Nippon Steel & Sumitomo Metal Corporation-Samples for Students

Questions: 1.Provide an Introduction to the report that clearly states the aim and structure of the report, and provides justifications of the HRM issues discussed, looking into with key strategic aims of the organization. 2.Critically analyse the Internal and External Environment for your chosen Organisation. Answers: 1.Founded in the year of 1970, Nippon Steel Sumitomo Metal Corporation has emerged to be the third largest steel producing organization in the entire world (Nssmc.com 2017). Nippon Steel Sumikin Engineering Co., Ltd. (NSENGI) with its more than 40 years experience, mainly in Southeast Asian projects, has laid many long-distance, large-diameter, high-pressure submarine pipelines for oil gas projects, which meet demanding requirements for high reliability.Considering the fact that the human resources are the most valuable management resources, the Nippon Steel Indonesia does employ a variety of impressive HR practices that helps the company enhance the skills of the employees and encourage them to demonstrate their ability. Hence, the present report intends to discuss and critically analyse the existent HR policies of the company, and offer recommendations, if any. As far as Nippon Steel is concerned, it has been created by merging two giant steel companies, Yawata Iron and Steel company and Fuji Iron and Steel Company. The company is known for offering a wide range of products including flat and long steel products, wire products, chemicals and plates. The company has been operating globally almost since its inception, and the total number of employees working here sum up to 60,508 (Nssmc.com, 2017). The importance of IHRM practices cannot be undermined, as it is the strategic way through which the Human Resource manager of an organization aligns organizational goals with employee benefits, motivating the staffs to work more dedicatedly towards the accomplishment of the organizational goal. Nippon Steel believes in enhancing the skills and expertise of the employees, so that they can embrace leadership roles in future in an effective way. Hence, Nippon Steel promote activities like the early work abroad experiences, study abroad opportunities in designated regions, and internal courses (Moriguchi 2014). Besides, the company offers skill training to its employees, especially the local, inexperienced and semi-skilled staffs of Indonesia, so that they can deliver high quality performance in future. This not only helps the company train its employees, but also enjoy employee loyalty. Those employees, who join the company as working staffs, if exhibit special potentialities, are being offered career growth opportunities as well, as they are enrolled in leadership programs at the expense of the company. The company also believes that in order to increase employee engagement at workplace, it is important to value the employees. Accordingly, the management authority of the company holds meetings with the employees, to assess the total annual working hours, and to reduce the same, if necessary. Besides, it is equally important to state here that that the company also promotes specific measures for the prevention of overwork, such as the establishment of bonus annual leave (approximately 10 days annually) and workload countermeasures in cooperation with a supervisor and / or industrial physician (Giarratani et al. 2013). Although the existent HR policies are indeed impressive, further recommendations can be advised. Since Nippon Steel is a steel manufacturing company, occupational injuries are common. The HR practice should include investment in the safety management system to reduce chances of occupational accidents. The company should also reduce its working hours, offer flexible work schedules and work from home facilities once a week (wherever applicable), and provide cultural training to its employees. These are the basic HRM strategies undertaken by the company in the international strategy. While speaking of HRM in the international setting, the basic function of the HR of the company is to offer intensive training to the expatriate employees, so as to enhance their linguistic skills as well as their cultural sensitivity in a foreign nation and an alien culture. Again, similarly, sufficient training is also being offered to the impatriate employees ho are coming from foreign lands in order to work under the host country, and consequently they must be made aware of the organizational culture prevalent in the host country. Another very important function of the IHRM at Nippon Steel is to offer sufficient compensation and lucrative incentive packages to the employees who are relocating to other locations, for the sake of the organization. Hence, the HR manager offers lucrative bonus as well as other financial benefits for shifting to the foreign location, though the % of salary increment depends on the country location and local market cost of living. In fact, as an import ant IHRM function, the company also offers allowances for cost of living, housing, food, recreation, personal care, clothing, education, home furnishing, transportation, and medical care. Other than this, the IHRM also is responsible for offering other allowances, and Nippon Steel, for example, offers home-leave allowances and relocation allowances. The HR manger, as part of an important IHRM function, also organizes meetings with the managers and CEOs of the different branch locations of the company, and ensures proper coordination amongst the different branches. Nippon Steel follows the ethnocentric IHRM model, whereby the managers as well as the technical workers working in different locations of the company are advised to follow the HRM practices of the home country only. 2.The performance of any organization is not only guided by the human resources or the financial resources, but also by the environment in which the organization operates in. As a strategic tool, the environmental analysis of an organization helps in identifying the internal and external elements that affect the performance of the company. Accordingly, the internal and external analysis of Nippon Steel is also being conducted as follows: Internal Environmental Analysis 3Generic Strategies: While analyzing the internal environment of Nippon Steel, it would be interesting to take note of the important generic strategies undertaken by the HR manger of Nippon Steel as part of its human resource management strategy. First of all, innovation as a strategic imperative of HR management is embraced by the management authority of Nippon Steel. In order to create dedicated employees, the company offers flexible working schedule to the employees, and offers 3 work from home facilities a week to the employees, that help in motivating the employees. As part of the organizational strategy, innovation is achieved by offering intensive communication and managerial training to the employees. However, the company is still mindful of its cost reduction strategy, and hence it does not offer training to the employees at free of cost. The employees are enrolled in a variety of professional training courses, on the completion of which they not only enjoy career growth opportunities but are al so offered certificates from recognized training centers. The employees can avail the courses at lower cost, as the company deducts a very small amount of money from the employees salary every month, so as to enhance their skills and expertise, without affecting the profitability of the company. Besides, innovation is an important key strategy of the company, and the operating strategies of the company are developed through interactions with its employees, customers, partners, vendors, suppliers and consultants. They review market trends and identify, through benchmarking, what is required to out-perform their competition. Every week, the HR organizes interactive sessions with the employees and stakeholders, in order to communicate the innovative strategies of the organization (Druker, 2014). Another important cost-reduction strategy adopted by the company is the introduction of a variety of expat packages. In other words, the company offers local or local plus packages for developm ent or volunteer assignments; expat lite is being used for moves in markets where talent is widely available or early localization is desirable; and full expatriate packages is being used for senior level executives and leadership positions. Quality is also an important generic strategy adopted by Nippon Steel. The company does offer career growth opportunities to all its employees, and in case of exceptionally taented employees, the company offer huge concessions on the training courses. Apart from personal motivation, much attention is also being paid to the infrastructural facilities such as the physical layout of the office, facilities, hardware and software, communication equipment, etc so that the employees can work in a very comfortable way. External Environmental Analysis PESTEL: Political Factors While operating in Indonesia, Nippon Steel will need to be well-aware of the political instability of the country and that as much as 22% of the people in Indonesia are presently living below the poverty line (Hassan 2015). Economic Factors Although Indonesia does enjoy a good inflow of FDI amounting to $67.3 billion, the country cannot be termed as an example of a strong economy. In the entire world, Indonesia ranks 157 in terms of the per capita income of the citizens, and it is still a developing nation (Waworuntu and Suryanto 2015). Social Factors The country enjoys a large population, a total of 240,271,522 populations which is growing at 1.13%. The prospects of sale of any product are higher here, given the higher consumption rate of a densely populated nation (Arifin 2016). Technological Factors The country does enjoy a very highly developed and effective transport and communication system. Environmental Factors The environmental laws are very strict mandating the use of energy efficient means of production. Demographic Factors Issues relating to access to health and education as well as rising inequality are the most pressing social challenges the Indonesian people are encountered with. Hence, it is advised that in order to gain competitive edge over the rival firms, a company should invest in social initiatives. The country has a patriarchal set up, which makes it difficult to entrust managerial duties to the women. From the above analysis, it is clear that Nippon Steel does have prospect in Indonesia, considering the dense population of the country. However, since it is still a developing nation, the company will need to reduce its operational cost and offer low cost products. Accordingly, as part of its cost reduction strategy, the company can hire the semi-skilled local workers, and train them to work efficiently, at low cost. In Indonesia FDI is restricted in most ofthe sectors and the business environment is not good because of persistent corruption and natural disaster, and hence it is advised that the company does not focus all its resources in Indonesia. It can manufacture its products mostly here, because of the cheap availability of raw materials and labour, and export the majority of the products to other parts of the world. However, the Indonesian market also assumes great importance since Frost Sullivan forecastsIndonesias vehicle sales to reach 1.1 million units in 2017, growing a t a rate of 5 per cent, and hence the company can expect a steady growth in the sale of steel sheets (Natsuda et al. 2015). Reference List: Arifin, B., 2016.Institutional constraints and opportunities in developing environmental service markets: lessons from institutional studies on RUPES in Indonesia. Bogor, Indonesia: World Agroforestry Centre (ICRAF). Drucker, P., 2014.Innovation and entrepreneurship. Routledge. 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