Introduction

Background

As today’s society has covered with high competition, it can be identified as one of the main characteristics in today’s business world. Hence, each and every organization tries not only to maintain their position within the market but also to develop their businesses from step by step.

Business expansion can be identified as one of the main strategies which the organizations use to develop their businesses. Under this strategy, they tend to establish new branches in order to attract new set of customers who are coming from another area. This strategy could be implanted in two ways. They are;

1. Establish a branch in another area in the same country
2. Establish a branch in another country

Most of the organizations that are coming under small and medium level categories mostly use first option in order to expand their businesses. But when it considers about large scale organizations, they tend to establish their branches in another country in different geographical area.

When these organizations establish the branches in different geographical area, they supposed to use human capital practices as it suit with the located country. But most organizations tend to mix the extract of their original practices also as human capital practices play a vital role within any organization.

Also, each and every organization in today’s society tries to develop and keep their steps forward with the global economy as the world is developing in each second spending with the new technology.

Purpose of the study

Throughout this report it expects to identify an organization which is coming under multinational category as they already have the branches in foreign countries also. It expects to study about the formation of the organization and to study about the Human Resource Department and its functions of the selected organization.

When it analyzes the function of Human Resource Department, it expects to study about all main functions such as recruitment, reward management, performance management, training and development etc.

By analyzing these areas it hope to get an idea on emergence of Human Capital Management of the multinational organizations. Also expects to understand about the global economy and its impact on Human Capital Management also.

Methodology

As it has selected a multinational organization, it has to cover a large area in order fulfill the purpose of this study. Hence, it was developed a structures questionnaire in order to cover all relevant areas. This questionnaire was used as a guideline to continue the interview with the resource persons of the selected organization.

So, as the methodologies it used both questionnaire and interview methods as the primary data collection methods.

Trend in the Global Economy

The global economy in the sense, the economy of the world considered as the international exchange of goods and services that is expressed in monetary units of money. So, trend in the global economy can be defined as the overall direction in which a nation’s economy is moving. Here most business managers need to be aware of the prevailing direction of the economic trend for the product markets and countries in which they operate in order to make more accurate and effective plans for their organizations.

When it explains further, it can be refer to the current situation of the global economy that are shaping the future in the next few months, as well as in the next few years. However, trends in the global economy cannot be considered as a prediction of what is going to happen and it is just a statement about what is currently happening in the economy. In the current society, most of the private organizations and governments tend to use global economic trends as a benchmark to make choices on international competitiveness, new product launch, making strategies for better economic efficiency etc.

Its impact on Human Resource Management

Globalization allows the organization to rethink about human resources and the strategies which they are already using. It has a direct impact on human resources management as human resource is the heart of the organizations.

Some impacts can be outline as follows;

• Recruitment and Hiring

New trends in globalization allow the organizations to expand and add new options to the organizational recruitment process. Globalization allows the organizations to hire employees from all around the world. This gives the opportunity to hire very best talent towards the organization. It brings diversity towards organization with new knowledge, attitudes and talents.

• Compensation Benefits

Not like past, today there are rules and regulations have been implemented on behalf of the employees (Workers). Globalization has been given positive impact on these regulations. As an example it has defined a minimum wage for the workers and it gives a direct impact on the performance of the employees and its ultimate benefits go to the organization.

• Personal Development

As human resource play a vital role within an organization, personal development can be identified as a direct benefit which organizations are able to enjoy with the output. The new trends in globalization have been given more and more opportunities to people in order to develop themselves in many areas. (Ex: Knowledge in IT) So, this can be gained personally or in organizational level. However, human resource with new knowledge and skills are worth to the organizations.

Likewise, it can be identified so many positive impacts of globalization on human resource while some are giving negative impacts. But with the globalization, the organizations are able to develop the business with the contribution of most talented human resources.

Profile of the Selected Multi-National Corporation

Bodyline (Pvt.) Ltd is the selected organization in order to continue this study. The establishment of Bodyline was in 1992 signified a momentous achievement in the history. This establishment can be mentioned as a significant one in the apparel industry as it was formed by binging together two of the world’s renowned lingerie retail brands, Victoria’s Secret and Triumph.

Victoria’s Secret can be identified as the number one fashion lingerie band in the United States and also Triumph also a German lingerie brand currently in most countries across Europe and Asia. These customers have engaged with MAS as its local partner.

When consider about the history, Bodyline has operated mainly as a manufacturing arm of the JV’s key band partner, MAST industries in order to committed to fill capacity while Triumph international, the product development partner provided technical support for the business.

Today, Bodyline (Pvt) Ltd located in Horana and it has been a world class apparel manufacturer and currently it is engaged in product design, development execution and marketing to global brands. Today they are having a base of world class customers such as;

• Victoria’s Secret
• Nike
• Triumph
• Sloggi
• VSX
• Arena
• Odlo etc.

In 2012, Bodyline (Pvt) Ltd expands their business by establishing their subsidiary in India which is called as Intimates Fashions India It is currently consists with around 3000 employees and it can be identified as a 100% export oriented unit. In addition to that it consists with another 3 sub – plants in Sri Lanka.

Now Bodyline is experiencing their 25 years of expertise in intimate apparel sector and with that expertise Bodyline prides itself being a lead vendor to world class brands.

3.1. Structures of the organization

Organizational Structure

Organizational structure is a system used to define a hierarchy within an organization. It identifies each job which exists within the organization, its function and where it reports to within the organization.

According to the organizational structure of the selected organization, Chief Executive Officer (CEO) can be identified as the person who holds the top position of the organization. Here, CEO can be identified as the highest ranking person in the organization, ultimately responsible for taking managerial decisions.

Board of directors is in the second line who directly deals with the CEO of the organization. Here, the board of directors is consisting with several directors who represent different areas and functions of the organization. These directors can be outline as follows.

• COO
• Director – Strategy, Innovation and Business Development
• Director – Production
• Director – Quality
• Director – Supply Chain Management
• Director – Finance
• Director – Human Resources
• Director – Strategic Projects
• Director – Operations

Likewise, board of directors consists with 9 directors who are responsible for the main functions as this a manufacturing organization. These directors are the persons who help CEO in decision making process relative to their functions.

Under this board of directors, there is a set of General Managers (GMs) who directly deal with directors according to the reporting hierarchy. These general managers are coming from different backgrounds as they have to deal with different customers as this is clothing manufacturing organization.

Here, there are two general managers report to COO and these managers represent two different customers. One manager deal with VS (Victoria Secrets) and the other manger works with Ayathi.

There is a director for innovation department and two general managers report to him. They are;

• General Manager – Product Innovation
• General Manager – Innovation Projects

Both of these general managers represent innovation department of the organization.

As mentioned earlier, this organization consists with 4 Sub-plants Island wide. Hence, the director in production department is responsible for all these plants and its operations in production process. According to the organizational hierarchy there are four general managers have appointed for these plants in order to manage the production process.

In order to handle quality function, there is a general manager who is responsible for technical integration of the organization.

When it consider about the existing functions of the selected organization, supply chain function can be identified as one of the main function which directly support the organizational final output. There are three Deputies General Managers (DGMs) have appointed in responsible for supply chain department who directly repot to Director – Supply Chain. They also repent different areas. It can be summarized as follows.

Here, one DGM is responsible for procurement process and the other DGM is responsible for Darwin which is computerized system used by the organization for their supply chain process.

When it considers about human resource department, it consists with two deputy general managers under director – human resources. Here, one deputy general manager is specially responsible with talent management as the human resource department play the vital role within the organization.

Apart from that, according to the organizational hierarchy some general managers directly report to CEO. Following managers can be mentioned as examples.

• General Manager – Business Development

This general manager is responsible with NIKE brand and he directly reports to CEO of the organization while a deputy general manager reports to whim. The organization has taken this decision as NIKE is considered as their main customer.

• General Manager – IT

According to the structure this general manager directly reports to CEO while he is having another deputy general manager with his department.

• General Manager – Lean Enterprise

This manager is directly deals with CEO while other executives of the department report to him.

Likewise, it can summarize organizational structure of the selected organization as it covers a large area.

Divisional structure of Human Resource Department

Following can be mentioned as the divisional structure of HR department of the selected organization.

Here, there are two deputy general managers report to GM and three managers who represent three divisions directly report to these deputy general managers. Those divisions can be identified as the main divisions in HR department of this organization.

Functions of the department and allocation of main functions

When it considers about the functions of the HR department of this organization they can be outlined as follows.

• Recruitment and Selections
• Payroll and compensation
• Learning and Development (Wages Board)
• Training and Development (Shop and Office)
• Employee Relations
• Administrative
• Legal and Compliance

In Recruitment and Selections functions, that team can be divided into two categories. They are;

• Recruitment and Selections (Wages Board)
• Recruitment and Selections (Shop and Office)

The first team handles all recruitment related duties of the employees who are coming under Wages Board (Ex: Machine Operators). The second team handles all recruitment and selections of the employees who are coming under Shop and Office act. (Ex: Staff and above employees) Bothe of these teams directly report to a deputy general manager of the department. In this organization there are two senior executives, two executives and one assistant are working with these recruitment teams.

When it considers about payroll function it can be identified as one of the major function of this department. Because, payroll of both categories (Wages Board and Shop and Office) are handling by this team. This team is consisting with four senior executives, three executives and two assistants.

The main responsibility of Learning and Development team (L & D team) is to identify training requirements of the employees who are coming under Wages Board including team members and fulfill those requirements. This team consists with six members including two senior executives, two executives and two assistants. They have the responsibility to fulfill these requirements with the help of both internal and external trainers.

Training and Development team have the responsibility to fulfill the training requirements of the employees who are coming under Shop and Office act. Here they have to develop a plan for the year and they have to implement planned programmes for the relevant employees. The plan should be approved by the General Manager who is based in the HR department of the parent company. Also they have to submit a detailed report at the end of the each year. This team consists with four members including one senior executive and three executives excluding the manager.

Employee Relation function can be identified as one of the main function which play a vital role within this organization. Employee Relation team (ER team) can be known as the team who work with team members very closely. Here, the parent company has given the freedom in decision making on this regard. But they have to submit a detailed report to the HR department of the parent company at the end of each year. Also, the parent company gives their highest contribution for this team. As an example directors and top level managers participate for the vents organized by the ER team.

When it considers about the administrative team, it also can be identified as a team which is closely work with the employees. Administrative team has the responsibility to cover several important areas. They are;

• Transportation of employees
• Security
• Cafeteria

So, this team has to work under the supervision of deputy general manager. This team consists with around 18 members who are working with above mentioned areas.

Legal and Compliance can be known as the function which handle the legal area of the organization. They have to get the support of the Labour Department also. (Appendix 01) So, this team works under direct supervision of General Manager and Manager Compliance who are coming with a law background.

Application of Human Capital Management

Human Capital Measurements

Human Capital of an organization can be identified as the knowledge, skill sets and intangible assets and they add economic value to an individual. Here, as human capital is an asset it is not able to measure it in static way.

According to the data gathered from the selected organization, they apply human capital measuring in various ways. As one way, they daily measure the absenteeism of team members. (Appendix 02) It can be identified as one of the major human capital measurements in this organization as it represents the apparel sector.

Data collection is done by ER team and analysis and interpreting part is done by both management and recruitment team. Though this measurement they tend to interpret future need of team members.

In addition to that, this organization measure human capital through ROI (Return on Investment) also. Mostly this is applicable for the employees who are in staff and above level. Here, they compare it with the cost they spend for their training and development progammes and their performance on achieving organizational goals.

According to the information gathered, it is able to say that this organization uses human capital measurement in different ways.

Functions to be covered

4.2.1. Recruitment and Selection

Recruitment can be defined as the process finding and hiring the best qualified candidate for a particular job opening in a timely and cost effective manner.

Selection also can be identified as a part of recruitment process. Selection is the process of interviewing and evaluating candidates for a specific job and selecting and individual for employment based on certain criteria.

When it considers about the recruitment and selection process of the selected organization, it can be graphical mentioned as follows.

This is the recruitment process which Bodyline (Pvt) Ltd applied for each of their subsidiary including the subsidiary in India. Once they have an opening as the first step they raise a MRF (Man Power Requisition Form) by the responsible manager of the relevant function. After that it starts the next step to get the approval from the respective parties. According the current procedure MRF should be approved by CEO, as he is the responsible person for managerial decisions for each subsidiary before move to the next step.

Once it approved by CEO of the parent company (Bodyline (Pvt) Ltd), the recruitment team starts the recruitment process. Here, the recruitment team of the parent company decides the source of recruitment which should be followed by the subsidiary. They have applied such kind of strategy in order balance the recruitment strategies as they give the priority for the internal candidates also.

So, the source of recruitment is decided by the recruitment team of parent company and next steps are handed over to the recruitment team of the subsidiary.

If the parent company has decided to do an internal recruitment for the particular opening, they tend to follow above mentioned strategies as the next step to attract applicants. However according to the strategies of the parent company they give priority for the internal applicants as a motivation strategy.

4.2.2. Training and Development

Training and Development can be identified as one of the vital role within an organization. It can be considered as a function related with organizational activity aimed at bettering the job performance of individuals and groups in organizational steps.

It can be described as a kind of educational process which involves the sharpening of skills, concepts, changing of attitudes and gaining more knowledge to enhance the performance of employees.

As the first step HR team do an analysis in order to identify the training requirements of the employees. It can be identified as the first step according to the process which has developed and finalized by the parent company.

Also they pay their attention on budget for training and development process. So, after identifying the training requirements T & D team (Training and Development team) tend to prepare the budget in order to get the approval from finance department.

Also, employees and managers also have the opportunity to request training programs from HR department apart from the analysis done by HR team. In such situation T & D team do an analysis on following areas before approved those requirements.

• Approved budget
• Company situation
• Current performance
• Potential of employees

After considering with above mentioned points, T & D team decides the mode which uses to deliver the required training. If they are going to use group method, it has to follow several pre-steps according to the process implemented by the parent company.

In that case, T & D team has to develop a training proposal as the first step. It should be approved by Director HR and Director Finance. After that they are able to decide and plan the training programme with date and time after processing the payment from Finance department.

These steps should be followed by each plant and at the end of each year the subsidiaries has to submit a full report for the parent company mentioning the training progammes they did and the results of the evaluation process.

4.2.3. Reward Management

Reward Management can be considered as the formulation and implementation of strategies and policies that aim to reward people fairly, equitably, and consistently in accordance with their value to the organization.

In selected organization, it has defined a pay policy by the parent company and each subsidiary has to apply it in their process. In this organization they have developed a policy to value their employees based on their academic qualifications and their experiences. Here, when they hire a new employee they decide his/her salary based on the above mentioned points.

After that the employees are entitled with salary increment in each year with their experience they are having at the organization.

When it comes to the team members’ level (Machine operators), they have developed another reward strategy in order to appreciate their performance. Here, the management selects the best team for each month based on the performance of the team members and the selected teams are awarded with a gift pack. In addition to that, if any team could achieve this for more than six times they are considered for a salary increment also in the next year.

So it can be identified that the selected organization always uses an employee based method in their reward system.

4.2.4. Performance Management

Performance Management can be defined as the activities which ensue that goals are consistently being met in an effective and efficient manner. Performance Management is focused on the performance of the organization.

In this organization, they implement this process in two ways. Once they hire a new employee and once he/she completed his/her probation period (6 months) HR team circulates a performance appraisal document with immediate manager whom he/she reports. It is filled by the reporting manager and it is considered as the proof to take the decision whether he/she is confirmed for the job or not.

Apart from that, once the new employee completed three months at the organization, HR team circulates another appraisal document with their reporting managers and it is called as JED (Job-fit Evaluation Document). It is also a performance appraisal document and the importance of this document is, it gives a feedback for the employee also regarding his/her current performance level. Then before he/he completed his/her probation period they are able to develop their performance.

In addition to that, once a year they appraise performance of other employees and it is done by their immediate managers. It is considered as the base to identify training needs, offering rewards etc.

Findings

Level of Implementation of IHCM

When it considered about IHCM practices of the selected organization, it seems that as the parent company Bodyline (Pvt) Ltd engages with HR practices of its subsidiary in some extend. So, when it analyzes gathered information it is able to say that the level of IHCM implementation of Bodyline is in an intermediate level. Because it is able to see that even though the parent company always is in alert with its subsidiary, it has given the freedom in decision making.

But the parent company has been given the guide lines for their subsidiary in order to make their processes easier. So, International Human Capital Management is used by Bodyline in an effective manner in order to manage its subsidiary more efficiently to reach their ultimate goals on time.

Creating Value Though People

As a manufacturing organization which represents the appeal sector, Bodyline (Pvt.) Ltd tries to manage its human resources in an effective manner. The management always tries to manage people. Not money. They have developed strategic plans to develop their human resources and they have applied it for its subsidiary also. They always try to develop attitudes, enthusiasm, energy and passion of its employees.

The management of this organization believes that human capital is the most powerful party within the organization. Because of that, all strategies they develop are aligned with human capital and their betterment.

Impact of IHCM Policies and Practices on Business Performance

IHCM policies and practices of an organization can be identified as guide lines which guide its subsidiary in better way. When it considers about a business organization, it could see that it allow the organizations to hire new blood from another countries also. Here the organizations which have IHCM practices do not consider about the nationality and they just pay attention on their talents and skills.

Also, IHCM guide the organizations to develop strategic plans with high quality as they are going to apply both by parent company and subsidiary.

Apart from that, IHCM policies allow the business organizations to build contacts with other counties also. So, the large scale organizations such as Bodyline are able to get the maximum contribution of these contacts in order have more customers from more bands.

Likewise, IHCM give more benefits towards business organizations. But the organizations should pay its attention on implementing effective IHCM policies and practices in order to gain positive impacts towards the organizations.

Appendix

People interviewed

When it has to gather information, it has to interview several people who represent the organization in order to gather above mentioned data.

1. Deputy General Manager
2. Manager – Learning and Development
3. Manager – Administrative
4. Senior Executive – Recruitment and Selection
5. Senior Executive – Legal and Compliance
6. Executive – Training and Development

Questionnaires

The interviews were conducted with the help of structured questionnaire. (Appendix 03)

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Appendixes

Appendix 03