This Report Is a Collaborative Effort Of: Iqra Khan Sidra Ghazanfar Zoya Chaudhry Kokab Khalid Mudassir Khalid

CULTURALLY COMPATIBLE HUMAN RESOURCE

STRATEGIES

(MB-08-12)(MB-08-16)(MB-08-06)(MB-08-20)(MB-08-61)(MB-08-75)(MB-08-33)

Sher Afghan Faizan

REPORT SUBMISSION

With Due Respect We the Group Members Submit This Human Resource Report to Our Instructor of Human Resource

ManagementMadam Bushra Baig

TABLE OF CONTENTS

Preface…………………………………………………………………………………..…..4Culture…………………………………………………………………………………..…..5Organizational structures for global business…………………………………………....…5.Cultural compatibility & HR…………………………………………………………..…....8Globally oriented culture………………………………………………………………..…..9Globalization vs. cultural identity………………………………………………………..…11Cross-cultural differences and HR…………………………………………………….……13CASE STUDY- conflict resolution strategies of Canadian and Chinese executives ….......17.CASE STUDY-German industrial enterprises………………………………………….….18

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CASE STUDY- leading Chinese telecom corporation – Huawei………………………….21Implementing global HR strategies……………………………………………………..….24Cross-cultural competent HR…………………………………………………………..…..25Effective HR strategies in globalization……………………………………………………26References………………………………………………………………………………..…28Report: culturally compatible HR strategies of TELENOR…………………………….….34Company profile…………………………………………………………………………….35Vision & core values of Telenor………………………………………………………...….36Organizational structure……………………………………………………………….....…37HR department of Telenor……………………………………………………………….…37Global presence…………………………………………………………………………….38Cultural compatibility in Telenor…………………………………………………………..40Culturally compatible HR strategies of Telenor……………………………………………46Challenges………………………………………………………………………………….48Conclusions…………………………………………………………………………………49Comments……………………………………………………………………………….….49Recommendations…………………………………………………………………………..50Our visit………………………………………………………………………………….…51

PREFACE

This report reviews the Human Resource Management (HRM) of Telenor, the second largest telecom company in Pakistan.

We give a brief history of the company and tell about the corporate human resource of Telenor primarily in Pakistan. It

put light on the culturally compatible HR strategies of the organization around the globe. Telenor is a multinational

company that has set up its operations in Europe and Asia. This report puts light on the specific Hr strategies, policies and

practices of Telenor that makes it culturally compatible in different nations. We start our consideration with the

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theoretical knowledge of culturally compatible HR strategies giving some real life case studies of leading multinational & transnational organizations. In the end we conclude with our

recommendations for global organizations.

CULTURE“Culture is the customs and civilization of a particular people or group”

CULTURAL COMPATIBILITY“It is the capability of different cultures to live together harmoniously.”When an organization goes global and sets up its operations in some other country, it faces a totally different culture of that particular location. This local culture is their in the attitudes, work styles, demands and perceptions of the local human resource. A globalizing organization thus has to make its home culture compatible with the local culture in order to survive in the local market. The new transnational environment requires a plethora of individuals who can work internationally – who are ultimately flexible, accommodating, and adaptable to different cultures and varying ways of doing things. Those organizations who effectively pursue culturally compatible HR strategies actually achieve success in long-run.

Studies on the success or failure of individuals in an international setting have indicated that American expatriates experience a failure rate of 30 to 40 percent as compared to many Europeans and Japanese, whose failure rate has been estimated as low as six percent (Tung 1988). It appears that some countries or cultures are more effective at producing successful global professionals than other countries.

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ORGANIZATIONAL STRUCTURES FOR GLOBAL BUSINESS

There are 4 main organizational structures for global business:

1) Domestic exporter - heavy centralized activities in one country (financing, sales, marketing, human resources, strategic management) while sales are dispersed using agency agreements, and subsidiaries that are reliant on the home company. i.e. Caterpillar Corp.

HR STRATEGY:

Domestic exporters just have to rely on the sales staff of local area; therefore they adjust the HR policies regarding the pay scales, skills required and evaluation for sales personnel only.

2) Multinational firm - control and management of finances out of central home base, while production, sales and marketing operations are in other countries. Products are made to fit local markets i.e. financial firms, General Motors etc

HR STRATEGY:

Multinational firms have to set their HR strategies for the employees of all departments according to the culture of respective firms. Here the budget of the firms is being set in home base while the pay scales as well as incentive plans & benefits are the core discretions of national firms.

3) Franchisers - product is created, designed and financed in home country, but for product-specific reasons, there is a heavy reliance on foreign personnel for production, marketing, and human resources. i.e. McDonald's, KFC

HR STRATEGY:

Franchisers are just like multinational firms with the only difference that multinationals create the whole separate set up for all national campuses while the franchisers follow the strict policies and strategies of HR being pre-set by the home base.

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However franchises may carry out specific HR plans as per the local cultural adjustments but within a restricted provision of base.

4) Transnational firms - have no national home base, have several regional home bases, and optimize supply and demand constraints locally, central core for decision making, but dispersed power and financial power to the divisions. i.e. Citicorp, Sony, Ford

HR STRATEGY:

Transnational firms retain the freedom of decision-making in determining its own HR strategies. Such strategies follow the cultural adjustments in the best interest of company. Such HR strategies are fully coated with local cultural essence that gives the firm a new home environment.

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CULTURAL COMPATIBILITY AND HUMAN RESOURCE MANAGEMENT

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Human resources or, as some would call it, human capital, is becoming the most important asset for most organizations in the world. As the New Economy pervades in the world’s communities and organizations, it becomes necessary to study and pay close attention to the impact of Globalization and Technology in shaping today’s strategy for managing culturally diverse human resources.

Globalization has resulted in significant implications for HR functions as they attempt to develop global HR strategies and design programs and

processes to manage a global workforce. The key to success is to balance global standardization and local autonomy.

The challenge for Human Resource leaders is really to understand the role of Human Resource Management in an organization competing in a global business environment and effectively define the critical issues and responses necessary in implementing a strategic Human Resource Program.

Studies on the success or failure of individuals in an international setting have indicated that American expatriates experience a failure rate of 30 to 40 percent as compared to many Europeans and Japanese, whose failure rate has been estimated as low as six percent (Tung 1988). It appears that some countries or cultures are more effective at producing successful global professionals than other countries.

Moore (2003) argues that there are 10 countries that produce the largest number of “good” global managers: Canada, the Netherlands, Switzerland, Belgium, Ireland, Sweden, Denmark, Singapore, Australia, and Finland. According to Moore, what these 10 countries have in common is their size. While they are not dominant powers in their geographic regions, they are considered significant players on the international stage. These middle-

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economy countries face the everyday reality that they are not the most important culture in their region and thus they find themselves constantly negotiating between their own culture and identity and that of surrounding dominant cultures. In order to be successful, individuals growing up in mid-sized countries learn to embrace multiple ways of looking at the world. They grow up with a duality (or plurality) that obliges them to work effectively with their neighbors. It is this ability to be “all things to all people” that helps such individuals to be successful in a global context. “When working on global teams or in other countries, the ability to think outside your own culture and see an issue through the eyes of another is critical to success” (Moore 2003)

In the field of psychology considerable work has been conducted on people’s sensitivity to intercultural issues and their ability to adapt to other cultures and different ways of doing things. Some organizations have moved to personality testing to better ascertain the likelihood of success of individuals working in an international environment.

GLOBALLY ORIENTED CULTURE

Much has been written on the influence of culture and global orientation on business. These “deeply ingrained assumptions, generalizations, or … images that influence how we understand the world and how we take action.”An ethnocentric mindset is one that basically holds one’s own values, beliefs, and culture are intrinsically superior to those of others. Ethnocentric individuals interpret the world through the eyes of their own culture, not recognizing, even devaluing, cultures that are different from their own. “If it works here, it’ll work anywhere,” exemplifies the ethnocentric individual. Ethnocentric can play an important role in preserving standards and uniformity across the global corporation.

A polycentric mindset is one that adapts and assimilates to the values, attitudes and beliefs of another culture. Because they are highly attuned to the conditions and expectations of other cultures, polycentric individuals can play the role of empathetic “advisors,” effective at bridging the gap and transferring knowledge between the local environment and corporate. The danger with the polycentric mindset is the tendency to “go native”, sometimes to the detriment of the organization’s objectives.

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A geocentric mindset is one that believes there are certain cultural universals and commonalities in the world and that no culture is superior or inferior to another. “The geocentric mindset accepts the premise that bright people [do] bright things around the world” (Sullivan 2001). Also called “cosmopolitans,” these types of individuals focus on “finding commonalities and spreading universal ideas and juggling the requirements of diverse places” (Kanter 1995).

GLOBALIZATION vs. CULTURAL IDENTITY

It is fair to say that the impact of globalization in the cultural sphere has, most generally, been viewed in a pessimistic light. Typically, it has been associated with the destruction of cultural identities, victims of the accelerating encroachment of a homogenized, westernized, consumer culture. This view, the constituency for which extends from (some) academics to anti-globalization activists (Shepard and Hayduk 2002), tends to interpret globalization as a seamless extension of – indeed, as a euphemism for – western cultural imperialism.

Into this world of manifold, discrete, but to various degrees vulnerable, cultural identities there suddenly burst (apparently around the middle of the 1980s) the corrosive power of globalization. Globalization, so the story goes, has swept like a flood tide through the world’s diverse

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cultures, destroying stable localities, displacing peoples, bringing a market-driven, ‘branded’ homogenization of cultural experience, thus obliterating the differences between locality-defined cultures which had constituted our identities.

WEST VICTIMIZING EASTERN CULTURE

Though globalization has been judged as involving a general process of loss of cultural diversity,some of course did better, some worse out of this process. Whilst those cultures in the mainstream of the flow of capitalism – those in the West and, specifically, the United States – saw a sort of standardized version of their cultures exported worldwide, it were the cultures of the developing world that have been most threatened. Thus the economic vulnerability of these non-western cultures is assumed to be matched by a cultural vulnerability.

GLOBALIZATION PROLIFERATES CULTURE

Cultural identity is at risk everywhere with the depredations of globalization, but the developing world is particularly at risk. But another, quite contradictory, story can be told: that globalization, far from destroying it, has been perhaps the most significant force in creating and proliferating cultural identity. To take just one example, Manuel Castells devoted an entire volume of his celebrated analysis of ‘The Information Age’ to the proposition that: ‘Our world and our lives are being shaped by the conflicting trends of globalization and identity.’ For Castells, the primary opposition to the power of globalization lies in ‘the widespread surge of powerful expressions of collective identity that challenge globalization on behalf of cultural singularity and people’s control over their lives and environment’ (1997: 2). Far from being the fragile flower that globalization tramples, identity is seen here as the up surging power of local culture that offers resistance to the centrifugal force of capitalist globalization. The impact of globalization thus becomes, more plausibly, a matter of the interplay of an institutional-technological impetus towards globality with counterpoised localizing forces. The drive towards globality combines logic of capitalist expansion with the rapid development of deterritorializing media and communications technologies. But this drive is opposed by various processes and practices expressing different orders of ‘locality’.GLOBAL-LOCAL CULTURAL STRATEGY OF HR

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In a global-local strategy, cultural differences amongst employees can be seen as a strategic advantage for cross-border learning capabilities and the flexibility of the company.This policy can be summarized as follows:

“As much global integration as possible, as much local adaptation as absolutely necessary.”

Hewlett-Packard manager illustrated the direction in one sentence:

“We want one solution for the world rather than 54 country solutions. We optimize at the company rather than the country level.”

IBM, on the other hand, values a regional differentiation in their human resource policy. They believe in making exceptions, in flexibility in the area of deployment even as far as differentiated standardization:

“This is the span needed to bridge the political and cultural gaps,especially between westernized corporate cultures and Asian country

cultures” (Begley/Boyd2001).

CROSS-CULTURAL DIFFERENCES AND HR

A growing body of research has emerged over the past decade looking at cross-cultural differences in negotiation style [Fisher 1980; Tung 1984]. These studies conclude that people of different cultures use significantly different negotiation approaches. These different approaches include:

communication styles used Persuasion strategies employed Protocols followed.

CROSS_CULTURAL CONFLICTS:

Negotiation studies all point to possible differences in the way conflict is viewed and managed, little attention has been paid to differences in reacting to cross-cultural conflicts in negotiations. Yet, the handling of conflict is critical to any effective cross-cultural negotiations.

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When two parties negotiate in a joint project, buyer/seller relationship or any other business context, conflict inevitably arises [Habib 1987]. It may arise because of differences in the perceptions of the decision making environment, or preferences for particular actions, behavioral styles and/or goals between the parties [Fisher 1974]. How the parties respond to conflict also depends on a number of factors, including the nature of the conflict, the cultural orientation of the individuals, and the affiliation of the parties. It is clear that how the parties perceive, respond to, and choose to resolve conflicts is critical to the success of any long-term business relationship. Individuals from different cultures are known to adopt different conflict resolution strategies. Ting-Toomey [1988] proposed that members of collective cultures perceive and manage conflict differently from those in individualistic cultures.

INTRA- VERSUS INTER-CULTURAL NEGOTIATION STRATEGY

There is no consensus on whether decision makers extend their domestic negotiation styles to negotiating with cross-cultural partners. Managers may assume different negotiation styles with parties of another culture to seek greater cooperation [Graham 1985].

When dealing with members of a foreign culture, a manager may try to adopt behavioral patterns similar to the other party. The negotiators who appear similar may be more attractive to the other party and, thereby, enhance the bargaining outcomes (see review by Evans [1963]; Rubin and Brown [1975], and Francis [1991]). A business deal is a business deal, and profit maximization knows no cultural boundaries.

DEVELOPMENTAL MODEL OF INTERCULTURAL SENSITIVITY

Milton Bennett’s Model of Intercultural Sensitivity provides a useful roadmap for understanding the acquisition and maturity of individual cultural awareness. and global orientation. Bennett (1993) postulates a development progression that that all individuals go through as they develop into geocentric or cosmopolitans (see Figure 13). As individuals mature globally, they move from the “ethnocentric” stages of denial, defense, and minimization to the “ethno relative” stages of acceptance, adaptation, and integration. Other empirical work has demonstrated that the more international experiences individuals have, the less ethnocentric they become (Guy and Beaman,

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forthcoming). Hence, associates who have reached the ethno relative stages of their individual development – those with geocentric mindsets – are vital for the new chaordic, Transnational HR organization to function effectively.

COLLECTIVISM/INDIVIDUALISM

The differences between the Chinese and North American culture are well documented.

COLLECTIVISM:

The Chinese culture is collective and of "high context." Collectivism emphasizes group harmony and interdependence. Chinese negotiators dislike taking the initiative and normally pay

more attention to maintaining a harmonious relationship When successive efforts within the inner circle fail, the conflict is

likely to be met with resolute force by the authorities PRC executives were also found to be more dichotomizing (i.e.,

inclination to classify the world into extremes-black or white, evil or good

In their decisions, more likely to consult their superiors motivation for favoring certain norms over others is also driven by

cultural factors Societal norms are known to reward those who subscribe to them

and punish those who deviate

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HR STRATEGIES In two-person, buyer-seller simulations, it is more effective to use

competitive (domineering) strategies to negotiate with Chinese. avoid open conflict, and when a conflict emerges, it must be

resolved in inner circles before it becomes serious enough to justify public involvement.

avoid potential conflicts and smooth over issues. use delaying tactics use more obliging and avoiding conflict resolution styles maintain relations as key motivators in their negotiation strategy

INDIVIDUALISM: The North American culture is individualistic and of "low context” Individualism emphasizes individual rights and independence. American negotiators tend to be authoritative, autocratic and in a

hurry to make a deal American executives are less dichotomizing less decisive American executives emphasize personal motivations (Self-

Esteem, Position In Company) or situational explanations as key motivators

HR STRATEGIES in two-person, buyer-seller simulations, it is more effective to use

problem-solving integrative strategies to negotiate with Americans use less obliging and avoiding conflict resolution styles show more concern for goal achievement individuals be responsible for all decisions by themselves. Turning to superiors for instruction on ordinary conflicts, particularly

task-related conflicts could signal incompetence at one's level of responsibility

Here, a case study on conflict resolution concerning Chinese and Canadian culture would more elaborately describe it.

CASE STUDY: CONFLICT RESOLUTION STRATEGIES OF CANADIAN AND CHINESE EXECUTIVES

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Executives from two cultures-Canadian and People's Republic of China (PRC)-were asked to respond to conflict in the context of a joint project negotiation scenario. They responded under two conditions-when the potential partner firm was from their own culture and when the firm was from the other culture. Each executive evaluated potential partner firms that would likely cause two different types of conflicts- "person" related and "task" related-using in-basket decision scenarios.

The study used a 2 (Country: Canadian and PRC executives) by 2 (Culture-Intra versus Inter-cultural) by 2 (Conflict: Person-related versus Task-related conflict) experimental design. This study differs from existing literature by studying: (1) How executives from collective and individualistic cultures react to conflicts in joint projects(2) How intra- and inter-cultural negotiations differ(3) How person-related and task-related conflicts generate different resolutions by executives of collective and individualistic cultures

CONCLUSION This study confirms that home culture orientation (collectivism versus individualism) affects executives' responses to conflicts. Executives from countries which differ in this cultural dimension tend to adopt different strategies to resolve conflict, develop different expectations about possible outcomes, and be motivated by different causes.

The collectivist/individualist orientation was also found to affect social rules used to maintain group harmony. A superior is responsible for maintaining an effective balance between subordinate human relationships and corporate goals, and in China the superior/subordinate relationship usually has been. This study found that being from a different culture does not place one in a disadvantageous position in negotiation. Executives from both PRC and Canada used the same conflict resolution strategy and were motivated by the same underlying factors regardless of the culture of the potential partner. While this may put international negotiators somewhat at ease, by lending support to the globalization of business norms, the finding may be situation specific.

This study found that person-related conflicts elicit different responses compared to task-related conflicts. Regardless of culture, person-related conflicts seemed to invite negative, more relation-oriented (versus information-oriented) responses, and appeared to be less

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satisfying, if more controllable, than task-related conflicts, treated with caution. Executives from different cultures may tend to assume different strategies during such processes.

CASE STUDY: GERMAN INDUSTRIAL INTERPRISES

A few years ago it was typical to give one’s subsidiaries a free rein and send managers overseas from headquarters only. But today a great deal depends on overcoming this one-way street and in looking for and employing the best-suited managers, regardless of their origins. What contributions can human resource management make towards a company’s global orientation – an area in which local scope and latitude are traditionally very high.

This is a study on German industrial enterprises named “DEVELOPING GLOBAL HUMAN RESOURCE STRATEGIES” by Hans-Erich Mueller. It shows that in recent years German industrial enterprises have re-aligned the management of their executive staff. Cornerstones of this quiet revolution are a policy of worldwide parity of executives in evaluation, remuneration and development, greater participation of those with line responsibility from product areas and regions in strategic development, as well as a re-alignment of human resource instruments. Worldwide standards in human resource policy are key factors in the competition for qualified managers. Not only companies, but also executives need to adjust.

“Do you have worldwide HR policies, that is, policies that apply to all employees regardless of location?”

This is one of the central questions underlying interviews with HRM executives of the twelve largest German manufacturers, which took place between the summer and fall of 2000. This includes the largest German companies excluding trade, banking and insurance, as well as energy suppliers according to the Business Week Global 1000, 12 July 1999

GLOBAL INTEGRATION :

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The same worldwide standards for senior management in evaluation, compensation and development are the milestones en route towards a global human resource strategy, which has only caught on in recent years at German companies like BASF, Bayer, DaimlerChrysler, Henkel, Lufthansa, SAP, Schering, Siemens, and Volkswagen.

Henkel sees itself as a leader in human resource policy, both within and beyond its own areas of business, one which brings about more equality of treatment and fairness, so that qualified executives can commit themselves to the company and participate in its success.

Deutsche Telekomand Preussag (the former steel manufacturer-turned tourism giant), who have recently become more international in their orientation, are just now in the process of preparing themselves for a cross-border, integrated human resource policy. The autonomy of the newly purchased overseas companies has been substantial so far. Bertelsmann, where deployment has traditionally been decentralized, has just begun a more integrated policy for senior management. Lufthansa in the Star Alliance network, too, participated recently for the first time in creating a sound foundation for a global executive management scheme.

FOUR ALTERNATIVES FOR A CROSS BORDER STRATEGY

Local Adaptation:1) International Strategy:

Appropriate when there is little foreign business – knowledge transfer from the center of headquarters.

Coordination costs are low.2) Multinational Strategy:

Affiliates are autonomous and local adapted. Cross-border advantages of standardization and learning

are low. Coordination-costs are lowest.

Global Integration:3) Global Strategy:

Advantages of standardization of policies and practices. Strong centralism. Lack of local responsiveness causes disadvantages.

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National segmented markets, cultures, policies set barriers

Coordination costs are high.4) Transnational Strategy:

Uses advantages form globalization, localization and cross-border learning simultaneously.

Coordination costs are highest.(see Bartlett /Ghoshal 1998)

Companies successful across borders with corporate headquarters in Germany have pursued a more globally integrated human resource strategy

CONCLUSION

In recent years, many of the largest German companies have completed the change towards a transnational strategy for senior management: Worldwide guidelines with enough flexibility to adjust to local situations, a global “as far as possible” with local responsiveness and interpretation of criteria, as well as a network of systems development contributing to global integration (see fig). The drivers of this transformation are adjusted company strategies and structures, the lack of qualified senior executives for global competition and the fact that managers have staff in many countries. Additional impetus has come about by a change in the expectations of executive managers and their desire for equality of treatment.The consequences: changes in the expectations placed on senior management – broader and greater international experience and the dissolution of traditional centers of power, which the headquarters had offered previously.

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CASE STUDY: LEADING CHINESE TELECOM CORPORATION – HUAWEI

Huawei was established in 1988 as an IT product trading firm in Shenzhen. Its internationalization drove since 2001, now it is serving ¾ of the top 50 IT operators in the world. HW has representation offices in over 100 countries and over 1 billion users. It is now employing over 60,000 employees, 48% of whom working in R&D.BUSINESS STRATEGY: Innovation High quality Low cost Excellent customer service

GLOBALIZATION STRATEGY: Less developed countries first, then developed countries Occupy market first (loss-making) then make profit through

maintenance and upgrades

MOTIVES OF OVERSEAS EXPANSION:

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Market seeking Asset seeking

HR STRATEGY: Deployment of Chinese expatriate to set up operations first Localization to overcome language and cultural problems, also to

show commitment to local economy and observation to local labour law – deployment of social capital

HW’S GLOBAL HR STRATEGY AND CHALLENGES IN PEOPLE MANAGEMENT

HR challenges:The Hr challenges faced by HW include the retention problem due to lower pay than western companies. Another challenge being identified was the low competence of local employees in poor countries (low literacy and project management skills). There were also cultural differences in work values of other countries. HW faced many cross-cultural issues between Chinese expatriates & local employees. And there was lack of identification of local employees with HW’s corporate culture or HW as their employer.

HW’s adopted HR strategies:HW promotes local employees to ranks which they will not get in western companies. They introduce local practices to suit local employees (e.g. bank loan guarantee letters). They carry out cross-cultural team building through social events. They also adopt the strategy of sending key local employees to HW’s HQ for training and development. HW does the deployment of locals as deputy managers to look after personnel issues because the locals know the people-related issues well. Hw believes in learning by doing in developing HR practices to suit local needs, e.g. borrow western companies’ good HR practices. In addition to the practical strategies being adopted by HW, they deploy emotional intelligence in understanding local employees needs and provide support as well.

CONCLUSIONSHW’s HR strategy is characterised with high-performance work system and paternalism typical of oriental culture. Creation and mobilization of social capital of employees plays an important role in supporting HW’s global business strategy. Mobilizing political capital

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is crucial for Chinese organizations to develop international markets, esp. in emerging economies

CULTURAL MISALIGNMENT

In many cases cultural misalignments are a byproduct of major organizational change initiatives, such as total quality management, employee involvement or reengineering. Each of these initiatives typically requires some cultural adjustment to be effective, even though they all seem to have similar goals, such as treating employees as critical assets, focusing on customer satisfaction and delegating authority broadly. Even when the optimal culture for supporting these initiatives has been identified and agreed to, the difficulties associated with making adjustments to the current culture must still be dealt with.

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IMPLEMENTING GLOBAL HR STRATEGIES

"Top-level managers in many of today's leading corporations are losing control of their companies. The problem is not that they have misjudged the demands created by an increasingly complex environment and an accelerating rate of environmental change, nor even that they have failed to develop strategies appropriate to the new challenges. The problem is that their companies are incapable of carrying out the sophisticated strategies they have developed. Over the past 20 years, strategic thinking has far outdistanced organizational capabilities. “Today, people create national competitiveness, not, as suggested by classical economic theory, mere access to advantageous factors of production. Yet, human systems are also one of the major constraints in implementing global strategies. Not surprisingly therefore, human resource management has become "an important focus of top management attention, particularly in multinational enterprises. The clear issue is that strategy (the what) is internationalizing faster than implementation (the how) and much faster than individual managers and executives themselves (the who). "The challenges [therefore] are not the 'whats' of what-to-do, which are typically well-known. They are the 'hows' of managing human resources in a global firm.

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How prepared are executives to manage transnational companies? How capable are firms' human resource systems of recruiting, developing, retaining, and using globally competent managers and executives? A recent survey of major U.S. corporations found only six percent reporting foreign assignments to be essential for senior executive careers, with forty-nine percent believing foreign assignments to be completely immaterial. Which firms are leading in developing globally competent managers and executives, and which remain in the majority and lag behind? That majority, according to a recent survey of 1500 CEOs, will result in a lack of sufficient senior American managers prepared to run transnational businesses, forcing U.S. firms to confront the highest executive turn-over in history.By contrast, it describes the approaches of some of the world's leading firms that distinguish them from the majority. There is no question that the world business is going global; the question raised in this article is how to create human systems capable of implementing transnational business strategies. Based on their research, the authors support the conclusion of the recent 21st Century Report that of executives who perceive their international operations as shelves for second-rate managers are unsuited for the CEO Job in the year 2000, or indeed any managerial job today.

CROSS-CULTURAL COMPETENT HR Transnational managers must learn about many foreign cultures'

perspectives, tastes, trends, technologies, and approaches to conducting business.

Unlike their predecessors, they do not focus on becoming an expert on one particular culture.

Transnational managers must be skillful at working with people from many cultures simultaneously. They no longer have the luxury of dealing with each country's issues on a separate, and therefore sequential, basis.

Similar to prior expatriates, transnational managers must be able to adapt to living in other cultures. Yet, unlike their predecessors, transnational managers need cross-cultural skills on a daily basis, throughout their career, not just during foreign assignments, but also on regular multi country business trips and in daily interaction with foreign colleagues and clients worldwide.

Transnational managers interact with foreign colleagues as equals, rather than from within clearly defined hierarchies of structural or cultural dominance and subordination. Thus, not only

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do the variety and frequency of cross-cultural interaction increase with globalization, but also the very nature of cross-cultural interaction changes

Review a range of global business strategies along with each strategy's requisite managerial skills.

EFFECTIVE HR STRATEGIES IN GLOBALIZATION

RECRUITING, DEVELOPING AND RETAINING QUALIFIED MANAGERSQualified managers have become a bottleneck factor in international competition. Cross borderand interdisciplinary experience is expected and not always available. In addition, loyalty to the company has depreciated. Headhunters are poaching the best people. How do companies with international

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experience handle this problem? Corporate itself is addressing the subject, human resource instruments for executives are realigned creating a winning employee value proposition.

INCORPORATING GLOBAL KNOWLEDGE

Executives should see themselves as drivers of a common corporate culture. They travel more, send e-mails around the world, participate in tele-conferencing, familiarize themselves with business magazines and business schools and, in short, are part of knowledgeable and mobile elite. This is reason enough for former barriers to disappear, allowing questions about comparisons and equity to emerge. The new media make the flow of information and communication around the world possible. But how and to what extent this new media can be employed in the development of an integrated global executive strategy also depends on the individual strategy and corporate culture. Company networks and very decentralized structures seem to hinder global standardization, whereas a growing international businessResponsibility frees a substantial and powerful drive. Finally, the degree of integrating business areas and the regions will differ.

REALIGNING PERFORMANCE AND COMPENSATION SYSTEMS

An improved integrated human resource management is the answer to changes in the company’s strategies due to increased globalization. The starting point includes basic values and guidelines being worked out and formulated by international teams and the appropriate tools. The goal is to increase the global standardization of appraisal and compensation systems for executives and at the same time to incorporate local qualities.

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REPORT

ON

CULTURALLY COMPATIBLE

HUMAN RESOURCE (HR) STRATEGIES

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“We believe growth comes from truly understanding the needs of people to drive relevant change”

COMPANY PROFILE

Telenor Group

Telenor ASA is an international provider of high quality telecommunications, data and media communication services. It ranks as world’s 7th largest mobile operator with a total of 164 million subscribers in its mobile operations.

Telenor Pakistan

Telenor Pakistan is 100% owned by Telenor ASA and adds on to its operations in Asia together with Thailand, Malaysia and Bangladesh.

Telenor Pakistan launched its operations in March 2005 as the single largest direct European investment in Pakistan, setting precedence for further foreign investments in the telecom sector. The company has crossed many milestones and grown in a number of directions, making Telenor Pakistan a leading telecom operator of the country.

Telenor is the fastest growing mobile network in the country, with coverage reaching deep into many of the remotest areas of Pakistan. In the most difficult terrains of the country, from the hilly northern areas to the sprawling deserts in the south, at times Telenor is the only operator connecting the previously unconnected.

It is keeping ahead by investing heavily in infrastructure expansion. With USD2 billion already invested, it has extended agreements with its vendors for network expansion and services until 2009. The agreements, with a potential to result in USD750 million worth of orders from Telenor Pakistan, are some of the biggest of their kind in the industry.

Telenor is spread across Pakistan, creating 2,500 direct and 25,000-plus indirect employment opportunities. It has a network of 23

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company-owned sales and service centers, more than 200 franchisees and some 100,000 retail outlets.

VISION OF TELENOR

Telenor’s vision is simple: “We're here to help”

It exists to help its customers get the full benefit of communications services in their daily lives.

CORE VALUES OF TELENOR

Make it EasyWe are practical. We don't complicate things. Everything we produce

should be easy to understand and use. Because we never forget we're trying to make customers' lives easier.

Keep PromisesEverything we set out to do should work, or if it doesn't, we're here to

help. We're about delivery, not over promising, actions not words.

Be InspiringWe are creative. We strive to bring energy to the things we do.

Everything we produce should look good, modern and fresh. We are passionate about our business and customers.

Be RespectfulWe acknowledge and respect local cultures. We do not impose one

formula worldwide. We want to be a part of local communities wherever we operate. We believe loyalty has to be earned.

STRUCTURE OF THE ORGANIZATION

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VICE PRESIDENT

MANAGER

DIRECTOR

EXECUTIVE

ASSISTANT MANAGER

INTERNEES

In TELENOR the hierarchy is very lean, in general the whole setup is centralized, all the matters are to be reported to the main company

and all the policies and targets are approved at the higher level. But at the department level the structure is decentralized.

► TELENOR has following functional departments:- Technical Customer operations Finance Administration & Procurement Human Resource Co-ordination (Govt. relations) Marketing

►Current CEO (Chief Executive Officer) of TELENOR is John Eddy Abdullah

HUMAN RESOURCE DEPARTMENT

HR department of Telenor is in Islamabad head office where it controls and handles all the HR activities of Telenor.

►Human Resource department’s hierarchy is as follows:-

► Current VC (Vice President) HUMAN RESOURCE of TELENOR is Ms. Nayab Baig

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GLOBAL PRESENCE

Europe

Norway

Telenor’s wholly owned Norwegian mobile operation is the country’s leading telecommunications operator

Services: Broadband, Mobile, Telephone, TV Companies: Telenor Norway, Canal Digital, Conax, Norkring,

Telenor Satellite Broadcasting

Denmark

Sonofon is the second largest mobile operator in Denmark

Services: Broadband, Mobile, TV Companies: Sonofon, Cybercity, CBB, Canal Digital

Sweden

Telenor is the third largest mobile operator in Sweden

Services: Broadband, Mobile, Telephone, TV Companies: Telenor Sweden, Bredbandsbolaget, Glocalnet,

Canal Digital

Finland

Canal Digital is Finland’s leading television distributor

Services: Broadband, TV Companies: Canal Digital

Hungary

Pannon is the second largest mobile operator in Hungary

Services: Broadband, Mobile Companies: Pannon

Montenegro

Promonte has more than 450 000 mobile subscriptions in Montenegro

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Services: Mobile Companies: Promonte

Serbia

Telenor is the second largest mobile operator in Serbia

Services: Broadband, Mobile Companies: Telenor Serbia

Ukraine

Kyivstar is the largest mobile operator in Ukraine

Services: Mobile Companies: Kyivstar

Russia

VimpelCom is the second largest mobile operator in Russia

Services: Mobile Companies: VimpelCom

Asia

Pakistan

Telenor is the second largest mobile operator in Pakistan

Services: Mobile Companies: Telenor Pakistan

Bangladesh

Grameenphone is the largest mobile provider in Bangladesh

Services: Mobile Companies: Grameenphone

Thailand

dtac is the second largest mobile operator in Thailand

Services: Mobile

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Companies: dtac

Malaysia

DiGi is the fastest growing mobile operator in Malaysia

Services: Mobile Companies: DiGi

CULTURAL COMPATIBILITY AROUND THE GLOBE IN TELENOR

The best way to see the cultural differences depicting in the work, performance, perceptions, attitudes, behaviors and even statements of HR of different nations, is to observe the views given by themselves in their interviews. Following is such an interview that was taken by two

employees of Telenor relating to two different cultures and two different nations.

Q: Describe briefly a typical day at your work

I am responsible for the sales in the central region of Malaysia, which is the area around Kuala Lumpur. This region accounts for 50 percent of the total sales in Malaysia. There are approximately 6000 dealers nationwide. I need to make sure that all our 3000 dealers have enough supplies, that we reach our sales targets and that our brand has a prominent position in the sales outlets. I have weekly meetings with my sales staff to maintain the overview and keep myself updated on new telecom product launches and promotion efforts. I also am required travel to the other regions to get new impulses and see what our competitors are doing.

Q: Why did you join the Telenor Group?

Before, I worked for a telecom company that had a really strict hierarchy and too many rules and regulations for my taste. So I wanted to find a new job in the telecom industry. I had heard a lot of positive things about Telenor, so when my current position became available – I applied and got the job

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Name: Lawrence Ooi Position: Head of Sales, Central

Region Company: DiGi Location: Kuala Lumpur, Malaysia

Q: What are the best parts of your work?

It is fruitful to work with many skilled people and help them to reach their goals. In addition, when good ideas are developed into strategies, it is very interesting and challenging to execute it and see how it progresses. Moreover, there are no barriers in DiGi as you get to voice out your opinions and all suggestions are taken into account before plans are being formulated

Q: How would you describe Telenor’s work environment?

It is a great atmosphere here, and our facilities are open and modern. We are given the flexibility to work where we like, and manage our own time

Q: If you should choose one word to describe Telenor, what would it be?

Dynamic! This is a very dynamic company. We find solutions quickly to problems that arise. Unlike other companies in which policies are set, plans are derived and execution is expected. In Telenor, we get to set our own strategies.

Q: Can you describe a special event that you especially enjoyed?

We had a prepaid registration drive last 2 years and my team had to patrol all dealers outlet in Central region at the last minute before midnight to ensure we registered as many subs as possible. The next morning, had a breakfast meeting with Johan (CEO) and committee for an update session and planned on further action to execute. It was a truly remarkable experience as I got to work with people of all levels to complete a simple yet important task

Q: Describe your career in Telenor so far

This is my first position in Telenor, which I have had for three and a half years now. Time passes really fast, and I feel that my career is developing rapidly, especially due to the several development programs I get access to through Telenor. I find that the financial workshops and leadership sessions I have attended enables me to perform better in my job.

Q: What are your professional goals?

I like the responsibility and the challenges being a manager, so I would like to develop myself further as a leader and take on bigger tasks in the future

Q: What do you enjoy doing in your spare time?

I like to spend time with my wife and children. We often go on longer trips in the weekends to go shopping, try new food and relax on the beach. Penang Island is one of our favorite locations. 

My hobby is to collect recyclable paper bags from grocery stores. The diversity fascinates me. They come in all shapes and colors. I have several hundreds paper bag at home, from all over the world. My wife is not too happy about that, though…

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Q: Briefly describe your job at Telenor

I work with internal communication – in short, that means I am part of the team that provides employees with the information they need in their daily work as well as news about the company. Currently, I am part of the editorial team in the Group Communications department in Norway. Previously I worked as head of the internal communications staff in Serbia. Group Communications at Telenor ASA felt that it would be useful to get different views on internal communication based on my experience of working for a Telenor operating company in another country. So, here I am in Norway. This is an exciting opportunity for me and the recognition is important. At the same time, I am pleased to see that people in Telenor are aware of the differences that exist across a big international company and are ready to listen and learn more.

The job I have now does not differ much from the one I had before. Just as in Serbia, we start the day summing up recent events and news stories. Then, we plan forthcoming activities. I still write articles and stories for our intranet portal, which is something I enjoy doing. Besides that, I am involved in the development of the new intranet, which will be used by tens of thousands of employees worldwide. Being even a small piece of the puzzle in a complex project like that is exciting.

Q: Why did you join Telenor?

I used to work for Mobtel, the Serbian telecommunications provider acquired by Telenor in 2006. It was a change for me suddenly to be a part of an international telecommunications group. The way we do business now is quite unlike my previous experience. But it has certainly changed for the better. We were used to a strict – well, old-fashioned hierarchy. That is not what it is like at Telenor. It does not matter whether you are a manager or not - everyone sits side by side in the office. That is quite unusual for Serbian companies.

Q: What has your career at Telenor been like so far?

I have been in the telecommunications sector for over 10 years now, and tried several interesting jobs. My first position with Telenor was also my first role as a manager and an important opportunity for me. The job I was doing there brought me to Norway, where I now have the chance to continue working within my profession and at the same time learn how things look and work from a different perspective.

Q: What do you enjoy most about your work?

Internal communications is a new profession in Serbia, so I was fortunate to have the opportunity to be one of the pioneers and set the standards. During a recent Public

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Name: Miljana Kijanovic Position: Internal

Communication Manager Company: Telenor Group

Headquarters and Telenor Serbia Location: Oslo, Norway

Relations conference in Belgrade, I held a presentation in front of a wide audience about internal communications

Q: How would you describe the work environment at Telenor?

When I started to work with Telenor in Serbia, we had just moved into a new building, located in the new part of Belgrade. Our Belgrade offices have a cool, modern design. Everyone enjoyed the benefits that make it an attractive place to work, such as free refreshments and massage chairs. Now, I know the concept is the same here, in Norway. The Telenor headquarters – just outside Oslo - at Fornebu, has an incredible position just by the sea. The view over the fjord is different from the grey urban landscapes I was used to. I also admire the Telenor art collection, both here and in Belgrade.

Colleagues are the most important part of any work environment. I miss my colleagues in Serbia, our discussions about work, but also the time we spent together out of the office. Still, I am forming new friendships and getting to know new people in Norway. Although there is a similar work culture across Telenor, there are differences in our native cultures that make working together interesting, sometimes challenging, but certainly enriching for all of us. Working and living in another country and a new environment, enables me to develop not only professionally, but also as a person.

Q: If you had to choose one word to describe Telenor, what would it be?

Actually, I would choose two important words: freedom and responsibility. At Telenor, you are given the necessary tools to do your job, but you are not told how to perform your tasks. For instance I have flexible working hours, and can take my laptop down to the lake during the summer to enjoy the sun while I am working. We have a lot of freedom - as long as you produce the results. I really value this freedom.

Q: Can you describe a special event at work that you particularly enjoyed?

I was part of the committee responsible for planning and organizing our one-year anniversary in Serbia in 2007. It was a big event with activities for both employees with families, as well as external partners and others interested in celebrating this milestone. We had an outdoor party with a live DJ, puppet theatre for the children, sports activities, and a lot more. It was a great success! Everyone loved it. 

Q: What are your professional goals?

I want to develop my career with Telenor further, and strengthen my internal communications and branding competence. I was tempted to explore international opportunities and I still am. It really exposes you to new ideas and viewpoints and helps to open your mind to new ways of doing things

Q: What do you enjoy doing in your spare time?

I like to be active and I enjoy sports. Rollerblading and skiing are my favourites, so I really look forward to the skiing season in Norway. I also love the gym and I often go to the one at Fornebu – as an employee here I have almost free access. The gym is located at the offices, which is very convenient.

OBSERVED DIFFERENCES

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The difference in the statements of the two is quite obvious; one is a woman other is a man. Another difference is that they work in two different cultures of nations. It is a fact that cultural differences make difference to the HR practices. It isn’t necessary that what is valuable to one culture man is also valuable to other culture’s man.

It is observable that the lady is answering to all the questions very descriptively while the man is answering precisely and to the point

Both of them switched to Telenor from another telecom company. The lady switched it because she wanted to work in an internationally recognized company while our Malaysian friend didn’t like the strict environment of former company.

The lady got promoted due to her learning and the man got promoted through workshops.

The lady has the professional goal to work internationally while the man wants to move vertically upward to managerial posts.

The typical European lady is very sporty while the man is truly Asian and want to spend spare time with his family

The lady loves recreational activities at work while the man enjoys work related activities.

OBSERVED SIMILARITIES

In short the cultural differences are quite obvious through their priorities, likings and dislikings. However the company based ideas are completely same like

Both joined Telenor impressed with its freedom of expression Both are provided the career opportunities

Both are given the environment compatible to their cultures so that they may not feel the odds.

Both have described their company Telenor in the same sense of goodness.

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Both have described their work environment as free, respect giving as well as responsible.

These similarities are the result of Telenor’s culturally compatible environment being provided to its human resource.

HUMAN RESOURCE STRATEGIES

We discuss Telenor’s strategies which make it culturally compatible to the human resource of different countries where so ever it has set up its operations. Following are these strategies:

RECRUITMENT:

Telenor claims “ FREEDOM OF EXPRESSION” The hiring criterion in Telenor is same throughout the globe.

However due to changes in the skills, knowledge and abilities of people in different countries , Telenor has varying staff hiring priorities eg here in Pakistan university education is quite common and cheaper as compared to western countries. Pakistan has a pool of graduates and post-graduates, so obviously more educated and skilled person is hired whereas in western set ups Telenor has mostly graduates in job positions.

Telenor hires young and talented people more as compared to experienced elderly in Asian countries. It is due to the fact that the creativity and freshness required by service sector like Telenor is found in only young talents in Asia. The middle aged people in Asian countries are less enthusiastic and fresh.

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However people in western countries remain enthusiastic and fresh for a relatively longer period of time. 80% of Telenor’s staff is young blood.

GENERAL SET-UP

There is a lot of respect given to all employees. Here the manager shakes hand with the mop. All the employees self-serve themselves. They are not allowed to make the service men work in their service

There are no cabins in any Telenor centre. There is a central lobby where the front desk men to the Regional Officer (RO) all sit together.

As a cultural symbol Pakistani Telenor offices have placed a big bell with a string on the main door of offices. It is for the purpose that any one who feels himself satisfied with Telenor can ring the bell. It is in coincidence with the practice of Late Mughal King Jahangir who used to listen to the petitions of his sub ordinates whoever has any complaint.

TRAINING

Training system is much vibrant in European Telenor set-ups. But owing to the lesser revenues generated in Asian markets, Telenor is not carrying out best training here. Training is always ignored in Pakistan by all. However Telenor keeps on conducting one day training for its employees throughout their work life.

JOB DUTIES

Telenor is carrying out equal and uniform strategies everywhere. Its job duties and their requirements are same. It offers flexible work hours to all employees in its customer’s service call centers. There is no discrimination on gender base in Telenor.

The reward system is same everywhere. Everyone is rewarded on good performance in monetary units as well as recognition and applaud.

All employees working in Telenor along with their family members are medically insured. They can get up to 10 lakhs on medical treatment. Owing to the more health problems among aged in Asian countries, Telenor prefers to retain young and healthy

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employees. In western countries mostly young people are medically tested for maladies.

There are no pension plans in Telenor. There are provident funds provided in Telenor.

CULTURAL COMPATIBILITY

Telenor do value the culture of its transnational bases eg in Pakistan Telenor has the policy to send its 2 employees on Hajj every year

Telenor arranges aftar for its staff in Ramzan. In the last annual meeting of Telenor, They have decided

sherwani as the dress code in Pakistan. Even in inter-province culture differences, the example of Quetta

is interesting where employees aren’t asked to wear suits. They wear shalwar kameez

CONFLICT RESOLUTION

Referring to the Denmark issue created in Pakistan against Telenor, its HR had no impact due to this controversy. Not a single employee felt against Telenor. It was a great achievement of Telenor that it got in the shape of loyalty and concern of its HR towards Telenor.

CHALLENGES

Telenor face many challenges with the ever growing need of competent Human Resource. It is really hard to hire and retain the best people especially around the globe. The global companies face many challenges regarding the cultural identity of respective nations. They have to adjust culturally to the environment of respective countries.

And when even hiring the HR staff of that very country, the organization is exposed to many challenges to make them perform at

their best.

CONCLUSION

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By keenly analyzing the Human resource Management of Telenor, we the group members agree that Telenor is carrying out satisfactory culturally compatible strategies for its HR. Although it is not promoting the “cultural identity” agenda that aggressively but even then it is facing much less cultural conflicts among its HR. It may be due to the reason that it has divided itself in just two markets: Europe & Asia. The European market almost holds the same culture and three of its Asian market countries are Islamic. We came through very unusual facts about managing any company’s HR. We believe that managing a competitive and culturally compatible HR in a competitive global market is a tough job. And Telenor is so far quite successful in hiring and retaining exceptionally talented HR worldwide.

COMMENTS

As students of human resource management, among other things, we believe that the globalization and the advancement of technology influences how organizations should react and adjust to the changing times and economy. Every company will have to find its own route – and this will depend on the situation and will be different for executive management and specialized staff. The decisive turnaround within today’s human resource policy appears to be in the replacement of both local autonomy and the home country preference. We will not seek to deny the obvious power of globalized capitalism to distribute and promote its cultural goods in every corner. Nor will we take up the argument now very commonly made by critics of the cultural imperialism thesis that a deeper cultural impact cannot be easily inferred from the presence of such goods. What we will try to comment is something more specific: that cultural identity, properly understood, is much more the product of globalization than its victim.

RECOMMENDATIONS

We as students of HRM can just recommend global companies (in this case Telenor also) within the sphere of our knowledge, exposure and literature survey. WE recommend that:-

A worldwide audit of IHR (International Human Resource) programs and plans should be conducted at least every three years as a matter of course. While guidelines and an approval

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process help management navigate through obvious change, subtle changes within the company, local market practice, legislation, and employee demographics can erode programs’ effectiveness over time. Multinational pools are particularly subject to degrading without continuous corporate sponsorship and should also be re-evaluated periodically.

Each organization must decide whether it has the right people in the right places to make the changes, whether these people have been adequately trained, given the necessary resources and focused on the right objectives, and whether they believe they will be rewarded for their contributions. HR strategy must be consistent with the needs of the organization, and its component strategies must provide alignment with the organization's objectives.

Human resource strategies can be powerful tools for signaling cultural change and reinforcing those changes once they are made. Who is hired and retained, how people are paid, and what behaviors are deemed desirable all send strong messages about the desired culture. The potential of HR strategies and programs for shaping organizational culture cannot be overestimated. For HR strategy to realize its full potential, the organization must first determine what its culture is and what it should be. Then the organization can create a plan for aligning culture with its mission and environmental or contextual realities by managing the culture from what it is to what it should be.

We wish a very best of luck to TELENOR. May it progress and achieve its desired goals. (AMEEN)

OUR VISIT

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ISLAMABAD HEAD OFFICE TELENOR

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