Cultural Differences and Problems with Quality: Challenges for Human Resource Management in the Automobile Industry

Abstract

CARM, the automobile company that affiliates manufactured automobiles and related parts across more than 35 companies located in 21 different countries worldwide, faced a problem with car quality in 2007-2009. The case discusses advantages and limitations of the existing human resource management practices and corporate values that may cause problems with quality. Were the main reasons for quality problems due to human error and lack of employee engagement? The case suggests finding possible improvements for existing human resource practices in order to avoid such situations in the future.

This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.

2024 Sage Publications, Inc. All Rights Reserved

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Resources

Exhibit 1. Cross-Cultural Differences in HRM Practices in Asia and in the USA

HRM practices

USA

Asia

Recruiting

  • Client focused
  • Large candidate pool
  • Client willing to wait for the “exact fit”
  • Higher standards of selectivity
  • Companies seeking specialists (in the narrow field)
  • Candidate focused
  • Small candidate pool
  • Client accepting “close fit” candidate
  • Pressure to develop candidate networks
  • Recruitment of younger employees, on average, due to Japanese principle of “work-for-life”
  • Japanese companies in general seek more candidates with much broader background

Training

Extensive “prior work” education, in-house and out-of-house learning

Learning through experience at work, in-house trainings

Performance measurement

  • Performance evaluation and feedback are two of the most important items in a North American manager’s toolkit
  • Promotion based on performance
  • Performance measurement and quality checks are constant
  • But promotion is not directly connected to the performance, instead more to years spent in the company (however, the situation is starting to change slightly at present)

Rewarding

  • Competitive payment and bonuses
  • Rewards for individual excellent results
  • The gap between the highest and minimum salary in the company can be huge
  • The use of seniority comparison for pay and promotion
  • Rewards for group excellent results
  • The gap between the salaries is smaller

Leadership development

  • Strong leadership
  • Leadership and direction tend to come from upper management
  • Consensus decision-making, spread/shared leadership

Risk assessment

  • More risk-taking on average
  • Less risk-taking

Retention

  • Turnover rate is very high compared to Japan
  • Retention is based on attractiveness of the company as an employer (which is formed by type of job/tasks, working conditions, remuneration, and possibility to develop and climb the career ladder)
  • Long-term employment is not just attractive but highly desired and aspired
  • HR experts estimate that as many as 80% of the workers in Japan are given lifetime employment
  • Retention based on loyalty

Corporate culture

Competitive (market) culture

Collaborate (Clan) culture

This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.

2024 Sage Publications, Inc. All Rights Reserved

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