LVMH is the France based organization and one of the leaders who deals in the luxury brands and has more than 50 prestigious brands of which all are having innovative history and culture. Some of the brands which have earned lots of fame are Chateau d'Yquem, Moet & Chandon, Hennessy, Guerlain, and Louis Vitton. The significance of all these brands is that the organization possesses the substantiality in all these brands. The organization's corporate history has been divided into many phases in which the various groups such as Moet Hennessy and Arnault involved in the business at different phases. The organization entered in watches & jewellery and selective retailing. Its business has been stretched in five different geographical regions such as France, Europe, the Americas, Pacific and Asia and Japan and at all these places it handles the human resources development processes also.
Best fit model:
The organization's emphasize is on to prefer the type of HR strategies which must with the background and the internal and external situation of the organization. The term 'Best fit' refers to incorporation of organization' business strategies and HR strategies.
The team of human resources encompasses the stock of knowledge, abilities, motivations and attitudes of the employees. The organization modifies and progresses on the bases of the flow and waves of its best asset of human capital.
Best practice model:
This model is based on the ground of the hypothesis which says that there is a structure of the superlative HRM policies that are universal in the perception that they are the most suitable in any circumstances and that their adoption will conclude in the superior organizational performance.
LVMH HRM strategies are surplus of essential and obligatory for business groups and organizations through adaptable rule it give the organization. Corporate HR aims to organize some measures, to explain the plan and to enhance the performance of the HR teams. The main character of this policy is it avoids the imposing attitude.
In LVMH's scenario the employees act together with the organization which answers to corporate headquarters. Nearby 35 to 40% developments are accomplished by the organizations and the rest are done by the corporate.
In LVMH there are four segregations in the levels of the managers who handle the four levels according to group structure which are corporate, regional, business group and company level. The subordinate HR Director or the acting person for this position answers to the subordinate President. The subordinate HR Director acquires the suggestions from his organization. The HR Director of the business group manages the overall HRM executions with the help of the companies' HR Directors with who he/she used to be in touch by organizing monthly meetings and conferences. Among the many agendas, the purpose of these meetings used to identify the organization's requirements for the particular positions and to consider the list of the potential candidates who cha fulfill the requirements of the referred positions among which one is ready to Move. Being a Ready to Move suggests that the company has identified him or her as having he potentiality of development with the help of new projects within short span.
International mobility is very significant in developing prospective career. Its prime objective it to develop the international managers in higher number who can achieve the far more than the basic grounds. For instance the HR supreme recalls the instance of French insurance specialist in fashion business who had been appointed as the chief of the shoes factory in Romania. Knowing the risk the LVMH applies this practice for feasible future. It requires for them to be in fresh situations to enable them in developing fresh abilities and establish their temperament.
LVMH career progress strategies' objective is to smoother the mobility process to cope with international environment. Being aware that ethnocentricity of the top management. HR follows their character. Most of the organization's senior executives and 35% of the managerial staff and 38% of global workforce are French. HR should concentrate on developing more global managers in order to enable them to be the part of globalize top level management. LVMH mobility process exercises for the development of the HR teams who mostly consist of local talents.
When any kind of educating task which leads to the gain of particular knowledge and skill in order to serve the occupational task. On the whole, training is the task to be pursued for enhancing the knowledge or skill.
Learning is the course of developing knowledge, perceptions, abilities and principles with the purpose of adapting the environment which we belong to. In general it is the multifaceted procedure of getting knowledge and skill.
Development of performance:
A proficient stipulation of learning exercise in the job center which aims to improve performance standards. (Harrison, 1992.4). The development process is inevitable for all the employees engaged in the various tasks and for all who pursue various responsibilities as the organization has to upgrade its performance standards to match with the external professional standards. In very simple words it is a process which is done in order to better the performance.
Basic Overview of Systematic Approaches to Training and development:
It is a methodical approach which includes unavoidable training procedures which focus on the necessities of the organization. There are segments of this process which are:
With the help of this approach, organization's aspirations for employee can be assessed and the aim behind the training could be recognized with the intention that the employee's abilities match with the organization's needs. Usually it also helps to identify that when the training should be given and who should participate it.
This approach develops the training structure in which the learners and the coaches execute it for satisfying the learning purpose. The main components for it are the assessing the learning purposes, needed finance and course's outline, topics covered in course and the lessons.
Development of supporting tools:
There are various tools such as relevant audio visual, graphics manuals and so on which are used to accomplish the process of development. They are known as training materials and important components of the training packages.
Implementing is process of the execution of ideas developed to serve the specific aims. Here it is referred in the human resources development context and done with the help of training literatures, tests designed to examine the skill in specific areas and the assessment of the whole process.
This is very significant part of any process, failure to which the chances of failure of the whole process and the all the endeavors are significantly higher hence it must be done at the end of each phase such as prior to training, during the training and after the training execution.
Learning and development strategy of LVMH:
The LVMH's preference goes with the usage of term 'International Mobility' instead of the term 'expatriation'. The term international mobility means continuous movement whereas the expatriation means methodical repatriation. The strategy of international mobility is the segment of career development plan which needs to train the international managers on restricted time basis. LVMH does not intend to produce a mass that pursue their jobs outside their own country but many times in the similar nation, retaining their benefits as in those instances, expatriate are separated from their own country. Further these kinds of exercises are bit expensive.
The traits of the intercultural training are more likely to the project than to a real practice. Until now it was not prioritized due to the international profile of the expatriates. LVMH is facing increasing pressure to develop its expatriates for its global projects for making the process of cross-cultural tuning smooth which eventually will enhance the momentum of the intercultural adjustment process. For LVMH it is advisable to advance for the enhancement of the training for both the employees and their families. Temporarily it should be initiated for pre-departure and post- arrival training of language course. Apart from that the international positions must be filled as soon as possible due to which there used to be very less time for such training. As a result the training near to basic level or of basic level used to be given even for the nations such as Brazil or Mexico where people are anticipated to adjust themselves. Though they are not pressurized for delivering better performance as it used to be with the people who had been given the proper training. They are paid for the introductory field trips and many times the subordinates aid the newly joined employees. Many times it had been seen that due to the lack of sufficient manpower the HR department can not assign anybody to aid newcomers.
With the increasing global projects the LVMH group must think about the future requirements. The organization must endeavor to reinforce its proficiencies and capabilities to support the organization's HR teams. It must think over for the HR System which has to deal with the organizational growth and with the increasing expatriates.
One of the significant parts of the LVMH's management strategy is the international transfer policy. It has been given unambiguous authorization to stretch the organization's key principles which are conservation of independence and stimulating entrepreneurship. It is also a segment of the process which should be used by LVMH to decide the future strategy for career development.
The organization must ponder for finding innovative paths for development of its global mobility strategy in order to strengthen a career development policy. Eventually, the issue for LVMH is to identify the way that the career development strategy can assist in better way to the strategy of global development.
The evaluation of the HR performance can be done on the bases of the recruitment system and selection procedures of that organization. Here we will study and evaluate the performance of HR department of the LVMH.
Recruitment is a procedure which seeks the suitably qualified contenders for specific positions along with the appropriate selection out of the options available and appoints a capable persons or person.
Three phases of recruitment: there are three phases of recruitment (Barber, 1998):
- Accumulating applications: Creating interest among the people to apply
- Retaining the Application status: Motivate the people to retain their interest
- Influence the people: Influence the people's choice for the job position
Selection is the process to determine the appropriate and competent candidate for the required position with appropriate techniques. The decisions relate to the selection must be on grounds of cautious evaluation of the evidence. Though it has been seen that in spite of the efforts of making the selection process objective and methodical they used to be affected by subjective attitude.
Methods of selection:
Selection process has been divided into three segments:
Reading the application form:
The form might have been filled before or at once, but the facts required to be checked out are the details related to the age, education, external qualification, previous experience, interests and hobbies. All these details are helpful to differentiate the candidates on suitability level. In some cases they ask for the references and their details. The CV can prove the alternative way of acquiring the details of the employees.
Interviewing the candidate:
With the help of the form or CV the employer gets able to find whether the candidate's background is suitable for the organization or not. In some cases, interviewers ask the candidates the general questions of which the answers should be the prudent. Sometimes the candidate's attitude also used to be one of the criteria to measure the candidate's suitability with the job.
Offering the job:
In some cases the interview process used to be divided into phases and in some cases the employers offer the job at once if the interview is successful. Sometimes the employer will wait to approach the referees to have the surety of the character of the candidate and the information provided by the candidate.
Importance of international recruitment on LVMH:
For developing a huge team of global managers, LVMH should develop the global recruitment procedure for sending its employees on global projects. LVMH has earned remarkable success for French projects but has not been that much successful in global labor markets. In order to accomplish global recruitment the organization must have to succeed in development of its employees' international skills. One of the most significant parts if LVMH's HRM policy is expatriation.
LVMH should go for expansion of its human resources to more height on international horizon. As it has got decentralized business structure, its website and on-campus job fairs are the prime sources of candidates. With the help of this website the contender belong to any nation get direct access to any of LVMH's subsidiary even in another nation and get a local employment contract.
To be able to strengthen the global market expansion, the total number of employees associated in global transfers is enhancing. LVMH's team of international managers will be widened through third-country nationals and mainly multi-cultural profile.
The organization inclines to appoint more numbers of the employees having global profiles. The person who has immersed in various cultures, has traveled comprehensively, does have fluency in at least three languages and has an open mind is the ideal candidate.
At present the total expatriates at LVMH is 285 and increasing, 65% of them are French. Impetrate are 3.5%, along with the third nation nationals are 17.8% employees on global project. The average age ration is 39 years, 52% if them are under 35 and 7% are over 50. Among the total expatriates general managers, area manager and brand managers account for 35.5% while finance and audit staff for 14.5%, marketing for 16%, store managers 7% and HR staff 6 % of expatriates, and rest 32% comprises of other positions.
All the details and figures suggest that the global recruitment is the very crucial exercise for HR activities within LVMH.
To be able to sustain with the competitive market place, LVMH should consistently develop a sound association between the employer and employees and the authority should focus on both types of talents; local and outsiders. Right from its foundation the organization has been the global business but it has been found many times that its human resources were facing problems due to the lack of enough global experience. To be able to deal with the extreme competition, it has to attract, grow and retain managers with international capability. To be able to serve this aim, the comprehensive assessment of the situation is inevitable to cope with the relevant problems and upgrade the organization's standards to match with the global environment along with the risk to develop the business accordingly. The global mobility and intercultural training of the employees in LVMH is covered in the report. Task 1 covers how the LVMH involves the best suitable and resource oriented model in their human resources planning and development while task 2 describes the reasons for why the LVMH should in stress on intercultural training to correct its planning for learning and development area in order to develop global staff.
In spite of the limitations of LVMH's model for recruitment, selection and performance development due to which the employees may have to face problems, the author have identified some significant ways to improve it. Firstly the author recommends the LVMH to stick with its resources base model. In task 2, the author recommends that LVMH must emphasize on the development of the training of the internal employees instead of the intercultural training and international mobility. In task 3, the author suggests that the LVMH must prefer their hoe based recruitment as often it has been experienced that the local talents are more effective than the outsiders.
Limitations of the report:
The study had overlooked some basic flaws which have been distinguished by the author during the study and the time of working and data collection:
- Limited data collection owing to high load of the employees.
- Some significant information could not access as a result of the organization's security measures for confidential matters.
- This has been study exercise and with limited experience this is the best try to address it with full of caution of avoiding errors.
The details provided in the case study suggest that there has been vast improvement in the organization's strategies related to the international mobility and education of English language to strengthen the LVMH's goal to cope with global competition and accomplish the organization's aim through the knowledge based HRM.
Being a student I would not be able to give many suggestions on the bases of limited information of the organization which is successfully doing business since more that 4 centuries. There is a vast history of fame and accomplishments which the organization had earned with the help of their operations structure and their workforce. Being a student, I am not of that class of the persons who can advice the board of directors of the organization who have proved their brilliance in their planning of HR development strategies and their execution.
- www.lvmh.com date visited 03/02/2010 at 6:45 pm
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