LVMH is a luxury brand based in Paris. The company was established in 1987 with 50 prestigious luxury brands. The Paris-based maker of Louis Vuitton handbags, Hennessy cognac, and Tag Heuer watches saw sales top 4.47bn Euros ($6.3bn; £4bn).
As LVMH is French company with all its main offices and headquarter in France but yet the management of company is multi-culture.
Structure and Operations of LVMH
LVMH is made up of 50 companies managing 450 subsidiaries, LVMH carry out its HR activities in five main world zones (i.e. France, Europe, America, Pacific Asia and Japan). As LVMH is a multi culture organisation so they develop their employees / managers skills to perform the company operations smoothly in a multi culture environment, they don't follow the procedure of intercultural training because most of LVMH expatriates have some international experience, or have their studies in this field. So, this is the reason they are meeting their goals and objectives successfully. But now the cross culture adjustment process but now they are investing much more on cross culture training of expatriates and their family.
Identification of HRM Activities
- International Mobility & Career Development
- Training and development and (T & D)
- Employees Assessment
INTERNATIONAL MOBILITY & CAREER DEVELOPMENT.
LVMH is a multinational organisation, They enhance the knowledge and communication skills of their managers and give them opportunities to meet their basic requirements. LVMH plans for the career development of their employees to train their employees for achieving the objectives and goals of the company.
The international mobility policy is a part of career development which requires the training of global mangers on limited time basis. The HR department convince a manager to become "internationally mobile" by offering them more challenging job with more freedom to perform his task than home. One positive aspect of LVMH international mobility is to take risk in order to develop high potentials.
Training and development and (T & D)
Development is the process which is completely depends and belongs to the particular employee. The employee who is under training is actually developed by the organization in order to make them more skilful. . For example IT companies will train their employees the required computer skills. . The organization will get benefited by deploying this simple rule by appointing fresh graduates for lesser pay. The training process includes all the strategy for working in different culture and different business environment
Assessment is required to identify employees' strength and their ability of work. LVMH assessment system is different from the set methods because through this assessment LVMH not only based on results but also to recommend and execute new ideas. Through this system an organisation can appreciate the ideas given by the low level employee and give the benefits to the employee which is very healthy practice and good for the organisation as well as employees. So, LVMH try to attain its business targets and objectives through assessment system.
HRM Model at LVMH
LVMH is using best fit model for its human resource management. Through this model organisation can easily classify HR methodology which beneficiary for the organisation.
Justification of using Best Fit model
LVMH is working in different countries dealing with different cultural people, as HR activities vary from cultured people, as HR activities vary from cultural to cultural, so using the best fit approach they deal each country / subsidiary in the way which best fit them. At LVMH the HR strategies and business strategies are inter dependent, which is according to definition of (Armstrong, 2003) states that best fit approach is "Inter-dependence between HR strategies and business strategie".
Fombrun identified four common HR processes performed in every organization:
- Selection: Selecttion of matching people to jobs
- Appraisal : Appraisal of performance
- Rewards: Rewards of emphasizing the real importance of pay and other forms of compensation in achieving results
- Development: Development of skilled individuals
Training and Development of Methodology at LVMH
Training is the process of "altering employee behaviour and attitudes in a way that increase the probability of goal attainment" . Development is "any learning activity which is directed toward future needs rather than present needs, and which is concerned more with growth than immediate performance" .
New experienced staffs
In this case organization will deploy a training process for such executives who have experience in the same field before. Some organizations won't trust on the long term training process. Instead to doing long term process they can train the experienced staff of the lesser time period. . These kinds of employees will be flexible on doing their work in different county and with different culture and environment. Some experienced staffs new innovative strategy can be adapted to the organization if it is really applicable to that current circumstance, the amount of capturing and problem solving will be to the maximum by the good experienced staffs, it will be easy for the experienced staffs to understand the organizational issues and even the skilful staffs can suggest the best possible strategy for that problem.
Training & Development in LVMH
LVMH is using three main methods to improve the personal and professional skills of the employees. These are as under
A).Training & Development Programs
LVMH requires intercultural training to adjust swiftly, because international position usually has to be filled very quickly, which leaves little time for intercultural training. They are extending training to both the employees and his or her family, and for time being both pre departure and post arrival training limited to just language training,
This is an annual process in which the HR objectives of the company are reviewed and set the organisational need for the next three years, that which employees need what sort of trainings and list the potential employees ready for international assignments and to prepare them and train them for the top management position.
c): Inter Cultural training
LVMH is trying to sort out the potential individuals who are ready to go for an international assignment and have capabilities to carry out the duties of expatriates. The company provide so many opportunities to its international mobile staff, it attract mangers to international assignments through exciting career development prospects and not through economic incentives, even though its incentive program is competitive. Recommendation for LVMH Board of Directors
Keeping in view the above discussion about the training and development in LVMH, I will recommend the board of Directors of LVMH as
- In LVMH every individual having the equal right to get enough time to familiar with the culture and living style of the people in new country. So, it is recommended that LVMH also deploy the local people of the country because local person know the attitude and behaviour of the people of their country that could be very beneficiary for the company's growth.
- When an employee is going to take position as expatriate he / she should be provided enough time to get trained about that country culture, people life style, management styles preferred in that country and the environment of business.
- LVMH management believes in international mobility, and select those employees who has some past international experience, but that is not enough to hold an international management position. So, it is recommended to start a structured long term training program to develop a pool of employees for international mobility.
- LVMH has the opportunity to have proper training and development courses for their support staff and non managerial employees to improve the standard of their daily organisational and business activities.
What is Balance Scorecard
The balanced scorecard is a strategic planning and management system that is used extensively in business and industry, government, and nonprofit organizations worldwide to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organization performance against strategic goals.
LVMH Balance Scorecard
In LVMH Balance Scorecard is using perfectly which shows to review that how HR performance is indicated and monitor. They following steps indicate the HR performance in LVMH;
- Financially Perspective
- Customers Perspective
- Internally Process Perspective
- Learning & Growth Perspective
With the implementation of a corporate database, it is hoped that more of the processing can be centralized and automated. But the point is that the current emphasis on financials leads to the "unbalanced" situation with regard to other perspectives. There is perhaps a need to include additional financial-related data, such as risk assessment and cost-benefit data, in this category.
These are leading indicators: if customers are not satisfied, they will eventually find other suppliers that will meet their needs. Poor performance from this perspective is thus a leading indicator of future decline, even though the current financial picture may look good.In developing metrics for satisfaction, customers should be analyzed in terms of kinds of customers and the kinds of processes for which we are providing a product or service to those customer groups.
Internal Process Perspective
Internal business process objectives address the question of which processes are most critical for satisfying customers and shareholders. These are the processes in which the firm must concentrate its efforts to excel.
Suggested HRM methods for LVMH
Interviewing in international standards:
In many global organizations the interviews are conducted through phone for example the outsourcing companies will expect their employees to have strong command in the communication so what expect is the proper language communication so that they test it through phone this type of interviews are called phone on one. And through internet the organization will conduct interviews for example the web designing company will offer an online interview for the people and what the company expect from them is to make a web presentation or a layout. Who every is skilful to do it by consuming lesser time will be preferred by the organization. So in these ways the online and phone interviews will be conducted. On by practicing these interviews the amount of time, energy, and cost can be saved. The organization (LVMH) should needs to concentrate on these methods and also they can improve their direct interviews by checking the candidate's competencies by asking questions on customer focus, team work, and quality focus and also to check the candidate's communication skills and influence over it.
As a conclusion, all the above said suggested strategies will be useful for the organization and they can get skilful employees for their business. Their main drawback is that they lack in international HR management and thus they can rectify the problem in this particular department by following all above said strategies which are all applicable for international standards. Since it is an international company (LVMH) it should concentrate in the international recruitment and selection process. And thus by following the best possible strategies LVMH can easily achieve their mutual goals and target to become undisputed leader in the global industry.
Dr. Roman Puchkov: Lecture in LONDON SCHOOL OF ACCOUNTANCY AND MANAGEMENT (LSAM)
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