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A German car manufacturer taking over an American firm in United States
Contents

Corporate governance and control
Laws and regulations and Educational system
Culture
State of economy
Political, governmental and economic considerations

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Introduction
This report is compiled to give an understanding of the affects and suitability’s of transferring the human resources practices of the German firm to the newly acquired United States firm. The German firm being in the car manufacturing market has enjoyed considerable progress in the last few years and to balance their growth in terms of the supply and sourcing capabilities in the United States an American firm was acquired recently. The German firm after the acquisition has found out that there are differences in the ways in which the human resource management practices are implemented in their newly acquired firm. According to Pieper (1990), the subject matters of human resources practices such as employment and selection system, promotion, personnel transfer, dismissal, job analysis, job description, employee evaluation, wages and salaries, safety and sanity measures are common in the enterprise of every country. He goes on to say that the concrete contents of measures or implemented systems and functions are different from company to company and from region to region. This is the case as the behavior of management style may be influenced by the behavior various factors specific to that region at that period of time such as the social and economic background. It is these factors which influence the human resource practices which are addressed in this report. More specifically the report looks into the advantages or disadvantages for the transfer of the human resource practices in the German company to the American company and the various factors influencing that decision. These factors are analysed by comparing the human resource practices of the different regions based on Management and employee practice, Corporate governance and control, Laws and regulations, Educational system, Culture, State of economy, Type of government, Political situation etc. the report will analyse most of these factors which are pertinent to the case and analyse the different aspects from both perspectives.
On the face of the issue of transferring the human resource practices of the German company to the American firm one of the major points for the transfer is that there are huge number of foreign multinational companies operating in the united states and some of them have at least transferred the work culture and management practices of their parent organisation to the invested company. This is highest in the case in the United States as has been the most attractive destination for foreign direct investment due to the virtue of having the biggest market in the world. One another factor will be that there are a huge number of foreigners especially from Europe and Asia which forms the work force of the American companies and it is a cosmopolitan nation and has attracted various cultural factors into its own culture.
According to Tempel (2001) there is a certain degree of multinationality and permissiveness in the American business scenarios than in the German market conditions and the various factors associated with this are that little market regulation, deep internationalization and global spread where as the German business sector is more regulated in terms of competition and the industries and government is interdependent.

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Corporate governance and control
As per Lehman et al (2005) corporate governance is the management of an organisation in the interests of its shareholders. As such there have been instituted practices of board level controls on the managers who are in control of the day to day aspects of the organisation. The human resources elements of selecting, recruiting, training, compensating and management of performance of employees needs to be in line with the corporate board’s policies and objectives. As human resource policies are made essential component of corporate strategy the personal in the department must have a clear understanding of company’s business and market conditions to identify competency requirements for executives. In the United States there is the practice of negligent hiring process and one which posses a legal risk that causes concern. Negligent hiring occurs when a company doesn’t adequately checks the back ground qualifications and skills of a potential employee before or during the hiring process. In this case the company may not be able to achieve the developed corporate objectives without installing risk management system. (Lehman et al 2005). Where as, in the case of the Germany it is legally bound to have a risk assessment system in place in relation to the employee hiring and management policies. This practice of the Germans to have the system in place as per the corporate board’s policies of best practices is very effective and the transferring of such practices to the American firm where it is less fiercely established will make the corporate governance much better to control and manage. In similar issues the government corporate government structures are much stricter due to regulatory conditions prevailing in the country and different from the United States. By this means the practices of the German company’s human resource policies can be transferred to that of the American company without needing any modification and alterations to suit to the rules of United States.

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Laws and regulations and Educational system
Every country has rules and regulations regarding labor laws and according to Tayeb (2005) the unites states has a non interventionist and voluntarist attitude towards labor law and industrial relations where as in the case of Germany the law is of central importance to the industrial relations. American culture is highly individualistic and hence the state has not intervened in various areas of social life such as industrial relations, education, family, social security, commerce etc. In a direct opposite position is Germany with rules and regulations on individual labor law, regulations on collective bargaining and employee representation.
The educational systems in both Germany and the United States are very similar but in the German system it can be said that there are more importance to the skills and qualities needed to perform technical aspects of job and management aspects of the job and these are specializations. In the American system the stress is more important on the personal development and the person develops the skills and qualities needed for the job through work experience more than the education. German system puts more emphasis on the educational back ground when selecting and recruiting but in the American system it is the skills developed over his work and other aspects which are more predominant. Hence in the realm of human resources practices when the German system is introduced in to the American system there is bound to be challenges. This can be overcome easily by the understanding of the current system and then modifying the practices to suit the local needs of the American model of selection and recruitment.
Culture
When considering the cultural aspects of both the nations Dowling, Festing and Engle, (2008), has explained that there is a difference in the degree of ability to learn new ideas and structures from other cultures. Due to the fragmented and pluralistic nature of the social system in the American society they are better equipped in promoting and introducing best practices. As well as the internal culture the extent of internationalization is a complementing factor which to reinforce their ability for learning and adapting. According to Jackson (2002) a multi national company does not pursue a global consistency or local responsiveness but tends to both the characteristics in its external market and internal structures, by transferring knowledge and expertise across borders and adapting to local conditions. In this instance the German company has to adopt the stance of a global consistency and local responsiveness in order to sustain the balance in the transfer of human resources practices as well. In most cases of multinational companies with foreign subsidiaries adopt a coordinated federation approach where the subsidiaries are free to adopt local strategies according to local conditions as well as depending upon the guidance and structure of their parent company.
As per Tempel (2001) a polycentric management style understands the cultural, legal and political factors are dissimilar from region to region and when a management adopts a polycentric style with the local managers will be better able to adapt to local environmental conditions.

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State of economy
The present economic condition of both Germany and the United States are at best uncertain for a period of at least one year. Even though there are very recent indications of a revival of the American economy in the fourth quarter this does give an extremely positive image about the nature and time span required for the recovery. With the new administration in Washington trying its best to revive the economy it is in Germany that there is real progress in terms of government spending and support for the industry. From the perspective of human resources the condition of both the economies are not a different. While German industry is more reliant on export of its goods, the Americans are more of a consumer nation. These dos not compare with the multinational companies operating in different styles of economy or in different stages of economic growth where a clash might take place if the parent company’s policies in a developed nation is exported and practiced in its subsidiary company in a poorer, less developed economy. As it stands the state of the economy is similar and offers no consequential opposition for the implementation of the human resources management practice of the German company to its American subsidiary.

Political, governmental and economic considerations
According to Noe (2004) a country’s political legal systems strongly impinges on human resource management. The human resources practices of training, rewarding, retentions, retrenchment etc are often developed on the basis of one country’s politico-legal system. A common understanding among the world population is that it is America which initiated the elimination of discrimination in workplace and this is followed by other countries taking up similar programs in their governmental policies. The United States has instituted the fair labor standards act among other laws to set minimum wages and the other related regulations dictate the process of negotiation between unions and management. In Germany there are right of the employees for codetermination at the level of the company and individual.
The United States and Germany are democracies and the governments in both the countries almost follow similar policies in relation to the industry. While as said earlier the level involvement of involvement of the governments in relation to labor laws and regulations and arbitration in industrial disputes are different. It may be said that with relation to the human resources management practices Germany has a better policy in the government towards employee welfare and care. This makes the human resources practices to the employees in the lower levels of the organisations much better in German industries. The adaptation of such policies to its American counterpart will definitely prove to be a good measure of the German company’s relationship to the employees in that organisation.

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Conclusion
The report was a study of the governmental, cultural, educational, politico legal structures of both the German and the United States in order to find out the feasibility of the transfer of the human resources policies and practices from the German parent company to its newly acquired subsidiary in the united sates. The subject matters of human resources practices such as employment and selection system, promotion, personnel transfer, dismissal, job analysis, job description, employee evaluation, wages and salaries, safety and sanity measures are common in the enterprise of every country. The concrete contents of measures or implemented systems and functions are different from company to company and from region to region. This is because the management style may be influenced by the behavior various factors specific to that region at a specific period of time such as the social and economic background. It is these factors which influence the human resource practices which are addressed in this report. From the study of the various above aspects it is clear that there is a very synchronous character in most of al the structures and systems followed in both the regions and a transfer of the practices will be highly beneficial to synchronize the systems. It is also evident from the study that there is no clash or differences between both the systems that would undermine such a transfer of the systems and policies.

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References

  1. Pieper, R., (1990), Human resource management: an international comparison, Vol 26, Issue 26, De Gruyter studies in organisation, Walter de Gruyter publications.
  2. Tempel, A., (2001), The cross national transfer of human resource management practices, Rainer Hampp Verlag publications
  3. Dowling, P. J., Festing, M. and Engle, A. D., (2008), International human resource management: managing people in a multinational context, 5th edition, Cengage Learning Publications.
  4. Tayeb, M. H., (2005), International human resource management: a multinational company perspective, Oxford University press publications.
  5. Jackson, T., (2002), International human resources management: a cross cultural approach, Sage publications.
  6. Noe, R., (2004), Human resources management fundamentals, 3rd edition, Oxford University press publications.
  7. Lehman, C. R., Tinker, T., Merino, B. D. and Neimark M. K., (2005), Corporate governance, Vol 11, Advances in public interest accounting, Emerald group publishing.