Jan 12, 2018 in Business

Integrated Recruitment Strategy in Action

OBI is a renowned multinational company that operates in most European countries. Arguably, OBI is among the largest companies in Europe with over 500 stores operating in 10 European countries and employing at least 40, 000 workers. Over the years, OBI has planned to expand its stores all over Eastern and Central Europe. Their main agenda is to be the market leader within Europe, which would enable them to increase their international shares from one third to one-half in roughly four years. Unlike many other companies in Europe, OBI has always used a different approach to the market. As they run most of their stores in countries like Ukraine and Russia, they entered into joint ventures with the local partners with the aim of expanding their market.

This paper will analyze several issues about OBI’s business style; for example, how they created their centers of competency and how they capitalized on the strengths of its multi-domestic strategy. The main purpose of this paper is to create awareness about the success of the OBI companies and the way they handle competition.

How OBI Capitalized on the Strengths of its Multi-domestic Strategy

OBI is among the largest companies in Europe and thus needs proper management to remain at the top. Initially, the company had issues with its multi-domestic approach and there was need to change it. Armstrong (2008) asserts that OBI Company has several stores all over Europe each headed by a branch manager. Notably, all those managers were decision makers and might not even consult the head office. Therefore, the company had to capitalize on the strengths of its multi-domestic strategy, which was achieved by OBI setting up centralized governance. The centralized governance meant that all the other branches of OBI all over Europe had to report to the general manager of the head office. The change in their multi-domestic approach was ideal since every other branch would get the same information from a centralized place. However, the general manager was not sure if this would work since he believed that some branch managers would rebel for some rules would not cater for their countries’ needs. That brought in the idea of the general manager coming up with headquarters throughout Europe where they head their stores.

The Reason for OBI Setting up Centers of Competency

Notably, OBI has over 500 stores spread all over Europe. All those stores had their managers who would make decisions for themselves since the central office would not provide solution to some issues. The main reason for OBI to come up with Centers of Competency was to provide solutions for some significant issues that were affecting the company.  Briscoe, Schuler & Tarique (2012) affirm that the branch managers were arguing that the company could not provide solutions to some problems that were affecting specific countries. That led to OBI coming up with Centers of Competency. Certain countries were named Centers of Competency with the belief that they could handle some issues better than the others could. Additionally, OBI started recruiting and training personnel from one country and later expanded to different countries. This was a challenging process since training and recruitment were different in each country concerned.  Oakes & Galagan (2011) affirm that there was a competition among the employees of OBI since everyone wanted to be the best. The HR managers could meet and interact, which enriched their mindsets with an international perspective on issues. The Centers of Competency were generally a successful move for the OBI stores.

The Effect of Shifting from a Multi-domestic to a Transnational Model of Organization Culture

It is vital to note that different countries observe different cultures and require all individuals to behave in a particular manner. The shift from a multi-domestic model to a transnational model would have significant influences on the organizational culture because of the differences in culture among different countries around the globe.  According to Flynn (2010), the shift affects organizational culture, as there is a change from adhering to the local practices of running an organization to adjust to the specific country’s requirements. This implies that a company shifting from the multi-domestic model would have to change its organizational culture to suit the specific target culture in the particular country of operation. Therefore, shifting from a multi-domestic model to a transnational model leads to a change in the organizational culture of a company because of the need to meet the changing needs of organizations in different countries. More so, the organizational culture of different companies is likely to be modified with new aspects. The company’s shift from a multi-domestic approach to a transnational approach would lead to the modification of the organizational culture to ensure that it fits into the country’s system. The modification of the organizational culture also leads to the compliance with the values and expectations of the country of operation.

Effect on HR

The Human Resource department is a vital part of organization as it facilitates recruitment, hiring, placement, training, promotion, and the dismissal of employees. The shift from a multi-domestic model to transnational affected the centralization of the human resource, as some countries were resistant to centralization.  Hill & Jones (2009) confirm that OBI had to work in line with effective standards that assisted each country’s managers in the development of the core processes of the human resource. The human resource management in different countries varied as OBI discovered that not all countries could operate in a similar manner. Therefore, different aspects of recruitment, hiring, and training were developed and applied to different countries. This means that different countries had to utilize the human resource practices that would fit their operations in a significant manner and ensure that all individuals got an equal chance of participating in the human resource operations of the company. Nelen & Hondeghem (2000) reiterate that OBI also had to create centers of competency and allow different countries to formulate significant aspects of the human resource that would lead to effective operations within the country. The allowance of each country to observe its own models of operations ensured that there was a significant growth of the human resource department of the overall company. Again, the human resource of OBI transformed effectively leading to different strategies of maintaining staff and observing the behavior of staff members in different countries.

Conclusion

In conclusion, the shift from a multi-domestic model to a transnational model implies that a company is moving its operations from a local level to an international level. OBI is among the largest companies in Europe and requires good management for it to stay afloat. Initially, they had issues with their multi-domestic approach and decided to change it. This was achieved by OBI setting up centralized governance. The centralized governance meant that all the other branches of OBI all over Europe had to report to the general manager of the head office. Additionally, a reason for OBI to come up with Centers of Competency was to provide solutions for some notable issues that were affecting the company. Setting up of Centers of Competency transformed the human resource of OBI leading to different strategies of maintaining staff and observing the behavior of staff members in different countries.

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