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Harvard Case - East versus West: Armada India's Ingenious Approach to HRM

"East versus West: Armada India's Ingenious Approach to HRM" Harvard business case study is written by Sangeeta Goel. It deals with the challenges in the field of Organizational Behavior. The case study is 10 page(s) long and it was first published on : May 26, 2016

At Fern Fort University, we recommend Armada India adopt a hybrid approach to HRM, integrating Western best practices with its unique Indian context. This approach will leverage the strengths of both worlds, fostering a culture of employee engagement, innovation, and high performance while respecting the local values and cultural nuances.

2. Background

Armada India, a subsidiary of the American manufacturing giant Armada Inc., faces the challenge of adapting its Western-centric HRM practices to the Indian context. The company struggles with high employee turnover, low morale, and difficulty attracting and retaining talent. The case study highlights the contrasting cultural values and expectations between the East and West, particularly in terms of leadership styles, communication patterns, and employee motivation.

The main protagonists are:

  • Rajeev Sharma: The CEO of Armada India, tasked with finding a solution to the company's HRM challenges.
  • Arjun Singh: A senior manager at Armada India, advocating for a more localized approach to HRM.
  • Susan Miller: A senior executive from Armada Inc., representing the Western perspective and emphasizing the importance of standardized practices.

3. Analysis of the Case Study

To analyze the situation, we can utilize the Organizational Culture Model by Schein, which identifies three levels of culture:

  • Artifacts: Observable behaviors, physical objects, and language. In Armada India, this includes the Western-style management practices, formal communication channels, and individualistic performance evaluation system.
  • Espoused Values: Explicitly stated beliefs and values. This includes Armada Inc.'s emphasis on efficiency, meritocracy, and individual achievement.
  • Basic Underlying Assumptions: Unconscious, taken-for-granted beliefs about the world. This includes the American cultural emphasis on individualism, direct communication, and achievement-oriented motivation.

This analysis reveals a significant cultural mismatch between Armada Inc.'s Western values and the Indian context. The Indian workforce values collectivism, indirect communication, and relationship-building. This mismatch contributes to employee dissatisfaction, lack of motivation, and high turnover.

Furthermore, the case study highlights the importance of leadership styles in shaping organizational culture. The Western-style leadership, characterized by directive and transactional approaches, is perceived as authoritarian and unresponsive by the Indian workforce. This further exacerbates the cultural gap and hinders employee engagement.

4. Recommendations

To address these challenges, Armada India should implement the following recommendations:

1. Hybrid HRM Approach:

  • Adopt a hybrid approach that combines Western best practices with local adaptations.
  • Develop a culturally sensitive HRM framework that considers the unique values and expectations of the Indian workforce.
  • Implement a 'glocalization' strategy, adapting global practices to the local context.

2. Leadership Development:

  • Train leaders in culturally sensitive leadership styles that emphasize empathy, collaboration, and relationship-building.
  • Encourage participative leadership and empower employees to contribute to decision-making processes.
  • Promote cross-cultural understanding through training programs and cultural exchange initiatives.

3. Talent Management:

  • Develop a comprehensive talent management strategy that focuses on attracting, developing, and retaining Indian talent.
  • Implement a performance management system that aligns with Indian cultural values and emphasizes teamwork and collective achievement.
  • Offer competitive compensation and benefits packages that are tailored to the Indian market.

4. Organizational Culture Change:

  • Foster a culture of open communication and encourage feedback from employees at all levels.
  • Promote diversity and inclusion by creating a workplace where all employees feel valued and respected.
  • Develop a strong sense of community through team-building activities, social events, and employee recognition programs.

5. Technology and Analytics:

  • Leverage technology and analytics to track employee performance, identify talent gaps, and measure the effectiveness of HRM initiatives.
  • Utilize data-driven insights to inform decision-making and improve the overall effectiveness of HRM practices.

5. Basis of Recommendations

These recommendations are based on the following considerations:

  • Core Competencies and Consistency with Mission: The hybrid approach aligns with Armada India's mission to be a successful and sustainable business in the Indian market.
  • External Customers and Internal Clients: The recommendations address the needs of both external customers and internal clients by fostering a highly engaged and motivated workforce.
  • Competitors: By adopting a culturally sensitive approach, Armada India can gain a competitive advantage in attracting and retaining top talent in the Indian market.
  • Attractiveness: The recommendations are expected to improve employee engagement, reduce turnover, and enhance productivity, leading to improved financial performance.

6. Conclusion

By embracing a hybrid HRM approach that respects the unique cultural context of India, Armada India can overcome its current challenges and achieve sustainable success. This approach will foster a culture of employee engagement, innovation, and high performance, while respecting the local values and cultural nuances.

7. Discussion

Alternative approaches include:

  • Full Westernization: This approach would involve imposing Western HRM practices without any adaptation, leading to potential cultural clashes and employee dissatisfaction.
  • Complete Localization: This approach would involve adopting Indian practices exclusively, potentially leading to a loss of standardization and efficiency.

The hybrid approach offers the most balanced solution, minimizing the risks associated with the other options.

Key assumptions:

  • The Indian workforce is receptive to change and willing to embrace new approaches.
  • Leadership is committed to implementing the recommendations and fostering a culture of change.
  • The company has the resources and expertise to implement the necessary changes effectively.

8. Next Steps

  • Develop a detailed implementation plan outlining specific actions, timelines, and responsibilities.
  • Conduct pilot programs to test the effectiveness of the recommendations before full-scale implementation.
  • Monitor progress regularly and make adjustments as needed.
  • Communicate transparently with employees throughout the change process.

By taking these steps, Armada India can successfully navigate the cultural challenges and achieve its goals of building a high-performing and engaged workforce in the Indian market.

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Case Description

In 2010, when India opened up its defence sector to private manufacturers, Armada India set up a factory in West Bengal. However, the factory faced issues of low productivity, delivery delays, and high rejection rates. A quirky new general manager of maintenance applied Buddhist philosophy to his human resource management practices. The workers, who until then had felt unimportant, now felt happy and engaged as they adopted the manager's ideas, which appealed to their local psyche. Strong results were seen in terms of improved production, productivity, and morale. However, senior managers had significant global expansion plans and were wary of this general manager's unorthodox management style. They hired a highly qualified, U.S.-educated human resource (HR) executive who scoffed at the "unsophisticated" practices of the manager and sought to change them, despite their success. What was the manager to do? Was the new HR executive justified in trying to impose more traditional business methods?

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