Choose a real organisation that currently originates and operates in only one non-European country (the home country). As a domestic organisation it is considering internationalising for the first time to the UK (the new host country), and the senior management team recognise the importance of devising effective and strategic HRM organisation-wide policies and practices across its operations as it grows. In order to fully prepare for this process of internationalisation, the organisation needs advice and guidance on how and why HRM policy and practice within the overseas operations may have to be reviewed and revised, and have approached a HRM Consultancy Company for help. As an external HRM consultant prepare a briefing document to the Senior Management Team
Country Comparison of Employment Systems and HRM
The purpose of the study is to demonstrate the revisions that are necessary for a non-European-origin organisation in terms of its HRM policies and practices while expanding into the UK. In the same way, the company selected for completion of this study is Woolworths, which originates and operates in Australia. The organisation must adopt changes in its HRM practices due to differences in culture, both institutional and social.
Woolworths is a supermarket chain based in Australia founded in 1924. The company’s current market share in Australia as of 2019 was 33%, making the organisation the largest in the country. The organisation has a workforce of 225,000 and the number of locations where it is present is 1,051. Most popular products offered by Woolworths include footwear, clothing, beauty products, groceries, financial services and homeware. The organisation’s management structure takes a unitary shape where the board consists of an independent chairman, CEO, lead independent director, executive directors, and non-executive directors (Chin et al. 2023). The retail industry, as well as the sector of supermarket chains, is exceptionally competitive.
Figure 1: Grocery retail sales value of supermarkets in Australia from 2012 to 2022
(Source: Statista, 2023)
The Figure 1 bar graph shows an increase in the grocery retail sales value of supermarkets in Australia from 2012 to 2022. The data shows that in 2021 grocery retail was 96 billion Australian dollars, which increased in 2020 to a hundred billion Australian dollars (Statista, 2023). Grocery sales of supermarkets therefore show an inclination for rise.
2. Comparison of national context
Figure 2: Country comparison of Australia and the UK
(Source: Hofstede-insights, 2023)
Power distance: Both the UK (35) and Australia (38) have a close score for power and distance, indicating that both cultures consider eliminating inequalities as an appropriate approach to managing an organisation and the relation between the management and employees of an organisation. The HRM policies, in practice, therefore, emphasise the element of fair play where the management does not micromanage or try to overpower the employees working under them. This reflects the democratic management style in both countries, hence determining similarity in their HRM and management approach (Hofstede-insights.com, 2023). Nevertheless, Australian society is more inclined to achieve an equal society where hierarchy is developed only for convenience.
Individualism: Australia scored 73 while the UK 76, which again depicts a close range between the two countries. As the score for individualism is high in both nations, the society is identified as loosely connected and individuals are self-reliant. Management and HRM practices in terms of recruitment and appraisal are based on merit and related evidence in both countries. Therefore, the HRM policies in Australia and the UK are fixated on individual employee welfare and development, while the management style is not collectivistic, thereby empowering individual employees. In terms of individualism, both countries are similar (Hofstede-insights, 2023).
Motivation towards achievement and success: Britain with a score of 66 and Australia with 61, both countries identified as decisive societies that are success-oriented. Employees and employers are trying to achieve human potential and success in Australia and the UK. Therefore, organisations originating from these two countries often have multiple skills and employee development programmes to improve the productivity and performance of employees and the organisation. To achieve success, the appropriate management style is the transactional one, which is a reward-based approach. Therefore, it can be determined that Australia and Britain have similar management approaches in terms of motivation towards success achievement.
Uncertainty avoidance: Australia has an intermediate score of 51, while the UK has scored 35. This demonstrates the vast gap in the cultural context between the outlook among Australian and British employers (Hofstede-insights, 2023). With a low score, the UK accepts uncertainty and is inclined to find different or new things attractive. Hence, British organisations have an innovative culture and management approach where the HRM practices are adopting new ideas for boosting the performance of employees. On the other hand, Australian organisations are more balanced and cynical of innovation. Australian organisations are said to exercise both accepting uncertainties and avoiding them.
Long-term orientation: A close range of scores can be observed for the UK (60) and Australia (56). This depicts a similarity in the orientation of both countries that is highly pragmatic. Therefore, the HRM practices in both countries are constantly being modified as they adopt new methods for retaining flexibility to changing conditions (Evangelista et al. 2023). The management style reflects transformational attributes or situational management approaches, as these two pioneers vary based on the environment.
Indulgence: The score for indulgence again reflects the similarity in cultural context between the UK (69) and Australia (71). With high scores for indulgence in both countries, the employees show a higher willingness to gratify those desires and impulses. As organisations recognise this attitude among employees for building more optimism in the working environment, recreational activities, paid holidays and other such elements are incorporated in the HRM policies that allow employees to enjoy leisure time (Hofstede-insights, 2023). The democratic management style also realises employees and tries to address them.
Recruitments and selection: In the UK, recruitment and selection are performed by first defining the knees and requirements of the organisation followed by planning a campaign and searching to attract candidates through either internal or external recruitment. Next, selected candidates are screened, followed by the final list of candidates hired. In UK organisations the recruitment process is often evaluated using employee surveys. On the other hand, in Australia, anthesis is placed on the quality of the job descriptions and advertising it properly through social media (Islami et al. 2023). Partnering with external recruitment agencies is often considered and the candidates can appear for a skills test. Internal Sourcing is also a preferable approach in Australian organisations.
Employee welfare: In Australia, to ensure employee welfare, a few measures adopted by the HR department include paid annual leave, worker’s compensation insurance, parental leave and paid sick leave. Australian labour laws play a strong role in influencing HRM policies and practices. The employee benefits in the UK are like those offered by Australian organisations (Evangelista et al. 2023). Nevertheless, minimum wages, overtime pay and other dominant HR practices in the UK are essential.
Training and development: Both UK and Australian organisations incorporate abundant online training methods in their training and development programmes. This trend has increased since the pandemic and is making development programmes more accessible for employees.
Termination: Australian employers cannot terminate an employee unless they receive written notice of termination on the last day. These statutory entitlements need to be paid to the Employees, including annual leave wages and more. Termination of employees is possible only under circumstances of serious misconduct. The domination must be consistent with the employment contract terms and failure to do so is considered a breach of the contract. In the UK, the standard statutory minimum notice period is relative based on the period an employee has worked with an organisation (MD, 2023). Even in the UK, an employee is entitled to a written notice from the organisation and the grounds for dismissal must be mentioned.
- Form of government, political ideology and economic system
The UK Government has a parliamentary system with a unitary state and constitutional monarchy. The political ideology is liberal democratic and the economic system reflects a social market economy, which is also highly Pro-capitalistic. UK organizations have adequate autonomy to control the operations and systems if they comply with the UK Corporate Governance Codes 2018 and other legislations. However, the labour laws in the UK are not as prominent as in many other parts of the world, giving the employer more power. UK-based organisations manage their people autonomously while facing legal disputes with the government (Evangelista et al. 2023).
Australia is a representative democracy with a parliamentary system and constitutional monarchy. The political system in Australia is a stable democracy, which is its political ideology and it has a mixed economic system. Since Australia is officially a Commonwealth, there are multiple similarities between HRM practices in the UK and Australia following the similarities in the political and economic systems. Therefore, it can be stated that the Australian government monitors the operations of organisations and needs these organisations to comply with the legal Framework in the country to avoid legal disputes (Demo et al. 2022). If the organisations comply with the legal structure, they can autonomously manage the organisation without much interference from the government.
- Regulatory legislation
The Employment Rights Act 1996 in the UK requires employers to keep written documentation of protocols and particulars. As a result, while dealing with HRM issues, the company’s management must refer to the employee handbook containing documents on grievance rules and disciplinary procedures. This makes the process more seamless and fairer. The Fair Work Act 2009 in Australia determines the minimum standards of employment conditions and entitlements for Australian employees. The rights and responsibilities of employers and employees are consistently documented, along with unions or other employee organisations (Noopur and Rajib, 2020). HR practices, therefore, have more clarity on activities that should be avoided as they are considered a violation of minimum standards of employment conditions and entitlements.
- Protective legislation
Model WHS Act in Australia is a legislation that protects employees in their workplace as employers are required to eliminate minimum risks. Due to this legislation, employees working in Australian organisations have access to fair and effective representation within the organisation—the UK Health and Safety at Work etc. Act 1974 delivers occupational health and safety to employees. Due to this protective legislation, HRM policies need to emphasise establishing safe working conditions for employees (Wickramasinghe and Chathurani, 2021).
- Policy affecting labour markets
Equality Act 2010 in the UK protects employees from discrimination and unfair treatment in organisations. HR policy has special division and punishment protocols for objections like discrimination in their organisation. Sex Discrimination Act 1984 in Australia also provides similar protection to employees. Labour markets have become diverse because of such policies and their impact on HRM (Wickramasinghe and Chathurani, 2021).
- Power, scope and influence
|Meet their needs
|In the UK: State
In Australia: State
|In the UK: Employers
In Australia: Employers
|In the UK: Employees
In Australia: Employees
|LOW Interest HIGH
Table 1: Power and Influence of Stakeholders
In the employment relationship, most leverage is enjoyed by the employers as they are the key players; the state has power but less interest, while on the other hand, the employees have more interest and less power to influence the organisation. This conduction is the same in both the UK and Australia
- Diversity and inclusion management
The employee workforce in the UK has a distinct culture compared to the Australian culture; therefore, modifications are required in the diversity and inclusion management of the company. The existing workforce of the company must be trained to become culture-sensitive as part of diversity and inclusion management and it is also important as Australian culture has an intermediate score for uncertainty avoidance (Evangelia and Myloni, 2023). The inability to incorporate this activity will result in unhealthy working conditions for both the Australian and British employees at Woolworths.
- Health and well-being
Health and well-being are important factors for the UK Government that it monitors in business organisations; hence, the health and well-being HRM practices in policies must be updated and modified to match the standards required by the UK Government. The inability to comply with the health and well-being standards will result in a bad reputation and legal disputes for Woolworths (Frank Nana, 2019).
- Recruitment and selection
During internationalisation into the UK market, it is suggested that external recruitment is adopted as this will allow the company to recruit employees and people in the company’s management from the UK labour market. As a result, diversity in the workforce will increase which can minimise cultural conflicts (Evangelista et al. 2023). Inability to do so may increase the risk of discrimination in the company which the UK government prohibits.
To achieve successful internationalisation into the UK market, Woolworths first determines the differences and similarities between the cultural context, followed by the evaluation of the power and influence of the state in both nations. Based on the analysis, the suggestions for modification to the existing HRM policies and practices in Woolworths are provided. The proposed areas that require modifications in terms of HRM practices are diversity and inclusion management, health and well-being and recruitment and selection.
Chin, T.L., Yean, T.F. and Leow, H., (2023). Ability, Motivation and Opportunity (AMO)-enhancing HRM Practices and Corporate Environmental Citizenship: The Mediation Effect of Organizational Ethical Climate. Jurnal Pengurusan, 67, pp. 1-14. doi: https://doi.org/10.17576/pengurusan-2022-67-01
Demo, G., Neiva, E.R., Coura, K.V., Júnior, S.G. and Costa, A.C.R., (2022). Do Organizational Virtues Enhance Work Well-being? The Mediator Role of HRM Practices. Revista de Administração Contemporânea, 26(6), pp. 1-16,I-II. doi:https://doi.org/10.1590/1982-7849rac2022200144.en
Evangelia, P. and Myloni, B., (2023). Socio-cultural dimensions, employee-related assumptions and HRM practices-a multivariate model in a cross-national setting. Cogent Business & Management, 10(1),. doi:https://doi.org/10.1080/23311975.2023.2197157
Evangelista, P., Kianto, A., Hussinki, H., Vanhala, M. and Nisula, A., (2023). Knowledge-Based Human Resource Management, Logistics Capability, and Organizational Performance in Small Finnish Logistics Service Providers. Logistics, 7(1), pp. 12. doi:https://doi.org/10.3390/logistics7010012
Frank Nana, K.O., (2019). Human resource management (HRM) practices and organizational performance: The mediating role of employee competencies. Employee Relations, 41(5), pp. 949-970. doi:https://doi.org/10.1108/ER-02-2018-0053
Hofstede-insights (2023). Country comparison tool. [online] www.hofstede-insights.com. Available at: https://www.hofstede-insights.com/country-comparison-tool?countries=australia%2Cunited+kingdom.
Islami, X., Latkovikj, M.T., Drakulevski, L. and Popovska, M.B., (2023). DOES COMPETITIVE STRATEGY MODERATE THE LINKAGE BETWEEN HRM PRACTICES AND COMPANY PERFORMANCE? Management: Journal of Contemporary Management Issues, 28(1), pp. 45-63. doi:https://doi.org/10.30924/mjcmi.28.1.4
MD, S.H., (2023). Integration of social media into HRM practices: a bibliometric overview. PSU Research Review, 7(1), pp. 51-72. https://doi.org/10.1108/PRR-12-2020-0039