Case Study: Internationalization and Cross-cultural Expansion of a Local Manufac

Question

Case Study: Internationalization and Cross-cultural Expansion of a Local Manufacturer: Barden (US) and FAG (Germany)
The experiences of Barden, a precision ball-bearing manufacturer based in Danbury, Connecticut, illustrate how workforce planning has become a global activity even for a local firm. In the late 1980s, Barden had an opportunity to significantly increase its business. In order to achieve this, it needed to increase its hourly labor force by about 125 employees over the next year. However, the local Danbury labor market was experiencing unprecedented low unemployment. The human resource department thought they could find enough new employees, but indicated they would have to be very creative (for example, by using bonuses to current employees for successful referrals, open houses to recruit applicants, etc.) and, importantly, by recruiting recent immigrants whose English was likely to be very poor.

In the past, Barden had found that, for example, Portuguese immigrants became very reliable, long-term employees. Barden had used a “buddy” system to help new employees learn their jobs and to acquire an adequate “Barden” work vocabulary. But it was clear that this would be inadequate to prepare— in a short period of time— the large new group of potential employees that had been identified. It turned out that there were a significant number of bright recent immigrants from a large and diverse number of countries (e.g., Laos, Cambodia, Brazil, Colombia, the Dominican Republic, Guatemala, Chile, Lebanon, Pakistan, Thailand, and Yemen), but who spoke little or no English.

To become functioning, qualified Barden employees, newcomers would have to master the basic “Barden” vocabulary and be able to look up standard operating procedures as well as material safety data sheets, and master basic shop mathematics, measurement processes, and blueprint reading. This was a major challenge for the immigrants, even though many of them, it was discovered, had received surprisingly good educations back in their home countries. In order to teach these new employees enough English to pay their way, a language training firm, Berlitz, was retained to develop a special, intensive course in cooperation with Barden’s training unit. In a fairly short period of time six groups of eight new employees were taught through this special program. All the students were put on the payroll while they met with a Berlitz instructor for four hours a day for 15 consecutive workdays during work hours.

The program had a number of effects, beyond enabling Barden to fill its employment needs to meet its new corporate growth strategy and to integrate this veritable United Nations group into its workforce. The confidence level of the students soared as they used their new language abilities. Barden’s supervisors were impressed— and gained some new cross-cultural awareness and competence as well (which came in handy over the next decade as Barden became an international company). And the word spread to the community with the positive result of attracting new high-quality recruits.

In 1991, Barden became affiliated with FAG, a German company in Schweinfelt, Germany, and Stratford, Canada, and later developed subsidiaries in the UK, as well. Today, Barden/ FAG is recognized as the industry leader in the manufacture of ball-bearings to super-precise/ super-critical tolerances, for machine tools and special machinery and equipment in the aerospace, automotive, and medical industries. And their success has been recognized as deriving, at least in a major way, from their diverse and multicultural workforce. Sources: Schuler, R. S. and Walker, J. W. (1990). Human resource strategy: Focusing on issues and actions.

Please answer with 250 words or more for each Discussion Question 1, 2, 3, and 4.

1. Are immigrants a good source of workers to fill vacant positions? What are some of the barriers to employing immigrants? Are immigrants always welcomed by every country to fill job vacancies?

2. Do current global demographics accommodate or require the hiring of foreign immigrants? Should a consideration for foreign immigrants be part of every firm’s workforce strategy? How do host-country and third-country hires relate to the hiring of immigrants?

3. What cultural barriers had to be crossed with the hiring of immigrants at Barden? What cultural challenges do you think were experienced with the affiliation of Barden with FAG of Schweinfelt, Germany, and Stratford, Canada?

4. How would you (as Barden HR manager) have dealt with the need for new employees and then global expansion?

Explanation / Answer

1. Immigrants are a good source of workers to fill vacant positions, if the laour force of the country is facing low unemployment levels, or the immigrants being hired are giving better performance at lower pay levels than the local workforce. But, there are many barriers in hiring of immigrants, like Barden faced, lack of knowlege of language and skills that are needed for basic functions of the job, like being able to look up standard operating procedures as well as material safety data sheets, and master basic shop mathematics, measurement processes, and blueprint reading, etc. Hence, hiring of immigrants leads to higher costs of recruiting, hiring, and training. The hiring of immigrant workers also pose a challenge to the firm of reatining those immigrants in the organization. Once the firm has spent so much on there hiring and trsining, the firm soednot want to lose its workforce, hence managing turnover of the immigrants is also a challenge, for which the firm has look into the welfare and development of those workers.

Immigrants are not always welcomed by every country to fill job vacancies. If the country's job market has high level of unemployment, then the country wont welcome immigrants to fill the job vacancies. Also, there are issues like illegal immigration that pose a huge challenge for the country. Inter country relations also affect the choice of immigrants fo rjob vancancies in a country, as immigrants from poitically rival countries wont be welcomed in a country to fill their job vacancies.

2. the current global demographics do accomodate or require the hiring of foreign immigrants, as due to globalization, MNEs are expanding their domain to many countries, due factors like better market capture, lower labour or material costs, better skill available, etc. Due to globalization, companies need to have multinational workforce, in order to gain from the globalization , and also multinational workforce offers new perpectives to the organization in the form of new ideas, or help in decision making by evaluation of more options, etc. Hence, multinational workforce is the need of the hour, and hiring immigrants helps the MNEs get the work done at lower pays, better retention and at ties higher productivities. Hence, every firm should consider hiring foreign immigrants, but keeping in mind its domain, and requirements as hiring immigrants also bring challenges in management and development of workforce. Host country hiring means, MNE hiring people from the country it has opened its subsidiary in, for working in that subsidiary, and third country nationals are the people hired to work in the subsidiary, from a third country, i.e. person not a national of the parent country (the MNE's HQ are in the parent country) and the host country(MNE's subsidiary is in the host country). Hiring of host country and third country nationals, is also like hiring of immigrants, as the need for training and development is still there for getting the standard of work as needed by the MNE, and it also have the benefits associate diwth the hiring of immigramts like, bigger knowledge pool, better loyalty, lower costs, etc.

3. The cultural barriers that had to be crossed with the hiring of immigrants at Barden, weas that there were a significant number of bright recent immigrants from a large and diverse number of countries (e.g., Laos, Cambodia, Brazil, Colombia, the Dominican Republic, Guatemala, Chile, Lebanon, Pakistan, Thailand, and Yemen), but who spoke little or no English. To become functioning, qualified Barden employees, newcomers would have to master the basic “Barden” vocabulary and be able to look up standard operating procedures as well as material safety data sheets, and master basic shop mathematics, measurement processes, and blueprint reading. This was a major challenge for the immigrants, even though many of them, it was discovered, had received surprisingly good educations back in their home countries. Hence, to train them in basic english, Barden had to put in extra efforts and money. A language training firm, Berlitz, was retained to develop a special, intensive course in cooperation with Barden’s training unit.

Cultural challenges experienced by Barden, with the affiliation with FAG of Schweinfelt, Germany, and Stratford, Canada, would have been same as the hiring of immigrants, i.e. the language barrier. Also, in order to maintain the standard of work as BArden was doing, training of the workers in those subsidiaries woud also have been a challenge for Barden.

4. As Barden HR Manager, I would also have tried creative ways for hiring new employees like referral bonuses, buddy system, bulk hiring from educational institute campuses, job fairs, etc. To hire from other countries, I would have contacted the agencies that help in immigration of people, to identify bright propective workers in the need for jobs, used buddy system, teamed with hiring firm in other countries, fo rbulk hiring of immigrants for Barden. For managing global expansion, after affiliation, I would have preferred the subsidiary workers to be retained, and trained for additional skills needed for the work. Also, for higher positions like top management, I would prefer to hire host country nationals, and get them trained on job and by the top managemnt in the parent country. Also, once the subsidiary started working smoothly, I would like to keep in consideration the development and welfare of the workforce to ensure thir loyalty and low turnover rates.

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