Hrm Issues in the Premium Oil and Gas Case

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This essay is based on the Premium Oil and Gas Company (POG) case study. POG, as a global, company is functioning in diversified business environment. It causes in fact, a necessity to deal with varied internal and external environmental issues, that occur within the company. Internal business environmental issues are in control of the enterprise. External business environmental issues, on the other hand, are driven by factors, that are beyond the control of the company (e.g. legal issues). According to the executives, POG company aspires to become a truly global enterprise, known for its modern and meritocratic management, supported by outstanding learning organisation. Nevertheless, some major issues can be found at all levels where company operates. This paper is focused on POG strategic issues, related to human resources management (HRM) and is divided into three parts. The first section of this paper provides a brief overview of the company aims and outlines the essay scheme. The following section indicates and analyses two main HRM issues, related to POG case, including general justification of the choice made. At the same time, a series of recommendations for POG is provided, before conclusions will be presented in the third part. Two main issues defined by the author refer to communication and knowledge sharing aspects. In general, one of the most significant platforms for company issues to arise are the culture differences between co-workers. Since internationalisation strategies started being implemented by enterprises on a large scale and the number of multinational companies grew rapidly, also multicultural issues have become the substantial matter to deal with. For POG case, where westernized culture of the headquarter is confronted with eastern way of thinking in Azeri subsidiary (Hercules Meets Buddha), communication issue can be named as one of decisive factors affecting organisational side of the company. The main role of organisational communication (Elving, 2005) is to inform clearly employees about their responsibilities, as well as about company policies and issues. Secondly, communication leads to a better integration and community creation. Hancock and Zayko (1998) also indicate the importance of communication, whereas its lack often provides with resentments between employees. The communication levels in POG may be distinguished between Azeri employees (trainees) and their trainers/colleagues from headquarter, as also between Azeris within their group, what manifests itself in teamwork tasks. The most appropriate theoretical framework to analyse the communication issues in POG seems to be the concept of Hofstede’s five cultural dimensions (Hofstede, 2001) in relation to Azeri national culture. First dimension in this model refers to uncertainty avoidance, explained by Hofstede (2001, p.161) as “The extent to which the members of a culture feel threatened by uncertain or unknown situation”. In relation to POG case, there is a strong alienation, suspiciousness and reluctance of Azeri trainees to westernized corporate culture. These types of behaviour seem to be typical reaction on culture shock. In result, high level of uncertainty avoidance successfully reduces the efficiency in communication between them and their western colleagues. The second, and one of the most important dimensions in context of communication is power distance. Mulder (1977) as cited in Hofstede (2001), explained the meaning of power distance by comparison of power determinacy, which is unequal between less and more powerful members of a particular system. Countries like Azerbaijan, exhibit a high degree of power distance, which means that its citizens are a hierarchical society. As a consequence, several problems can be observed in POG communication skills trainings. Firstly, Azeri trainees are afraid of asking questions, as lack of knowledge is seen by them as humiliation. Moreover, there is a strong resistance of...
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