Nowadays is common to hear that the trend of business world is located in Emerging Markets, therefore most of the biggest and important companies in the world are startin to enter to those undeveloped economies that have a great potential. Develop assertive HRM practices in those new markets are key issues in order to achieve the expected success. The international human resource management models developed in the last decade pursues a contextual analysis of the standardization (global integration) of multinational parent companies' human resource management policies and practices and localization (local differentiation) of host countries practices.(Stevens, 2012) In order to have effective results within the Human Resources in the new market, the design and development of the HRM strategies (of local units) must incorporate some aspects of local practices. The main challenge for the companies (and the ideal context) is to find a balance between the practices of the business culture in the host country and with the one of the home country. Novo Nordisk a Danish practices which started operations in Mexico in 2004, it is an interesting case that provides a clear example about how to get that ideal equilibrium between standardization and localization.
ii.Questions and anwers
1.Given the Mexican and Danish business cultures, what are the most important HRM challenges faced by Novo Nordisk Mexico? What does the company need to do to succeed? Novo Nordisk faces a pretty different cultural context between the Mexico and the Company´s philosophy (influenced by the Danish culture), the big dilemma is how to balance those several differences and find out the way to design HRM practice and policies that are efficient and effective. Regarding the HRM practices in Mexico, “despite the implementation of “modern” HRM policies, Mexico present particularities in the HRM practices deeply rooted in the Mexican law, which reflects consequences of an historical unfair system to the workers. After the time of the "hacendados" Mexican law were focused to protect both rights from employees and employers but it was most aimed to pursue and ensure the dignity and well sake of the workers, in order to avoid abuses from the “bosses”. Despite this historical background, nowadays there are still some contradictions in the law, that enhamce some discrimination. In order to describe briefly the main differences between the two cultures, its necessary to take into account two of the five cultural dimensions of Hofstede: Power Distance and Individualism vs collectivism provide a clear framework to understand the discrepancies. Mexican culture has a Strong hierarchy and high power distance which is reflected in a paternalistic/Autocratic management style. Employees are used to demonstrate “loyalty, submission and respect” and they practice boss workship “culto al jefe”. In contrast the Danish company has a flat structure in the organization and they expect an open communications creativity and high participation in the decision making process. Source image: (Hofstede, 2012)
In the other hand, Mexican culture is collectivist and it is reflected in the fact that they see the company as an extension of their family, “Employer / employee relationships are perceived in moral terms (like a family link)”, they respect the boss as it would be the paternal figure and therefore, they expect to receive protection, and that the company cover their basic needs, (they pay back with obedience loyalty and submission) Novo Nordisk is a company that looks for employees with a high level of commitment in order to apply their own slogan ““Changing the world of diabetes: Employees make a difference for people with diabetes worldwide”, then is hard to reach this objective in Mexico, where there are some many differences in the culture that doesn’t enhance high communication,...