Norge Electronics Case Analysis

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Joao Silva considered VP HR to be an “ideas” man. The initiatives and processes, like for an example the job evaluation system, that seem to work in Norway, were implemented without being changed or adapted. Nor Joao, nor VP HR took into consideration the huge difference in the national cultures of the two countries. Geerth Hofstede studies on Cultural Dimensions show that Norway and Portugal differ a lot in 5 of the dimensions and have similar results only in long-term orientation. Based on the cultural characteristics of Portugal where the individualism score is very low 27 (compare with 69 in Norway) pay systems based on individual performance will not be workable and accepted. Joao introduced a pay for performance system which even was not communicated to the employees. The two countries differ also a lot in uncertainty avoidance- 99 in Portugal vs 50 in Norway. The high level of uncertainty avoidance related to need for security and resistance to innovation and risk taking needs to be taken into consideration when the HR policies are being implemented in Portugal. The lack of congruence between any management practice and the local culture is one of the reasons why this management practice fails (abstract from Newman & Nollen’s study “Culture and Congruence: The fit between Management Practices and National Culture”). The very low results that Joao got in the survey confirms the above stated conclusion.

Other reason why Joao got these unsatisfactory results from the survey is the fact that he is a type of a manager that view people as costs rather than sources of innovation and creativity. He described the goal of his project “Dynamic HR” as “Equipping the firm with the stocks of human resources needed to face the challenges ahead”. Doing an employee personal P&L statement seems too much numerical, figure based approach. An approach that only an ex Finance manager can invent. Although it looks innovative, this approach links performance only with financial results without taking into considerations other aspects of employee’s performance. To assess employee’s performance at least three dimensions must be considered: achievement of business, behavioral and developmental targets.

Conclusion – what Norge has to do next?

Joao Silva‘ presentation in Oslo definitely will be a difficult one. The VP HR has to reconsider his comment that Joao was „doing a lot HR in Portugal“. No doubt Silva really did a lot and he did well by introducing and implementing some very important HR processes that were needed in the company – legalize the pay system, fixing the organizational structure, adding staff, clarifying responsibilities. However the climate survey results questioned his performance (lowest scores of remuneration and HR policies). Norge is an ambitious company (80 %) having an unique identity (80 %). It is customer oriented thus it needs empowered employees that are proud to work for Norge and that work in synergy. Unfortunately the survey showed low scores in empowerment (43%), synergy (35%) and also in management style (43%). These are areas that need to be addressed by relevant HR initiatives. Training and development programs have to be employed for all staff members and technicians to be trained on customer relations, budgeting, teamwork skills and persuasion.

I would recommend that Joao Silva will be realeased from his duties as a personnel executive. Even though he may change and adjust the HR policies to the local culture, he would not be able to change his personality and his conflict style. A new member of the team to lead the personnel function must be recruited. The job evaluation system, job grades and Results evaluation system need to be adjusted and well communicated in order to bring the desired results. It is also very important that all the stakeholders must be involved when such important policies are being developed.

In order to achieve better business performance and to provide successful implementation of any management practices, the companies need to adapt them based on the national culture.

References:

McGuire, S. J. (n.d).Norge Electronics(Portugal), S.A

Thomas, Kenneth W.(1976) Conflict and Conflict Management

McGuire, S. J. (2008). Managing Change in Nonprofit Organizations. Georgetown University Press

Geert Hofstede official site- https://geert-hofstede.com/portugal.html

Abstract from Newman, Karen L.; Nollen, Stanley D. Culture and Congruence: The Fit between Management Practices and National Culture (1996)

Appendix:

Chart 1

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