.
HRD has multiple goals. These include employee competency development, Employees
motivation development and organisational climate development. Employees require a variety of
competencies (Knowledge, attitudes, skills in technical areas, managerial areas , behavioural and
human relations areas and conceptual areas) to perform different tasks or functions required by
their jobs.
HRD aims at constantly assessing the competency requirements of different individuals to
perform the jobs assigned to them, effectively, and provide opportunities for developing these
competencies.
HRD also aims at preparing people for performing roles/jobs/functions which they may be
required to perform in future as they go up on the organisational hierarchy or as the organisation
takes up new tasks through diversification ,expansion , modernisation , economization etc.
Another aim of HRD is to identify competency gaps of employees to perform the
role/job/task/functions effectively and create conditions to help employees bridge these gaps
through development.
In sum HRD goals include:-
Develop the individual to realise his potential as an individual to the maximum extent ;
Develop the individuals capabilities to perform his present job better :
Develop the capabilities to handle future likely roles :
Develop and maintain a high motivation level of the employees :
Strengthen superior-subordinate relationship ;
Promote inter-team collaboration ; and
Promote climate development and organisational health development.
HRD BLOCK-TRAINING & DEVELOPMENT

FORM THE BASE BLOCK











HR holds a key position in any scheme of development because the development process is the
sum total of our productive efforts, guided, managed and executed through our human resource.
India has realised the importance or HRD and vigorous efforts are on to break the shackles of all
economic and social problems through the application of the HRD concept and practices.
Today, HR is the only factor that can facilitate effective use of science and technology. If India
needs to develop, she has to attain the goal of moulding HR in the right perspective. HRD helps
in incorporating high levels of skills and knowledge. This not only leads to improvement ' of the
quality of the product but also reduction of cost of production.
HRD approach will assist in evolving policies which will be useful in generating job satisfaction,
career development opportunities and in alleviating the sense of frustrations among the human
beings. Many organisations in India have started implementing the HRD programmes. The
objectives HRD cannot be achieved without an effective HRM system. Every HRD system
developed by an organisation should be based on the following elements of HRM
Evolving a system of Human Resources Planning.
Selection of the right people for the right job at right time.
Imparting proper training based on the principle of learning, teaching basic work skills,
motion study and training to foremen.
Evolving suitable compensation plan
Evolving a good performance appraisal system.
Organisations like TELCO, L&T and HLL have adopted effective HRD procedures.
Organisations are made up of people and function through people. Without people organisations
cannot exist. The resources of men, money, materials and machinery are collected, coordinated
and utilised through people. These resources by themselves cannot fulfil the objectives of an
organisation. They need to be united into a team. It is through the combined efforts of people that
material and monetary resources are effectively utilised for the attainment of common objectives.
Without united human efforts, no organisation can achieve its goals. All the activities of an
organisation are initiated and completed by the persons who make up the organisation.
Therefore, people are the most significant resource of any organisation. This resource is called
human resource and it is the most important factor of production. According to L.F. Urwick,
"business houses are made or broken in the long run not by markets or capital, patents or
equipment but by men." Of all the resources manpower is the only resource which does not
depreciate, with the passage of time.
From the national viewpoint, human resources may be defined as "the knowledge, skills, creative
abilities, talents and aptitudes obtained in the population." From the viewpoint of an
organisation, human resources represent the people at work. They are the sum-total of the
inherent abilities, acquired knowledge and skills as exemplified in the talents and aptitudes of its
employees. According to Jucius, human resources or human factors refer to "a whole consisting
of inter-related, interdependent and interacting physiological, psychological, sociological and
ethical components."
Thus, human resources represent the quantitative and qualitative measurement of the workforce
required in an organisation.
Human resources are characterised by the following features:
Human resources of an organisation are the product of their biological inheritance and
interactions with the environment. Family relationships, religious influences, caste or racial
background, educational accomplishments and organisational climate influence the attitudes,
behaviour and performance of human beings.
Human resources are heterogeneous. They consist of a large number of individuals each having a
unique personality, different needs, attitudes and values. Each has his own physical and
psychological traits. Most of the problems of an organisation are people-related problems. These
problems arise from the mistaken belief that people are alike and they can be treated identically.
In order to make effective use of its human resources, an organisation must recognise and pay
attention to differences between individuals so that each person can maximise his/her potential.
Human resources are dynamic and behave differently. They react to the same situation in quite
different ways. Even the same individual may behave differently at two different points of time.
It is, therefore, very difficult to predict human behaviour.
Human resources are the most important element in an organisation. The effective utilisation of
all other resources depends upon the quality of human resources.
Human resources have the greatest potential to develop and grow provided the right climate is
provided to them. An organisation can survive and grow if it has the right people at the right time
working at right jobs.
The term human resources is wider than the term personnel. Human resources include all the
dynamic components of all the people at all levels in the organisation whereas personnel means
the employees working in the organisation.
INTERNATIONAL CONTEXT
Business and the workforce in organizations are becoming increasingly global and diverse.
These developments affect our lies as workers and managers and pose numerous challenges. In
some organizations the transformation is due to changing demographics among the general
population of society whereas in other situations the increasing diversity is caused by the
globalization of an organizations products, services, suppliers, customers, and employees.
Regardless of the cause of the diversity in an organization, the result is that management must
deal with the diversity and develop ways to manage it.
More and more organizations are developing and expanding their internal and external programs
in the areas of diversity, and most are finding that doing so makes good business sense.
Organizations such as Procter & Gamble, AT&T, Dennys (Advantica), Ernst and Young, the
Anderson School at UCLA, Pitney Bowes and Pfizer are using innovative ways to utilize an
increasingly diverse workforce through various diversity initiatives, diversity roundtables,
diversity seminars, and diversity marketing to reach new employees, suppliers, and customers
that make a difference on the bottom line. It is essential that managers be aware of the different
aspects of diversity, the wide range of diversity programs in use, and the impact of diversity on
corporate performance.
The increasing diversity of the workforce is due to four trends. First, as the job market evolves
and changes from good to bad, it becomes very important to find the best workers and then
utilize them to best serve the organization, Layoffs are costly, as are recruiting and hiring new
employees. During economic downturns, companies such as Silicon Graphics struggle to make
sure that no one group of employees is disproportionately affected by layoffs, for example.
3

Second, more companies are focusing their marketing efforts on the increasing buying power in
the minority markets. A diverse, or segmented, marketing effort requires a marketing team that
represents the markets being targeted. As an example, McDonalds, number three on Fortune's list
of the fifty best companies for minorities, is diversifying what it buys as well as what it sells by
buying $3 billion a year from minority-owned firms.
4
Third, more companies are seeking to
expand their markets around the world. It takes more diverse thinking to effectively reach global
markets. Finally, companies that have sought to reach globally via expansion, acquisitions, and
mergers inevitably go through a period of consolidation to reduce duplication of efforts around
the world and to capitalize on the synergies of cross-border operations. Typically, consolidation
means that employees from around the world are thrust together in newly streamlined units,
resulting in more diverse groups. These four trends, then, are the drivers behind the increasing
diversity in the workforce.
5

What Is Workforce Diversify?
Workforce diversity is the similarities and differences in such characteristics as age, gender,
ethnic heritage, physical abilities and disabilities, race, and sexual orientation among the
employees of organizations. 3M defines its goals regarding workforce diversity as "valuing
uniqueness, while respecting differences, maximizing individual potentials, and synergizing
collective talents and experiences for the growth and success of 3M."
6
In a diverse workforce,
managers are compelled to recognize and handle the similarities and differences that exist among
the people in the organization.
Employees' conceptions of work, expectations of rewards from the organization, and practices in
relating to others are all influenced by diversity.
7
Managers of diverse work groups need to
understand how the social environment affects employees' beliefs about work, and they must
have the communication skills to develop confidence and self-esteem in members of diverse
work groups. Many people tend to stereotype others in organizations. As described in Chapter 4,
a stereotype is a generalization about a person or a group of persons based on certain
characteristics or traits. Many managers fall into the trap of stereotyping workers as being like
themselves and sharing a manager's orientation toward work, rewards, and relating to coworkers.
However, if workers do not share those views, values, and beliefs, problems can arise. A second
situation involving stereotyping occurs when managers stereotype workers according to some
particular group such as age, gender, race, ethnic origin, or other characteristic. It is often easier
for managers to group people based on easily identifiable characteristics and to treat these groups
as "different." Managers who stereotype workers based on assumptions about the characteristics
of their group tend to ignore individual differences, which leads to making rigid judgments about
others that do not take into account the specific person and the current situation.
Stereotypes can lead to the even more dangerous process of prejudice toward others. Prejudices
are judgments about others that reinforce beliefs about superiority and inferiority. They can lead
to an exaggerated assessment of the worth of one group and a diminished assessment of the
worth of others.
9
When people prejudge others, they make assumptions about the nature of the
others that may or may not be true, and they manage accordingly. In other words, people build
job descriptions, reward systems, performance appraisal systems, and management systems and
policies that fit their stereotypes.
Management systems built on stereotypes and prejudices do not meet the needs of a diverse
workforce. An incentive system may offer rewards that people do not value, job descriptions that
do not fit the jobs and the people who do them, and performance evaluation systems that
measure the wrong things. In addition, those who engage in prejudice and stereotyping fail to
recognize employees' distinctive individual talents, a situation which often leads these employees
to lose self-esteem and possibly have lower levels of job satisfaction and performance.
Stereotypes can also become self-fulfilling prophecies.
10
If we assume someone is incompetent
and treat the person as though he or she is, over time the employee may begin to share the same
belief. This can lead to reduced productivity, lower creativity, and lower morale.
The Value of Diversity
In the traditional view, the United States was seen as a "melting pot" of people from many
different countries, cultures, and backgrounds. For centuries, it was assumed that people who
were different or new to something should assimilate themselves into the existing situation.
Although equal employment opportunity and accompanying affirmative action legislation have
had significant effects on diversifying workplaces, they sometimes focused on bringing into the
workplace people from culturally different groups and fully assimilating them into the existing
organization. In organizations, however, integration proved to be difficult. People were slow to
change and usually resistant to the change. Substantive career advancement opportunities rarely
materialized for those who were "different."
The issue of workforce diversity has become increasingly more important in the last few years as
employees, managers, consultants, and the government finally realized that the composition of
the workforce affects organizational productivity. Today, instead of a melting pot, the workplace
in the United States is regarded as more of a tossed salad made up of a delightful mosaic of
different flavors, colors, and textures. Rather than trying to assimilate those who are different
into a single organizational culture, the current view holds that organizations need to celebrate
the differences and utilize the variety of talents, perspectives, and backgrounds of all employees.
Benefits of Valuing Diversity: Valuing diversity means putting an end to the assumption that
everyone who is not a member of the dominant group must assimilate. This is not easily
accomplished in most organizations. Truly valuing diversity is not merely giving lip service to an
ideal, putting up with a necessary evil, promoting a level of tolerance for those who are different,
or tapping into the latest fad. It is an opportunity to develop and utilize all of the human
resources available to the organization for the benefit of the workers as well as the organization.
Valuing diversity is not just the right thing to do for workers; it is the right thing to do for the
organization, financially and economically. One of the most important benefits of diversity is the
richness of ideas and perspectives that it makes available to the organization. Rather than relying
on one homogeneous dominant group for new ideas and alternative solutions to increasingly
complex problems, companies that value diversity have access to more perspectives of a
problem. These fresh perspectives may lead to development of new products, opening of new
markets, or improving service to existing customers.
Overall, the organization wins when it truly values diversity. A worker whom the organization
values is more creative and productive. Valued workers in diverse organizations experience less
interpersonal conflict because the employees understand each other. When employees of
different cultural groups, backgrounds, and values understand each other, they have a greater
sense of teamwork, stronger iden-tification with the team, and deeper commitment to the
organization and its goals.
Assimilation: Assimilation is the process through which members of a minority group are forced
to learn the ways of the majority group. In organizations this entails hiring people from diverse
backgrounds and attempting to mold them to fit into the existing organizational culture. One way
that companies attempt to make people fit in is by requiring that employees speak only one
language.
A primary source of diversity in organizations is the increasing globalization of organizations
and management. However, in many ways, international management is nothing new. Centuries
ago, the Roman army was forced to develop a management system to deal with its widespread
empire. Likewise, the Olympic games, the Red Cross, and many similar organizations have
international roots. From a business standpoint, however, international management is relatively
new, at least in the United States.
Specific Cultural Issues: Geert Hofstede, a Dutch researcher, studied workers and managers in
sixty countries and found that attitudes and behaviors differed significantly because of the values
and beliefs in the various countries.
The two primary dimensions that Hofstede found are the individualism / collectivism continuum
and power distance. Individualism exists to the extent that people in a culture define themselves
by referring to themselves as singular persons rather than as part of one or more groups or
organizations. At work, people from more individualistic cultures tend to be more concerned
about themselves than about their work group, individual tasks are more important than
relationships, and hiring and promotion are based on skills and rules. Collectivism, on the other
hand, is characterized by tight social frameworks in which people tend to base their identities on
the group or organization to which they belong. At work, this means that employee-employer
links are more like family relationships, relationships are more important than individuals or
tasks, and hiring and promotion are based on group membership. In the United States, a very
individualistic culture, it is important to perform better than others and to stand out from the
crowd. In Japan, a more collectivist culture, an individual tries to fit in with the group, strives for
harmony, and prefers stability.
The primary dimensions of diversity are those factors that are either inborn or exert extraordinary
influence on early socialization. These include age, race and ethnicity, gender, physical and
mental abilities, and sexual orientation. These factors make up the essence of who we are as
human beings. They define us to others, and because of how others react to them, these factors
also define us to ourselves. These characteristics are enduring aspects of our human personality,
and they sometimes present extremely complex problems to managers.
Secondary dimensions of diversity include factors that matter to us as individuals and that to
some extent define us to others but which are less permanent than primary dimensions and can
be adapted or changed. These include educational background, geographical location, income,
marital status, military experience, parental status, religious beliefs, and work experience. These
factors may influence our lives as much as the primary dimensions. Many veterans of the Persian
Gulf War and the war in Afghanistan, for example, were profoundly affected by their experience
of serving in the military. The influence of religion and spirituality, two secondary dimensions, is
becoming more commonplace at work.
The impact of secondary dimensions may differ at various times in our lives. For example,
moving to another part of the country or world may be traumatic for a parent with several
children; a person with no close ties or dependents, on the other hand, may find it exciting.
Family experiences may also influence a manager's degree of sympathy for the disruptions of
work life that sometimes occur because of personal responsibilities.
Employees enter the workforce with unique experiences and backgrounds that affect their
perspective of work rules, work expectations, and personal concerns. Although employees may
have essentially the same work hours, job description, tenure with the company, and
compensation, their reactions to the work situation may differ significantly because of
differences in these primary and secondary dimensions of diversity.
Taking advantage of diversity in organizations poses difficult challenges, but it also presents new
opportunities. Simply announcing that the organization values diversity is not enough. It requires
that management develop a multicultural organization in which employees of mixed
backgrounds, experiences, and cultures can contribute and achieve their fullest potential to
benefit both themselves and the organization. Management must plan to manage diversity
throughout the organization and work hard to implement the plan.
Workforce diversity is a function of the similarities and differences among employees in such
characteristics as age, gender, ethnic heritage, physical or mental ability or disability, race, and
sexual orientation. Managers of diverse work groups need to understand how their members'
social conditioning affects their beliefs about work and must have the communication skills to
develop confidence and self-esteem in their employees.
Stereotypes can lead to prejudice toward others; prejudice consists of judgments concerning the
superiority or inferiority of others that can lead to exaggerating the worth of one group while
disparaging the worth of others. Management systems built on stereotypes and prejudices are
inappropriate for a diverse workforce.
Employment statistics show that the future workforce will be radically different from the
workforce of today. The goal of valuing diversity is to utilize all of the differences among
workers for the benefit of the workers and the organization.
International business has rapidly become an important part of almost every manager's life and is
likely to become even more important in the future. Managers need to recognize that employees
from different backgrounds are similar in some respects and different in others.
Diversity can be categorized as having primary and secondary dimensions. The primary
dimensions of diversity are those that are either inborn or exert extraordinary influence on early
socialization; dimensions of this type are age, ethnicity, gender, physical or mental abilities, race,
and sexual orientation. Secondary dimensions of diversity include factors that are important to us
as individuals and that to some extent define us to others but which are less permanent and can
be adapted or changed: educational background, geographical location, income, marital status,
military experience, parental status, religious beliefs, and work experience.
A multicultural organization is one in which employees of different backgrounds, experiences,
and cultures can contribute and achieve their fullest potential for the benefit of both themselves
and the organization. Developing a multicultural organization is a significant step in managing a
diverse workforce and may be crucial to sustaining a competitive advantage in the marketplace.
A multicultural organization has six characteristics: pluralism, full structural integration, full
integration of informal networks, an absence of prejudice and discrimination, equal identification
with organizational goals among employees from both majority and minority groups, and low
levels of inter-group conflict.

BUSINESS AND DOMESTIC BUSINESS COMPARED
Global business, as was noted earlier, is an extension of domestic business. There are, however,
important differences as well as similarities. Business, whether global or domestic, involves
buying and selling goods and services. In most cases, profit is the driving force behind each
transaction.
Differences between domestic and international business are pronounced primarily in the areas
of currency, interest rates, inflation, taxation systems, government regulations, language, and
cultural and economic barriers.
In the matter of payments, a buyer of foreign goods must pay for them in a currency different
from that which he is accustomed to use in his own country. For example, an Indian importer of
American goods needs to make payment in dollars and not in rupees. Exchange rate fluctuations
become a problem and to insure against such fluctuations, the importer has to enter into a six-
month forward contract with a banker.
Once commodities cross a countrys border, they become subject to a different set of laws.
Quotas and licences make movement of goods difficult, creation of WTO, notwithstanding.
Businessmen selling abroad have to contend with differences in customers, institutions, and
language. Cultural factors abroad affect the kind of commodities that can be sold in foreign
countries as well as the individuals conduct and procedures in selling overseas.
A businessman operating exclusively within the domestic market faces a single pattern of short-
term interest rates, only one rate of inflation, and a single tax system. These variables are all
different for the business person engaged in global business, having operations in a number of
countries.
In international business, managerial practices need to be altered and fine-tuned to correspond
with different environmental variables.
ORGANISATIONS ENGAGED IN INTERNATIONAL BUSINESS
Organisations that engage in international business vary considerably in size and the extent to
which their business activities cross national boundaries. One special type of organisation
engaged in global business in the multinational corporation (MNC). An MNC is an organisation
that engages in production or service activities through its own affiliates in several countries,
maintains control over the policies of those affiliates, and manages from a global perspective.
With a global perspective, top managers allocate resources and coordinate activities to take the
best possible advantage of favourable business conditions throughout the world. Table 1.2 shows
the worlds largest MNCs.
Some other expressions are also coined to name enterprises engaged in global business. United
Nations Agencies call these firms as transnational corporations (TNCs), and other experts prefer
the term multinational enterprice (ME). But there is not common agreement about the choice of
either of these terms.
Multinational corporation (MNC)
The fact that companies operate in multiple countries has led some experts to adopt multinational
corporation, or MNC. This term is very popular in the business press and in textbooks. It seems
to be the most generic name to describe corporations operating around the world.
Multinational Enterprise (MNE)
Because some of the international giants are state-owned enterprises, rather than corporations,
the term multinational enterprise, or MNC, h as entered the vocabulary of international trade.
Global Corporation
This term became very popular in the 1990s. the term seems to have first been used to describe a
small number of companies whose business was conducted in dozens of perhaps more than 100
nations. Hence, Nestle has long been described as truly global because the scope of its
operations extends to more than 150 nations around the globe. The term is often applied to
companies doing business in several areas of the world (e.g., Europe, Latin America, Asia-
Pacific, and North America).
It is argued that the MNCs reign as the pre-eminent vehicle of international trade in nearing its
end. It is slowly being displaced by firms that represent a new type of international enterprise,
which is called the global corporation. The MNC operates in a number of countries and adjusts
its products and services to each. The global corporation, on the other hand, operates as if the
entire world were a single entity. Global corporations essentially sell the same things in the same
way every where. Thus, a global corporation, such as Sony, sells a standardised product
Walkman throughout the world, components of which may be made or designed in different
countries.
Political Environment
Political environment refers to the influence of the system of government and judiciary in a
nation on international business. The system of government in a nation wields considerable
impact on its business. The type and structure of government prevailing in a country decides.
Promotes, fosters, encourages, shelters, directs, and controls the business of that country. A
political system (another name for the type of government) that is stable, honest, efficient, and
dynamic and which ensures political participation to the people, and assures personal security to
the citizens, is a primary factor for economic development. The economies of today owe their
success to a large extent to the political system they richly enjoyed There is today.
Two basic political systems are in existence all over the world, namely, democracy and
totalitarianism. In its pure sense, democracy refers to a political arrangement in which the
supreme power is vested in the people. Democracy may manifest itself in any of two
fundamental manners.
Three institutions
The political system under democratic dispensation comprises three vital institutions: legislature,
executive or government, and judiciary.
Legislature: Of the three, legislature is the most powerful political institution vested with such
powers as policy making, law making, budget approving, executive control, and acting as a
mirror of public opinion.
The influence of legislature on business is considerable. It decides such vital aspects as the type
of business activities the country should have, who should own them, what should be their size
of operations, what should happen to their earnings, and other related factors of vital importance
and economics for international business.
Executive or Government: Often referred to as the, State, it is the centre of political authority
having the power to govern those it serves.
What are government responsibilities to business? What are business responsibilities to
government?
Judiciary: The third political institution is the judiciary. The judiciary determines the manner in
which the work of the executive has been fulfilled. It sees to it that the exercise of executive
authority conforms to the general rules laid down by the legislature. It may declare that the
particular order issued rules laid down by the legislature. It settles the relationship between
private citizens on the one hand and between citizens and government upon the other where
these give rise to problems that do not admit to a solution by the government.
Political environment and international business
The political environment prevalent in a country has a significant impact on international
business. The government of the land may impose trade barriers on e x ports and imports and on
foreign investments in the name of self sufficiency and national sovereignty.
International business makes use of the concept known as political risk while analyzing the
political environment. Political risk refers to the risk of loss of assets earning power or
managerial control due to events or actions that are politically motivated. The immediate concern
of political risk with regard to developing countries is in terms of national and expropriation of
assets but the fear is existing in industrialized countries too.
Assessment of political risk is most important while a firm contemplates its initial entry into a
particular country. The following check list is highly useful for the purpose.
what is the political system of the country?
Under what type of economic system does the country operate?
Is the particular industry in the public or private sector?
If it is in the public sector does the government permit entry of an MNC in the same industry?
If it is in the private sector are there chances of its nationalization?
Does the government view foreign capital as being in competition or in partnership with public
or local private enterprises?
In what ways does the government control the nature and extent of private enterprise?
How much of a contribution is the private sector expected to make in helping the government
formulate overall economic objectives?
Areas of concern for MNCS
While it is useful to understand the different legal systems prevailing across the globe and the
principles of international law what concerns the manager of an MNC most are the laws relating
to intellectual property rights product safety laws contract laws and laws relating to monopolies
and restrictive trade practices antitrust law multinational bankruptcy and tradeoffs between
business in the host country and national security or foreign policy issues in the home country of
particular concern is the law relating to intellectual property.
Intellectual property refers to property such as computer software a screenplay a music score or
the chemical formula for a new drug that is the product of intellectual activity. It is possible to
establish ownership rights over intellectual property through statutory and non statutory means.
Economic environment
Next to the political environment it is the economic which exerts considerable impact on
international business. Economic environment is the sum total of several economic factors such
as the basic economic system growth strategy industry agriculture infrastructure national and per
capita incomes GDP exports and imports balance of payment position population, literacy and
longevity of citizens. All these factors are but together in different ways in different countries to
effect the production distribution consumption of goods and services to satisfy human wants and
needs. How efficient is the interplay of all these components determines the favourableness or
otherwise of the economic environment or the development of the economy itself.
Technology and economy
Developments in technology also has significant economic implications.
Increased productivity
The most fundamental effect of technology is greater productivity in terms of both quality and
quantity. This is the main reason why technology at all levels is adopted. In a hospital the
objective may be qualitative such as maintaining life with electronic monitoring equipment
regardless of costs. In a factory the objective may be quantitative in terms of more production at
less cost.
As a result of productivity improvement real wages of employees tend to rise and prices of some
products decline which spreads the beneficial economic effects of technology throughout the
whole social system. The result is that employees and citizens are motivated to want more
technological advancement thereby putting major responsibilities on business to introduce it with
the due concern for its social and environmental effects.
Need to spend on R & D
Research and development (R & D) assumes considerable relevance in organizations as
technology advances. In this context firms are required to consider decide and take action on at
least seven issues. First is the allocation of resources to R & D. a firm must make the required
resources available for effective R & D. a companys R & D intensity (its spending on R & D as
a percentage of sales revenue) is a principle means of gaining market share in global
competition. Besides consistence in resource allocation to R & D across lines of business
improves corporate performance by enabling the firm to better develop corporate performance by
enabling the firm to better develop synergies among product lines and business units.
Brand decisions
An important issue related to international strategy is the use of brands. Firms often like to
standardize the brand name of product. A firm that succeeds in this attempt can reduce its
packaging design and advertising costs. A good brand name can evoke feelings of trust
confidence security, strength and many other desirable characteristics. Contains Indias most
trusted brands.
In the meanwhile brand is understood as a name term design symbol or any other feature
identifies one firms goods or services as distinct from those of other firms. The legal term for
brand is trademark.
The third P in the international marketing mix is promotion. Promotion embraces all efforts by
an international business to enhance the desirability of its products among potential buyers.
While many promotional activities are specifically targeted at buyers successful firm recognise
that they must also communicate with their distributors and the general public to ensure that the
public is favourably disposed towards the firm and its products. As promotion involves
communication with the audiences in the host country it is the most culture bound of the four Ps.
Therefore a firm must take special care to ensure that the message given to host country public is
infect the message the firm intended to send. In this way international marketing managers must
effectively blend and utilize the four elements of promotion mix advertising personal selling
sales promotion and public relations to entice potential customers to buy the firms product.
Advertising
The first element of promotion mix is advertising. Advertising is any paid form of non personal
presentation and promotion of goods or services by an identified sponsor.
Advertising in international marketing needs to function under several constraints such as legal
language and cultural.
Language considerations
Languages is one of the major barriers to effective communication through advertising. The
problem involves different languages of different countries different languages or dialects within
one country and subtler problems of linguistic nauance and vernacular.
Language translation ecounters innumerable barriers that impede effective idiomatic translation
and thereby hamper communication. This is especially apparent in advertising materials.
Abstraction terse writing and word economy the is impeded by the great diversity of cultural
heritage and education which exists within countries and which causes varying interpretation of
even single sentence and simple concepts.
Cultural diversity
Cultural diversity poses the greatest problem in advertising communication is more difficult
because cultural factors largely determine the way objects are understood. Knowledge about
cultural diversity is therefore a must in advertising.
PROFILES OF SOME WELL KNOWN MNCs

MC DONALDS

In October 1996, McDonalds opened its first Indian outlet in Vasant Vihar, an affluent
residential colony in Indias capital, New Delhi. As of November 2004, McDonalds has opened
a total of 58 restaurants, mostly in the northern and western part of India. While McDonalds
opened 34 restaurants in five years (by 2001), 58 restaurants in eight years (by 2004), it is now
planning to add more than 90 new restaurants in the next three years. Although the initial scenes
of crowds lining up for days outside the McDonalds restaurants in Delhi and Mumbai are no
longer seen, Indian consumer response to McDonalds products still remains very strong.
McDonalds has given the adage of think global, act local a concrete shape in India. The
companys localization strategy is clearly manifest in the critical area of management.
McDonalds decided to set up two joint ventures on a 50:50 basis with two local entrepreneurs in
Mumbai (Amit Jatias company, Hardcastle Restaurants Private Limited) and Delhi (Vikram
Bakshis Connaught Plaza Restaurants Private Limited). It was their business plan emphasizing
India-centric management strategies and their easy access to bureaucracy so critical to effective
government relations building.
The company generates quality and long-term employment opportunities for Indians.
McDonalds typically employs local people, and the average McDonalds restaurant in India
employs more than 100 people in all kinds of positions cashiers, cooks, managers, etc.
Besides, every expansion also brings additional income and employment opportunities to Indias
agricultural work force, which is very pleasing to government officials.
AMERICAN EXPRESS
The story of American Express is a fascinating one, filled with interesting and sometimes quirky characters who --
through a combination of brains, perseverance and luck -- shaped the company's development during the past
century and a half.
The express company that forwarded freight and valuables evolved into a company that created and sold financial
products like money orders and travelers cheques. Following an era of international expansion, the company became
an entity perhaps best known for its charge card. Today, American Express is a global payments company.
The attributes that today are the hallmarks of the American Express brand -- trust, integrity, security, quality,
customer service -- all have their roots in this compelling story. In this history, as well, are the genesis and
development of the company's aspiration to become the world's most respected service brand.
TURNAROUND AND GROWTH
American Express divested several businesses to strengthen the companys balance sheet and concentrated on
shoring up its core payment, travel and financial planning businesses. The 1984 acquisition of IDS (Investors
Diversified Services) which had initiated American Express transformation from what had become known as a
card and travel company into a true financial services power proved to be a valuable investment, particularly as
other parts of the enterprise underwent major reengineering efforts to overhaul business processes and slash
operating costs. The company eventually lopped $3 billion from its cost base, freeing up money to invest in a
number of new products and services.
Rebuilding relationships with merchants became a top priority, as did significantly increasing American Express
Card acceptance across a wide range of industries and geographical markets. The company also began forming a
number of strategic partnerships with selected airlines, banks, retailers and other key businesses around the world.
Proving highly successful, these alliances have enabled American Express and its partners to efficiently leverage
their brands and business strengths while providing premium products and services to their mutual customers.
Within the decade, American Express was again operating from a position of strength. As the company celebrated
its 150th anniversary in 2000, its earnings, market share, core businesses and share price were strong. Even so, the
company began taking steps to counter several external economic issues on the horizon.
American Express India was established in 1921 providing high quality travel and financial
services. American Express in India is the largest company to have wide network of travel
locations in the country.
American Express Card division also tops upon other credit card issuer. American Express
Credit Cards in India is of basic two varieties, namely International Gold Amex Card and
International Green Amx Card.
RECRUITMENT PROCESS AND TRAINING & DEVELOPMENT
For experience people American Express Bank issues advertisement. There are about 30
management institutes from which trainees are recruited and fresh graduates are also selected.
The procedure is to apply to the corporate office and send the Bio-Data, which is further added to
the database of the bank. In the recruitment procedure the person has to qualify through a series
of interviews, group discussions etc or sometimes the people are also selected on a temporary
basis i.e. these people get selected properly only after their performance during that specific time
period. The recruitment procedure of American Express is very cumbersome. It takes quite a
long time to select people for the job because they always wants right people for the right job and
at right places or positions.
Whenever a new process or a new scheme is implemented by the bank, training is carried out
from the lower level to the top level and according to the performance of the people they get
incentives like promotions, increase in salary, and other perks. One month training is conducted
for the beginners which involves class room sessions, banking software, developing
communication skills, dress code etc. The middle level management as well as the junior is
trained through job rotation, simulation exercises and other on the job training method. Training
is basically internal and duration is usually for a month or 15 days. During the sales training
programme at American Express Bank, one of the most fundamental philosophies that are
constantly emphasized is that of customer orientation. A product analysis is demonstrated and
the corresponding technique is inculcated so that the salesmen analyze the needs, benefits and
features of a situation before they commence selling. The form of training is usually field
training at American Express.
PROCEDURE OF SALES TRAINING IN AMERICAN EXPRESS
Field performance is assessed systematically against known standards.
Deficiencies are identified, agreed and appropriate knowledge and skills are imparted to correct
the identified faults.
Guidance is given on the self training that is expected from the sales men.
Information is collected about common faults that can be more economically and effectively
corrected on a collective basis.
The effectiveness of the initial training is assessed so that it can be improved in the future. This
can be summarized as follows:
A S = V
Where A = Actual performance
S = Pre- set standards
V = Variance
To know that a sales man at American Express Bank spent seven and half- hour prospecting is
meaningless by itself. However, if the standard for this activity is ten hours then there is a minus
variance of two and half hours and it is this figure that should cause the management to initiate
corrective action.
EVALUATION OF THE SALES PEOPLE
There are various levels from M1 to M8 in which sales personnel are placed. The sales reach
these levels by getting grades for the new accounts gained as well as if the branch itself
consistently performs well. How well the sales people are achieving their targets and within
which period of time. Even the relationship of the sales people with their customers are also
judged. Appraisal is on the basis of annual recommendation from the immediate superior who
further recommends to the head of the department. Performance evaluation at American Express
takes into account achievements of the targets set for current account, corporate salary account,
savings account etc. and according to their performance they are given benefits like incentives,
perks, reimbursements etc. Actually the evaluation is done by comparing set standards with the
performance of the sales people and the quality of work he has done in that specific period of
time.
COMPENSATION AND INCENTIVES
The compensation strategies of the American Express is unique and broadly on the basis of
salary. They do not believe in giving very high packages of salary but instead they provide with a
lot of incentives through which the sales personnel can actually earn a lot more as compared to a
fixed salary and these incentives are given according to the quality of work performed over a
specific period of time. The more the performance the more incentive they get. The number and
quality of cases which are being handled by the sales personnel is also taken into consideration
and accordingly they are given incentives. The incentives are given in the form of
reimbursements (conveyance, medical etc), perks, extra holidays, increase in gross salary, free
trips, promotions etc.
REPORTING
Frequency of reporting is usually daily or quarterly basis. Due to this the performance of the
sales people has improved considerably. The reporting is done by the sales people according to
the cases they are handling and a data is prepared and this data is then analyzed by the sales team
leader after 15-20 days and recommend what further has to be done to meet the targets within
specified period of time.
QUOTAS AND TERRITORIES
As American Express believes in the term Customer Delight so as to make the customer fully
satisfied Amrican Express has also assigned certain Quotas. The Quotas are being assigned
according to the targets they have to achieve within certain specific period of time. The Quotas
are being assigned by the top management. The top management assigns these Quotas according
to the targets and the performance of the sales force. The bigger the customer the best sales team
is sent to handle these customers. However assigning territories largely depends upon how much
a territory can offer and how the resources can be stretched to meet the potential. The territories
in AMERICAN EXPRESS are assigned according to the performance level and the skills. The
important the customer a better sales person is being sent.
HONDA
The history of Honda Motor Company began with the vision of one man Soichiro Honda. His
dream was personal mobility for everyone.
Soichiro Honda founded Honda Motor Company in 1948. In the same year, he designed and
engineered the first product of this company a 50cc motorised bike on a bicycle frame in
his small shed at Hamamatsu.
Today, as the company celebrates its 50
th
anniversary, Honda is a global firm with a global
viewpoint and a four-region global strategy that is reflected in a solid commitment to local
markets and economies.
The essential spirit of Honda: In our eyes, however, our most enduring challenge has been to
satisfy the ever-changing needs of our customers.
Hondas vision and role fulfilling the global needs of personal mobility in the new automotive
society go hand in hand with its corporate philosophy: maintaining a global viewpoint, the
company is dedicated to supplying products of the highest efficiency at a reasonable price for
worldwide customer satisfaction.
In India, it is through Honda SIEL Cars India (HSCI) that customers can enjoy the benefits of
Hondas expertise. Incorporated in December 1995, HSCI is a joint venture between Honda
Motor Co Ltd, Japan, and SIEL Ltd, India.
The automobile production facility of HSCI has been set up on a 150-acre site in Greater Noida,
in the state of Uttar Pradesh. The initial installed capacity of this facility is 30,000 cars per
annum (on a two-shift basis). Commercial production of Honda automobiles from this facility
commenced in December 1997.
Of course , Honda SIEL is an organization which follows the HRM practices that is in line with
the practices followed by Maruti. But, sometimes its HR culture shows a brief reflection of
Japanese work culture. Honda is the organization, which cares for both human values and quality
of work culture.
Recruitment process in Honda follows the same practices as that of Maruti ( both internal and
external).
The training and development programme is more concentrated towards total quality
management (TQM). The quality objective of Honda SIEL is to attain zero defect. The training
programmes are more frequent as compared to Marutri by virtue of which Honda is able to
manage better JIT ( Just in-Time ) environment.. Another exception about Honda is that they
have set up a High Tech Training Centre through which they managee all India level dealers.
The Performance appraisal System follows the principle of Productivity and performance i.e.
better performance and productivity the better the reward in terms of personnel development
more or less Honda follows the same path as that like Maruti. The performance is measured on
the basis of yearly or mid yearly on the basis of over all performance.
ANALYSIS

1. How many years have you been associated with the organization?

Findings: 88% of the respondents have been working for the organization for the last 1-4 years,
6% respondents have been the organization for 5-10 years and 6% for less than one year.
2. Are you satisfied with your present job profile?

Findings: 61% respondents were satisfied with their present job profile while 39% were not
satisfied with their job profile. Those who were satisfied said that they were satisfied with their
work profile, variety of work and the professional management of the organization. The
respondents who were not satisfied said that they were not satisfied with the job profile but for
looking for a career in some other field of interest.
3. Do you believe that if you are able to manage people better, your performance at work
will improve?

Findings: 94% respondents feel that if they are able to manage people better, their performance
at work will improve. They said that if there is proper coordination between the employees than
there will be improvement in the work. This also effects the working environment in a better
way. Some respondents said that management of people gives effective & efficient output hence
the upward people might will provide optimum performance.





4. Please rank the factors as to how they initiate you to perform well (on a scale of 1 to 5)
for the following: 5 High Involvement 1 Low Involvement
RANK/Parameter 1 2 3 4 5

Job satisfaction 2 2 4

10

Opportunity to perform well at challenging work

3 6 9

Recognition and positive feedback for ones contributions

1 3 3 11

Personal support from ones supervisor 1 2 3 10 2

Effort above and beyond the minimum

4 7 5 2

Understanding the link between ones job and the organizations mission 1 5 4 3 5

Co-Employees

2 4 7 5

Assigned Work

1 3 11 3

Available Opportunities

5 8 5

Policies & Procedures 1 1 7 8 1

Compensation & rewards

5 9 4

Work Life Balance

4 3 2 9

Any other


Are you satisfied with the initiatives taken by the organization?

Findings: 56% respondents said that they were satisfied with the initiatives taken by the
organization. 44% respondents were not satisfied with the initiatives taken by the organization.
The respondents were satisfied because they were valued according to their competitiveness
while others were not satisfied because their organization does not take enough initiatives to
make them feel good.




6. Would you like your organization to introduce some new procedures so as to make staff
more engaged in their jobs?

Findings: 83% respondents said that they would you like their organization to introduce some
new procedures so as to make staff more engaged in their jobs. They wanted that their
organization should do something to reduce their workload.
Do you think that Employee Engagement leads to productivity?

Findings: 89% respondents said that employee engagement leads to productivity. They said that
the help of subordinates improves the productivity and help the organization to grow in a better
way. Some respondents said that good working environment & cooperation employee always
help in increasing productivity.
8. Does your company involve you in decision making of the organization?

Findings: 22% respondents said that they were involved in decision making while 78% said that
they were involved in the decision making.



9. Does the organization take your suggestion in bringing any changes in the training
module?

Findings: 39% respondents said that their organization took their suggestions in bringing any
changes in the training module while 61% respondents said that their suggestions were not taken.


10. . Does your supervisor, or someone at work, seem to care about you as a person?

Findings: 67% respondents said that their seniors & supervisors cared about them as an person
while 33% respondents said that their seniors never cared for them as a person.

11. Is there someone at work who encourages your development?

Findings: 67% respondents said that their seniors and subordinates encouraged their
developments while 33% said that no one encouraged their development in their organization.

12. Does the mission/purpose of your company make you feel your job is important?

Findings: 67% respondents said that the mission/purpose of their organization made them feel
that their job is important. They said that they were involved in decision making regarding to
their department. While 33% disagree to this.

13. Are your associates (fellow employees) committed to doing quality work?

Findings: 67% respondents said that their associates were committed to doing quality work while
33% said that their subordinates were not committed to doing quality work.

14. In the last year, have you had opportunities at work to learn and grow?

Findings: 83% respondents said that they had the opportunity to learn and grow while 17% said
that never got the opportunity.

15. List two schemes at your organization aimed at engaging employees.

Findings: The respondents said that the following were the schemes aimed at engaging
employees:
Performance Appraisal
Regular Discussion & feedback
ESOP
Mediclaim
While some respondents mentioned that there was no such scheme in their organization.





16. Does the company provide you incentives?

Findings: 89% respondents said that their job was not incentivated and they were not provided
any incentive. While 11% respondents were provided incentives for their job.

17. It is true that higher the employee engagement, better the organization's performance?
Findings: 78% respondents agree to the fact that higher the employee engagement, better the
performance of the organization. They feel that if the environment is friendly and facilities are
provided then it certainly improves the performance. While 22% respondents disagree to this.



18. Would you like your organization to introduce some new procedures so as to make you
more involved in your job?

Findings: 67% respondents cited the need for introduction of new procedures for increasing their
involvement. While 33% respondents said they do not see a need for new procedures.
CONCLUSION
On the one hand, the Globalization provided the best of opportunity to grow, on the other, it had
increased the intensity of competition to such a level that it has brought back the age old
philosophy of the survival of the fittest. The business firms in order to survive have to remain
competitive by increasing their resource strengths and making efficient and economic use of
their resources. The resources are defined in terms of men, money and material . Human
Resource, at the present scenario is considered as the most vital resource in providing the
competitive advantage and thereby instrumental in increasing the organizational performance.
The study revealed that the core HR practices like training and development, recruitment and
selection and performance appraisal are key to the organizational success. All the organizations
under the study follow a defined course of strategic HR practices. The implementation part is
goal driven. The most crucial strategic practice is training and development through which
organisations achieve goal congruence. Both the document based study and the interview
schedule suggests that the integration of the organisational goal with Strategic HR practices takes
place at the implementation level. Through continuous training programmes and periodic
performance appraisals higher level of integration can be achieved. And integration will generate
better organisational performance.
The opportunities are many, so also the competition is intense, the key players, in order to
remain competitive are continuously engaged in building up their resource strength which will
increase their productivity and effective integration of key HR practices forms the basis of better
organizational performance.
The integration HR practices determines or influences the performance of the employees of the
four operational departments, Because successful HR practices keeps the employee satisfied and
employee satisfaction reflects:-
High employee motivation
High Morale
Better emotional Quotient
High commitment and High involvement
Better departmental Coordination
Fun at Workplace or enjoy Working
Better Adoptability

All these put together results in increased productivity which means delivering quality service
with speed and comfort and that is comparative advantage. In Automobile Industry increased
Productivity results in better customer satisfaction, better customer satisfaction results in two
most important phenomenal performances:-
It increases the customer retention.
Satisfied customers spread the word of mouth that leads to increase in customers.
Thus, the ultimate result is building a loyal and increased customer base.
The Integrated HRM strategies of any organization aims at the economic use of human resource
towards continuous improvement of per capita productivity and there by attaining the
competitive advantage. HRD acts as catalysts in several organization processes aimed towards
keeping the organization profitable and alive. It is essentially an enabling process and hence
should be less visible and more effective. The level and nature of human resources directly
indicates the level of commitment and the seriousness with which the issues of HRD is looked at
that organization. Besides, investments in human resource should be viewed as long- term
investment.
HRD should play an effective role in:
Optimizing employees to grow with the organization.
Enabling employees to grow with the organization
Helping in the congruence of individual aspiration and organizational expectations.
Promoting collaboration and team spirit by establishing a climate of trust, openness mutuality
and inter-dependence.

SOME CONSTRAINTS IN HRD

Besides its obvious advantages/benefits HRD concepts is not yet accepted in totality because of
certain constraints. Major constraints in implementation is:

Paucity of trained human resource

Mismatch between the educational level and Job profile.

Quality of development of professional personal.

Imbalance of supply and demand of employees.

Management commitment and involvement in implementation of HRD plans.

Scarcity of component trainers.

Inadequate infrastructure of the organization to provide facilities and opportunities.

Lack of monitoring progress and adequate appraisal measures.

Old promotional policies and incentives measures.

Inadequate techniques to measure the benefit or resulted changes.

Inadequate career growth planning.

Government policies and trade unions attitude.

Pressure of completion not allowing sufficient time for any development.

Social economical burden not allowing individual to think of self-development.

Varied organizational culture and role opportunities and frequent mobility of employees

But one should not forget the importance of the people, because it is the people who run the
process. Therefore lot of attention is given to the Human Resource Development. Though
organisations primarily focus on two HR practices( Recruitment and Selection and Training and
Development), there always remains a gap between the supply and demand in terms of training
needs. The other areas like employee- employer relationship, rewards, employee retention, etc,
were not looked upon with sufficient care. The reasons for the same are often defined by the
complexities of Organizational objectives; because HR practices are often governed by the
Organizational Objectives.
To minimize these constraints the organizations needs to effect a perfect integration of
organizational objectives with Personal dimensions of objective and Management by objective
(MBO). The organisations need to educate and inform their employees regarding the present
business scenario and environmental changes including the objective behind downsizing. So that
people with the full knowledge can set and match their personal objective with organizational
objective and be prepared to serve effectively .
RECOMMENDATIONS
The following recommendations are made:-
Managers fulfill a key role in changing HRD practices but it was found that it is sometimes
difficult to get them to fulfill this active role, either because of their workload, lack of affinity
with HRD tasks or a lack of skills in this field.

Therefore in the short term, it is necessary to find strategies to involve managers in HRD, by
changing their view on learning and increasing their motivation to support learning. In the long
run, considerations should be given to incorporating HRD skills in all management training
programmes.

HRD functions should be more precisely defined and recognized by top management as a major
part of the global development strategy of the company and seen as an investment rather than a
cost.

Professional associations from different European countries should organize events where HRD
professionals can reach a common terminology, exchange ideas and collectively try to solve
difficult challenges.

There is a need to change to view that learning is just a classroom, teacher- based activity.

Companies should seek cooperation with (higher) institutions for vocational education and with
universities in order to assists in the creation of an infrastructure for lifelong learning.

Administrations and governmental agencies should set the example in adopting a clear learning
organization approach and more sophisticated human resources development policies.

Since competence development is seen as a key element of implementing the concept of the
learning organization, further research is needed to develop valid and useful competence
profiles; better understanding of the facilitating and inhibiting factors in competence assessment
and development; and in coping strategies of organizations that try to overcome problems in
implementing competence systems.
According to Mr. Cadigan (The HR Consultant) the best advice that can be provided to HR
directors is that the best development actually costs nothing other than an investment of time and
planning.
BIBLIOGRAPHY
ANNEXURE

NAME:
COMPANY:
DESIGNATION:
DEPARTMENT:
1. How many years have you been associated with the organization?
1-4 years
5-10 years
10 years & more

2. Are you satisfied with your present job profile?

Yes No.

Please Specify:




3. Do you believe that if you are able to manage people better, your performance at work will
improve?

Yes No

Please Justify





4. Please rank the factors as to how they initiate you to perform well (on a scale of 1 to 5) for the
following: 5 High Involvement 1 Low Involvement

Job satisfaction
Opportunity to perform well at challenging work
Recognition and positive feedback for ones contributions
Personal support from ones supervisor
Effort above and beyond the minimum
Understanding the link between ones job and the organizations mission
Co-Employees
Assigned Work
Available Opportunities
Policies & Procedures
Compensation & rewards
Work Life Balance
Any other___________________________________________________

5.Are you satisfied with the initiatives taken by the organization?

Yes No

Give reasons
______________________________________________________________________________
______________________________________________________________________________
___________________________

6. Would you like your organization to introduce some new procedures so as to make staff more
engaged in their jobs?

Yes No.

Give reasons:
______________________________________________________________________________
____________________________________________
7. Do you think that Employee Engagement leads to productivity?
Yes No.

Please comment
______________________________________________________________________________
______________________________________________________________________________
___________________________

8. Does your company involve you in decision making of the
organization ?

Yes No

What kind of decision making
_____________________________________________________________________________
_____________________________________________________________________________
__________________________

9. Does the organization take your suggestion in bringing any changes in the training module?

Yes No

Which all suggestions were provided by you


______________________________________________________________________________
__________________________________________

Does your supervisor, or someone at work, seem to care about you as a person?
_____________________________________________________________________________
_____________________________________________________________________________
__________________________________________________

Is there someone at work who encourages your development?
______________________________________________________________________________
______________________________________________________________________________
___________________________

Does the mission/purpose of your company make you feel your job is important?
_____________________________________________________________________________
_____________________________________________________________________________
__________________________

Are your associates (fellow employees) committed to doing quality work?
_____________________________________________________________________________
_____________________________________________________________________________
__________________________

14. In the last year, have you had opportunities at work to learn and grow?
_____________________________________________________________________________
_____________________________________________________________________________
__________________________

15. List two schemes at your organization aimed at engaging employees.
_________________________________________________________
_________________________________________________________

16. Does the company provide you incentives?
Yes No.

On what grounds
______________________________________________________________________________
______________________________________________________________________________
___________________________________________________

17. It is true that higher the employee engagement, better the organization's performance?
Yes No.

Please Specify
______________________________________________________________________________
______________________________________________________________________________
___________________________________________________

18. Would you like your organization to introduce some new procedures so as to make you more
involved in your job?

Yes No.

If no than please specify:
______________________________________________________________________________
______________________________________________________________________________
___________________________________________________

BIBLIOGRAPHY

Journal & Magazines

Journal of AIMA Indian Management
Rechard Toracca HRD Review
International journals of cross cultural management
HR Magazine
Harvard Business Review
Academy of management review

Internet Resources

www.google.com
www.lycos.com
www.emeraldinsight.com
www.ebscohost.com
www.hrmguide.com
www.citehr.com

Figure: HRM as Central Subsystem in an Organisation

Marketing Subsystem

Material subsystem

Technical Subsystem

HRM Subsystem

Finance Subsystem

TRAINING
AND
DEVELOPMENT

MANAGEMENT
SUCCESSION

SELECTION,
RECRUITMENT
AND PLACEMENT

PERFORMANCE
APPRAISAL
AND COUNSELLING

QUALITY OF
WORK LIFE
(QWL)

MOTIVATION,
REWARD AND
PUNISHMENT

CAREER PLANNING

ORGANISATIONAL
DEVELOPMENT

MISCELLANEOUS