Global_Staffing

Running head: GLOBAL STAFFING STRATEGIES Global Staffing Paper Staci K. Wall University of Phoenix Global Staffing Introduction The following essay will summarize and explain a comprehensive staffing strategy for a company that expanded into an oversea market. Businesses have many challenges and opportunities as they expand into international markets. This global research essay will outline the challenges that companies are faced while expanding their business overseas. Specifically, I am going to outline Target Corporation and the challenges they faced when they expanded their business into India and how business is doing today. Key points of interest will be: industry type, cultural challenges and differences, human resources challenges, recruitment and selection, and how they aligned their organizational structure to make the expansion a success. When businesses decide to expand, critical factors are discussed and carefully evaluated to ensure that the organization has the means to survive in the recommended new location. Many of these decisions that executives are faced with are decisions that will affect employees, shareholders, financial assets, and there reputation. Creating and implementing an efficient staffing strategy is crucial to maintain organizational effectiveness when acquiring another organization. Type of Industry “The first Target store opened in 1962, the company's roots go back to 1881. Target set the standard for a new kind of store that offers both quality and low prices. Target has employed smart technology to help set retail trends, initiating ideas that have made our guests’ shopping experiences more enjoyable. Today, Target is one of the most respected retail brands in the U.S. Target has over 1,700 stores. They are clean, welcoming and intuitive to shop, with related departments conveniently placed next to each other. More than 350,000 team members serve 50 million guests (Target, 2010).” “Target India, known as Target Technology Services India, is a wholly owned subsidiary of Minneapolis, US-based Target Corporation. The $65 billion Target owns and runs 1,744 stores in the US and is the second largest general merchandiser in the country. In addition, Target operates an online business, Target.com. Target, which started its India operation in May 2005, currently operates from three places in Bangalore, two offices in Embassy Golf Links and one in Manyata Technology Park, and has over 2,000 people on its pay roll (Maitra, 2010).” “Target is a long-term strategic asset for Target corporation (Jacob, 2010)” Target India is a mixture of US employees and native employees. The idea at Target headquarters in Minneapolis, MN was that they wanted the culture in India to be as alike as possible. “At Target India there has been a conscious effort to establish a Target culture that is very similar to Target headquarters (Sreshta, 2008).” “Any future expansion of functions will be timed on the success of our retail business, focus on initiatives and how that would match up with the skill sets of our team in India. The time difference advantage between the countries combined with the talent pool in India has been responsible for Target India existing at the center of creative marketing, analytics and reporting for improved productivity and key technology implementations (Jacob, 2010).” I previously worked for Target Corporation here in the United States. Target has a very particular company culture, which is based on collaboration, work-life balance, and an emphasis on diversity. CEO Gregg W. Steinhafel expressed the 2008 company vision to be “the best company ever” (Target, 2010). “This vision is said to be carried out through the three core values: FFF: fast, fun and friendly, E’s of Excellence: energy, enthusiasm, execution equaling excellence, and speed is life (Target, 2010).” From my work experience, Target’s style is exciting and fun. Team camaraderie has been a focus of Target’s and it is imminent as soon as a customer walks into a Target store. Cultural Challenges The cultural challenges that Target faced when they opened their facility in India were language and communication barriers, cultural and team based behaviors and time zone barriers. These factors all have hindrances in which make operation difficult and is a vital key to the success of Target’s organization. “Upon coming to India there was an initial culture shock for most of the ex-pats at Target as they had not lived and worked in a foreign country. The combination of rich and poor, developed and underdeveloped was a piece of Indian life that ex-pats had to deal with. Many people in India have help around the home. This could be any of the following: maid, cook, or driver. The mentality of someone in the United States would be that more help would be an attractive option; however, the loss of independence and privacy, two valued attributes of American life, required significant adjustment (Sreshta, 2008).” Communication styles are also a hindrance for Target employees moving to Target India and vice versa. US employees moving to Target India also required an alteration in leadership styles. “Specifically, Indian team members had a harder time dealing with ambiguity, after further research it attributed to their previous work experience. Indian team members who come from technology service industries are generally given understandable instructions from clients and managers. Manager who deal with creative aspects of marketing recalled an instance in which the team members were given general instructions for their upcoming project. Managers found that their team members were not aware of their exact expectations; however, thus could not complete the project. Managers use a more interactive approach in which they probe team members for their ideas while suggesting some of their own (Sreshta, 2008).” Human Resources Challenges One of the biggest challenges that I found in my research is trying to convince employees to stay. In India team member demographic is different from that of headquarters, more specifically in technology. In India team members tend to be younger and have high professional aspirations. Pay structure, promotions, and management opportunities are all important to these young professionals. India has an abundance of positions; therefore, Target India’s software engineers tend to shop around for companies who may have higher salaries or more opportunities for growth. Restrictive issues facing companies that expand into India are its regulations. The labor laws have become an extra cost, for example, in bribes paid to inspectors, but they are not a huge barrier to business. Yet in most conversations with manufacturers, labor laws still appear large. One is Chapter five B of the 1947 Industrial Disputes Act. This Act bars establishments with more than 100 workers from laying employees off without the permission of the state government. This deters employment and encourages the substitution of capital for labor (Economist, 2006). Uncertainty around political and legislative variation requirements increase the challenges around managing in another culture. As one VP stated, “In America you marry a company, but in India you marry a profession.” Technology team members tend to want to learn more programs, attend many of program trainings that Target offers, and they tend to learn very quickly. Team members in India are “technology fluent,” specifically writing programs and using new applications, Indian team members are faster and tend to use innovative and creative approaches. Working styles in the two locations is also different. The “nine to five” mentality is prevalent at headquarters, in which team members arrive on time, work throughout the day sometimes eating their lunch in their cubicle, and leave on time. In India, the work day is from 9:30-6:30, but because calls are made to Minneapolis in the evening, many team members arrive at 10 and often leave later than 6:30. Work hours at Target India are more flexible (Sreshta, 2008). Diversity is a huge initiative at Target. CEO Gregg Steinhafel states, “At Target, diversity is much more than a goal or campaign. It’s a core value we integrate into every area of our business; from our suppliers, to our teams, to the shopping experience in our stores. We foster an inclusive culture that allows our high-performing and diverse team to drive innovation.” He places a high priority about being inclusive not only for employees, but also for the communities that Target serves. Target also works with women and minority owned vendors, which helps to build and foster professional relationships while enhancing their corporate diversity initiatives and goals. Target also focuses on Individual Development Plans for their employees. IDP’s help employees grow and develop within their profession, feel like they are making progress, continue to be effective and add valuable constructive criticism that will help them as they continue to grow at Target. Developing employees is an effective way to keep employees engaged. All of these factors affect organizational effectiveness. Another perk that Target provides to its’ employees is recognition for a job well done. During working hours Target focuses on the team members, holding team huddles, activities for employee engagement, and handing out ‘Good Team Member’ cards. Good team member cards are given to team members by his or her peers. This allows team members to thank someone for his or her help, making an area safe for coworkers or customers, or even if another team member over hears a coworker asking someone, “Can I Help You Find Something.” This is the slogan Target has made famous. Recruitment and Selection Companies expanding into global environments must be cognizant of regional attitudes and experiences as Target will be acquiring these, both good and bad, along with any experienced workers Target hires. The people of India are as diverse in their cultural orientations and work habits as they are in the regions in which they are raised (Valanju, 2006). When interviewing a potential employee, Target should keep in mind that people who have spent a significant part of their lives in one particular region of India may have certain generic attitudes inherent in those regions and that living in one specific region will have a significantly affect their ethical outlook. Living in one region of India can also have a marked impact on work ethics such as attitude, dedication, initiative, and acceptance of responsibility. For these reasons Target should consider including an Indian native who is well versed in regional customs when conducting an interview. This will help in preventing Target from missing any cultural nuances (Valanju, 2006). Many domestic hospitality organizations (those that operate in only one country) have much to benefit from diversity management and can struggle with its implementation, the challenges for those doing business internationally can be even more considerable. National (and local) cultures can vary on a number of dimensions including: values (e.g., work ethic, time orientation, individualism/collectivism); religious beliefs (e.g., rituals, holidays, dress, customs); social structure (e.g., the role of the family, mobility, urbanization, social stratification); education (e.g., literacy, access); and communication (e.g., language, dialect, nonverbal communication, media, technology) (Belcourt, Sherman, Bohlander, Snell., 1996). Additional options to consider would be simply hiring the best personnel for the available jobs regardless of nationality. This approach would allow Target to recruit American expatriates or better yet Indian Americans to lead their Indian subsidiary closely assisted by host country nationals. This strategy will have best results if the leader and the assistant are close in working styles and have the same vision for the company. This will allow them to work as a team from the beginning. In addition, Target also appointed Indian nationals into the board and executive level positions. This will provide Target with extremely valuable expertise while developing global strategies (Kottolli, 2006). “It is important to hire individuals who blend well with the company rather than securing employees who possess the knowledge and skills required to perform a specific job. These individuals must be able to acquire new SKA’s as jobs and environments change. Therefore, it is imperative for companies who wish to stay on top of the competition to develop and maintain high quality recruitment systems. The recruiting system is especially important when the hiring is being done in a foreign country (Dreher & Dougherty, 2001).” Overseas expansion will potentially hinder employers from attaining their goals. Cultural challenges can take over the focus to which the company may overlook the talent that is already in existence. For these companies, occasionally the best option is to promote and transfer employees who have already worked their way up the corporate ladder. The underlying issue then becomes the employees trailing spouse. This makes the equation a bit more complicated because current employees cannot leave the country and not have a guaranteed position for their spouse. Because of this barrier, some of the most qualified people are unavailable for the position. However, with the complexities of growing a business overseas and the costs of training current employees deciding whether to train current employees as expatriates or employ local talent is not an easy decision (Solomon, 1999). Organization Structure Target did not change much of the organizational structure when they revised their strategies and opened Target Technology Services in India. Headquarters sent staff from the United States over to India to ensure that any communication gaps were closed quickly and efficiently. Some employees have moved permanently over to India to embrace the culture and vice versa to the United States. The goal at Target headquarters was to mold Target Technology Services in India to reflect Target in the United States. Strategic initiatives being driven by the Target India have already been implemented. “Target India has been driving business intelligence systems initiatives that range from store organization to merchandising. It has also been at the lead in an enterprise-wide initiative called TGT 100, which is our financial SAP systems implementation. The platform, which will go live in a few months, will support all our basic accounting and finance functions. In the US, Home Depot and Wal-Mart are also rolling out the same platform. It has also been our goal to be competitive against the best-in-class operators across various retail categories. Take, for instance, the pharmacy, OTC products and beauty segment, which are among the company’s fastest-growing and profitable businesses. We intend to increase our market share in this segment from 4% by moving from a third-party to a Target owned and operated pharmacy system, spearheaded by the India team (Jacob, 2010).” It has been somewhat of a struggle to move that development forward because of travel, location, time, and money. One suggestion that I have for Target would be to create a Virtual Target. Video Conferencing and telecommuting are ways global organizations can stay connected and furthermore enhance the company’s cohesion. Video conferencing is becoming more popular for global organizations. The ability to see faces and facial expressions during meetings is an effective way to increase company morale and communication. Evaluation of Results Research suggests that effectively managing a diverse workforce can lead to many benefits, including increased success in global markets, an enhanced ability to meet the needs of diverse customers, the ability to attract increased numbers of high-quality employees, increased creativity and higher quality decision-making, increased organizational flexibility, and in some instances, reduced costs through lower rates of absenteeism and turnover (Cox & Blake, 1991). Target has opened their eyes to their ever changing markets and moving forward and exceeding their consumers’ expectations. Conclusion Target has been a front runner concerning the retail industry in the United States. When deciding whether or not to expand in India, Target laid the ground work and targeted a knowledgeable market. The implemented changes slowly and have continued to grow since 2005. This was a huge success because there was an abundance of intelligence in India to lead their Target Technology Services expansion. It was a slow and thought out process that has brought Target the return in investment. “Our mission is to make Target the preferred shopping destination for our guests by delivering outstanding value, continuous innovation and an exceptional guest experience by consistently fulfilling our Expect More. Pay Less® brand promise (Target, 2010).” Their “Expect more, pay less” slogan has been a huge win for Target and from the look of their financial report; consumers are happy as well. References Belcourt, M.Sherman, A. W.Bohlander, G. W.Snell, S. A. (1996) Managing Human Resources. Scarborough: Nelson. Cox, T. H.; Blake, S. (1991) Managing cultural diversity: implications for organizational competitiveness. Academy of Management Executive, 5 (3), 45-56. Dreher, G. & Dougherty, T. W. (2001). Human Resource strategy: A behavioral perspective for the general manager. New York: McGraw-Hill. Economist (2006).  Still in the Way.  Economist, 11-14. Retrieved March 14, 2010 from EBSCOhost database. Jacob, Sarah. (2010). Target India is a long-term strategic asset. Retrieved from http://economictimes.indiatimes.com/opinion/interviews/Target-India-is-a-long-term-strategic-asset/articleshow/5613476.cms Kottolli, A. (2006). International Staffing Strategy. Retrieved March 14, 2010 from: http://www.geocities.com/akottolli/International_Staffing_Strategy.htm. Maitra, DM. (2010, January 16). Wipro to buy Target India Centre with its 2,000 staff. Deccan Herald. Solomon, C. M. (1999). Overseas employees: Expatriots or local labor' World Trade, 12(6), 56. Retrieved March 14, 2010, from EBSCOhost database. Sreshta, Nina. (2008, September 20). The Work environment of Target India. Retrieved from http://www.cwru.edu/artsci/anth/documents/Sreshtafinalreport.pdf Target.com, (2010). About Target India. Retrieved from http://india.target.com/site/en/corporate/page.jsp'contentId=PRD03-004529 Valanju, S. (2006, April). Subcontinental selection. Financial Management, (4), 57-58. Retrieved March 14, 2010 from EBSCOhost database.