Socio_Geographic_Factors

Introduction “Three fundamental factors have affected the process of economic globalization which are improvements in technology, diversified tastes of consumers, and public policies both local and national (Mussa, 2000. p.1).” In the case of DHL, and their business enterprise into Central and Eastern European regions will be discussed in relation to class definition, work value systems, geographic mobility, and regional variations of the culture and business environment in the new market-place. DHL’s market growth, global initiative, and competitive management structure has afforded them the leadership role in their industry. The specific multi-national business strategy will be discussed to examine the cross cultured benefits of being a risk-taker when entering into new global market regardless of the apparent challenges. Classes and Work Values “Class, or socioeconomic status (SES), permeates our social behavior and thought, and ours (American’s) is a class-based society, the by-product of industrialization and capitalism (Kottak & Kozaitis, 2003. chp 13).” DHL operates as one of the world’s largest international carrier service provider founded in 1969, services more than 200 countries, while employing more than 55,000 people around the world. As the organization entered Central and Eastern Europe in the early 1990’s, there were no air carrier services in these regions during the reigning communist time period because of the lack of democratic freedoms. Restrictions on Central and Eastern Europe would include rigid border patrols, censorship of printed materials, and cassettes and letters. Furthermore, monopolistic activities within the local governments eliminated the need for companies like DHL to operate successfully. DHL’s entry into this market influenced the change initiatives for a new transportation infrastructure that lead to other investments into the regions business structure. The commitment to this area of business also meant that locals would be exposed to the opportunity for upward mobility as DHL human capital needs grew. Penetrating the region, investing in community infrastructure to support long-term needs of business operations, and establishing local and regional guidelines to operate profitably was DHL’s new challenge to fuse class and work values of this regional organization. Exceptional challenges exist when organizations enter new geographical regions such as dealing with evolving government’s policies, addressing potential environmental regulations, and the diverse needs of the community. Allowing an opportunity to take advantage of the promise of vertical mobility contributed to the potential improvements of the quality of life immediately following the government change over. “The commitment to the region was well illustrated by the firm’s program to progressively replace expatriate country managers in Central and Eastern European with local employees. Local managers now run DHL’s operations in Romania, Bulgaria, the Czech Republic, Hungary, Slovenia, Croatia, Serbia, and Montenegro, Albania, and Bosnia-Herzegovina, as well as in Ukraine, and the Central Asian republics (Kostecki, 2000. p. 257).” Hence, the inception of a democratic government introduced new economic hurdles for the masses, and the means of incorporating an open class system, yet firms like DHL were willing and able to be the first to support international trade and monitor and analyze custom controls to streamline their business model when necessary. As part of DHL’s mission statement suggests, “we are a responsible corporate citizen on our country, taking into account the social and environmental needs of our employees, local community and the public (DHL).” DHL’s move into Central and Eastern Europe during the early 1990’s was very risky, and a time consuming change process. The traditional work and trade values of this region was technical, yet the tools and skill required to successfully recruit, retain, manage, and become profitability in the international shipping industry demanded strong organizational and leadership skills. An investment in human capital to introduce the skills, work value system, and logistical database management would lead to the improvements to support the volume of business necessary to make this region’s business operations profitable. “50 million was invested in the Central and Eastern European region as recognition of the growing logistics has started to play. Half of that amount was used to develop and invest in aircraft, vehicles, staff training, and state of the art computer technology (Kostecki, p288).” In an effort to engage workforce team across their business lines DHL used the Carrot philosophy. “The Carrot philosophy is a strategic method for promoting a culture of engagement and retention. DHL created a recognition program rich with symbols, energy, and ample training program objectives (Bagley, 2008. p3) Privatization in the business environment in Central and Eastern European regions means that citizens are responsible for social ownership or their own means of becoming productive in society. Dedicated to partnerships globally, DHL has a Corporate Social Responsibility (CSR) management program that establishes a “toolkit that covers principles, policies, and guidelines to promote a continuous dialogue with stakeholders (DHL).” Moreover, as other industries entered into the European market that supported the need for international shopping and logistics business, DHL contributed to the economic conditions of other businesses in the private sector to improve the market conditions and the possibility of mobility in the region. Migration soon followed to keep up with business development, human capital required to operate the new economic communities, and infrastructure improvements to promote continued growth. Geographic Mobility According to Kottack and Kozaitis, “regions are adapting to globalization”, and the exposure to the job market of Central and Eastern Europe at the time of democratic government transformation was a benefit for the talent pool within the region. The opportunity of employment, the ability to actively participate in new marketability of industry, and participate in new economic productivity of the country attracted a diverse, but unqualified workforce. However, time management, investments in training and development, and slowly replacing non-native workers with local candidates as they concluded DHL’s extensive development program allowed the region to offer service-based business function for all store fronts. DHL has found a way to leverage external customer experiences globally with national and regional account management programs by introducing global customer managers (GCM). “Developing key/strategic account management programs represent an effective organizational response to the increasing concentration of revenues and profits among customers in individual geographic areas (Capon & Senn, 2010. p. 34).” The concept of these new roles for DHL and the regions where they are functional contributed to DHL’s success in this geographic area because “mobility for workers across Europe labor markets suffered because of regulatory obstacles that are still present. Regional Variations DHL’s multi-national global service variability has improved the customer/supplier relationship. Procurement has a systematic approach to solution management allowing regional management successful to alleviate problems with pricing, service consistency, and localized customs or regulatory delays in the service, product, and delivery systems. To deal with regional diversity, the evolving needs of each client depending on the geographical location, and provide a consistent product delivery system DHL created specialized role to streamline processes in this sensitive area of concern. “With the growth of larger communities (for DHL the inception of global customer managers (GCM)), being forced though advanced information technology, transnational migration, and other globalizing trends, regional differences per se may become less important (Kottack & Kzaitis, 2003. ch 14).” The Global Customer Manager role capitalizes on the scope of managing the needs of global clients, and led to another job description designed to support DHL’s organizational commitment called Global Account Managers (GAM). GAM’s responsibility is to have a direct relationship with their respective assigned market or country organization, handle resource allocation for budgetary guidelines, and may cover multiple regional market locations on part-time basis. Furthermore, the job description allows DHL to support regional and geographic operating needs of the business with strategic, functional, and organizational capabilities required to manage the needs of this segment of business. Planning for DHL as a new business operating in Eastern Europe became a daunting problem because of the red tape and non-functioning custom controls within the region. As a business strategy, DHL objective is the provide on-time deliveries, therefore focused on personal relationship management with local custom officials. However, the fast changing economic growth in the region slowed down the production flow of DHL’s delivery system. Planning, maintaining accurate transaction rates, and providing adequate customer service was negatively affected by custom regulations that limited size, weight, and documentation restrictions on Eastern Europe. Furthermore, “another important reason for inefficiencies in the operations of customer and the irregular practices are low salaries of the officers and little funding available for investment in the up-grading of the customs administration and training (Kostecki, 2003.p. 293).” DHL’s response to managing the potential for fraud, managing the relationships with regional custom officials, and providing the required expertise for import and export trade regulations will be properly facilitated by the global account manager assigned to within their account territory assignment. The program scope will have a designated coverage model to perform at a ratio of 1:1, with empowerment resources to support budgetary decision making to meet client needs and expectations. Impact of Family Definitions According to DHL, “balancing work and life is about juggling your job, personal time, family life, and community involvement, fun and relaxation (DHL)”. Moreover, as a member of society, family orientation plays a strong role in enculturation, and thus in identity formation (Kottack & Kozaitis, 2003. ch. 16).” With the changing family orientation and dynamic, organizations are forced to respond to the immediate needs of the family unit to actively participate in the demands of our community. In response to the needs and voice of the workforce, DHL Express launched voluntary perks in 2005 that was designed to “offer brand unity between the different organizations from which the company was formed (Truter, 2006. p1).” The perks on program offer childcare vouchers, healthcare cash plans, and other partnership discounts. Moreover, investing in personal and professional family well-being is directly related to high levels of job performance, and DHL’s program promotes the stabilization of home-life. Hence, according to Greenhaus, Bedeian, and Mossholder, in a study to monitor the interaction between job performance and specific work experiences state, “the negative relationship between job performance and personal and family well-being is stronger for employee who work in non-supportive environments than for employees who work in supportive environments (Greenhaus, Bedeian, & Mossholder, 1987. p.6).” Conclusion Diversifying your market niche, understanding the need to adjust to socio-geographical conditions to meet the needs of the immediate environment, and strategically responding to the business demands will provide long-term returns on investment. DHL maintains their position as a world leader in international logistics and express services because of their aggressive attempt to operate in many multinational markets. Hence, a major challenge in global profitability is the task of managing human capital in terms of recruiting, training and development, quality retention initiative, and establishing motivational rewards and benefits programs. The responsibility to community needs, responding to client or buyer behaviors in a global community, and differentiation to remain competitive in supply chain innovation in logistics. DHL has maintained their success by understanding target markets, developing operational strategies, and allocating resources in response to new business opportunities. Furthermore, the high cost associated with operating in a region during a national government and political change process contributed to the cost/benefit analysis that challenged both technical and managerial strengths of DHL in their long-term commitment to succeed. Hence, commitment to employee development is one of the major characteristics that set DHL apart. “DHL’s dedication to internal staff through its recruitment, training and reward schemes has set the standard for the industry and the company continues to be the most innovative in the industry (DHL).” References Author Unknown, (2002). Three Times a Winner! DHL Scoops Awards and Sets Industry Standards in Operations, Employee Innovation, and Brand Advertising. Retrieved May 12, 2010 from: http://wap.dhl.com/info/news/html/pr051202.html. Author Unknown, (2010). DHL Company Information. Retrieved on May 15, 2010 from: http://www.dhl.com/company/companyinfo.asp'nav=company info. Capon, N., & Senn, C., (2010). Global Customer Management Programs: How to Make Then Really Work. California Management Review. Vol. 52. No. 2. Winter 2010. Greenhaus, J., Bedeian, A., & Mossholder, K., (1987). Work Experiences, Job Performance, and Feelings of Personal and Family Well Being. P6. Journal of Vocational Behavior. Vol. 31 Academic Press, Inc. 1987. Kostecki, M., (2000). DHL Worldwide Express: Providing Just-in-Tine Delivery Services Across Customs Borders in Central and Eastern Europe. Globalization of Services Property of Routledge. Kottack, C.P., & Kozaitis, K.A., (2003). On Being Different: Diversity and Multiculturalism North American Mainstream, 2e. Chapters 13, 14& 16. Retrieved on May 10, 2010 from: https://ecampus.phoenix.edu. Mussa, M., (2000). Factors Driving Global Economic Integration. International Money Fund. Retrieved on May 12, 2010 from: http://www.imf.org/external/np/speeches/2000/082500 .htm#human. Truter, C., (2006). Start of a Long and Difficult Journey: DHL Express Launches Voluntary Perks. Retrieved on May 14, 2010 from: https://employeebenefits.co.uk/cgi-bin/item. Cg'id=1549.