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SET – A

Comprehensive Unit Test (MBA) - HRM
INSTRUCTIONS:
1. Solve all the following “SECTIONS” [Hand-Writing
Format] with Cover Page
2. Submit “The TEST” on Friday 11 April 2014 @ 6:30 PM

FACULTY: PROFESSOR DR. M. MAHMODUL HASAN
SECTION – A: Micro Case Study: HSBC

HSBC in Asia: A Case Study on Harmonization of HR Practices
Forces in the world economy have necessitated that financial institutions become more international in outlook if they are to survive in the global arena. Noticeable changes, for example mergers and acquisitions, emergence of new players, deregulation and application of new technology, have been seen in the structure of the global financial industry in the last few years. These changes have intensified competition among financial institutions in many countries such as the East Asian economies. Three areas of international HRM that concern these financial institutions are recruitment and selection, learning and development and reward. This case study considers HSBC’s HRM policies and practices in East Asia, what institutional and cultural factors influence their HRM approaches and the implications of change in new practices. HSBC Holdings is the world’s largest company and bank and has significant presence in the major financial markets operating a network of around 600 offices in 20 countries in the Asia-Pacific region. It has a long history in East Asia which can be traced back to the nineteenth century. When entering the Asian market many multi-national enterprises have adopted an ethnocentric approach to their recruitment and selection policies, key positions being filled by expatriates from the home country although a few have taken the geocentric route to search for the best people regardless of country of origin. However the key issue for many of the Tiger economies has been a large pool of unskilled and semi-skilled workers and a shortage of sufficient numbers of well-trained managers and technical support staff. Recruiting qualified bankers in local markets has also proved to be difficult. Business expansion over the last few years has increased the talent war in the labour markets. As an example, HSBC had planned to double the number of branches in China over the next few years but came up against the lack of qualified people. Consequently HSBC implemented a global talent management programme to attract, motivate and retain its employees. Firstly, HR professionals from the Bank visited all countries to describe key principles and nomination guidelines for talent assessment to ensure employees “buy-in” to the recruitment and selection process. Multiple selection methods were used including panel interviews, assessment centres and psychological assessments. Eventually a list of potential leaders and specialists were identified to fill future positions planned for the next 3-7 years.

Comprehensive Unit Test – Human Resource Management © 2014 - 2015

SET – A

Nevertheless, cultural and social influences played a key role in talent decisions with the global criteria set for selection being subject to local interpretations. Cross-cultural differences further affected the consistency of the process. Besides, panel members were not always comfortable with challenging one another or voicing negative criticisms because such views can often mean that people “lose face,” which is not acceptable to East Asian cultures. Transferring HSBC’s global HRM approach without making any changes for the local market was painful at times. Past success and ‘best practice” in head office did not automatically guarantee its effective transfer and adoption in local subsidiaries. HSBC found that there was no single management model that can be applied across different cultures and values. HSBC found that, to make an HRM approach work, change in HR practice involved modifying global approaches and blending them with the Asian characteristics. Consequently, there needed to be a greater appreciation of...
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