Entering Russian Market: Challenges for HRM of
Finnish Companies Results of Joined Research
“Finish STROI Business Network”
Vera Minina, Elena Dmitrienko, Anastasia KrupskayaP3 Competence of Human Resource
Agenda
• Short description of research project• Factors influencing HRM model
development• Differences in Finnish and Russian HRM
practices• Project business environment and
challenges for HRM• HRM model with focus on core employees• Conclusions
Short description of research project
STROI Business Network project
The aim of the research project was to develop and modify Finnish management and leadership models fitting to Russian business culture and context
The Object of the research – Finnish companies which belong to STROI business network and operate on Russian market
STROI Business Network projectThe Subject of HRM part of the Research:
• The features of HRM in Finnish companies belonged to STROI business network
• Human capital profile required for success in Russian business culture and context
Expected results were • Finding competitive and developing
working conditions •Creating HRM-model applicable in the
Russian market
The purposes of the Research To reveal differences in Russian and
Finnish approaches to HRM practices
To design Human Capital Profile
To work out the recommendations concerning HR practices improvement
Data base
10 Finnish companies which belong to STROI business network and operate on Russian market
17 semi-structured interviews
CEO 5HR managers 6Linier managers
6
Factors influencing HRM model development
Finnish companies
Russian market
Project business environment
Cultural environment
Cultural environment
• Values and attitudes of local employees: Russians do not resist to authoritative methods of management; they avoid uncertainty and taking responsibility, etc.
• Employer’s and employee’s behavioral patterns: personal relations between employer and employee are crucial for decision making, etc.
• National peculiarities of management system: in Russia the personnel are perceived by heads as unlimited, dimensionless resource; managers often ignore common rules and aspire to solve problems differently in each new situation, etc.
Project business environment
• The majority of the companies belonged to STROI Network operate in project business environment
• Project business environment is unstable and unpredictable
• Flexible organizational structure and client-oriented approach are crucial for gaining competitive advantage
Differences in Russian and Finnish HR and HRM
practices
Results of empirical research
Differences in HRFeatures Russian
contextFinnish context
Employees’ competences:• Decision-making skills• Ability to take responsibility in decision-making
- -
++
Decision-making practices:• Long term orientation• Thorough process• Speed of decision-making
--
high
++
low
Discipline on the work place• Using working time for private matters • Importance of following project schedule
+-
-+
The incentives and their impact on employeesIncentives Russia Finlan
dFinancial
Rewording for outstanding performance high high
Covering educational fees high low
Medical insurance high low
Pension programs low high
Support in housing loan and credit high low
Non financial
Work-life balance policy low high
Participating in decision-making process (for some groups of staff)
high high
Best employee recognition (from time to time) high high
Differences in HRM (1)
Features Russian context
Finnish context
Recruiting practices similar similar
Managing adaptation process:• Detailed program of adaptation• Coach support• Colleagues support
--+
++-
Reword system:• Clarity of parent company reward system
low high
Differences in HRM (2)
Features Russian context
Finnish context
Training programs similar similar
Employees` development:• Attitude to development discussion• Development discussion procedure
pressure
assessment
opportunities
support
Project business environment and challenges
for HRM
Result of literature review
Challenges for HRM in project business environment (1)
Project business features
Requirements to HR
Challenges for HRM
Highly dynamic relations
Mobility; permanent improvements
Environment and assistance for competences development
Partnership, collaboration
Social and communication skills
Network supporting
Combination of partnership and competitiveness
Reflexivity, negotiation skills
Focus on learning process
Challenges for HRM in project business environment (2)
Project business features
Requirements to HR
Challenges for HRM
‘Power to the edge’ management philosophy
Ability of taking responsibility
Trust culture creation
New business model: customer-centric approach
Expert service, integrated solutions
HRD approach
Complexity and uncertainty
Ability of risk taking and uncertainty handling
Learning by doing
Collective efforts and performance
Ability of working together, task forces
Team building and developing
Gap analysis
Cultural factors
Business factors
Problems
Low ability of taking responsibility
High ability of taking responsibility
•To find the employees with needed abilities and skills•To create corporate culture adequate to project-based business•To gain competitive advantage trough people
Undeveloped decision-making skills
High developed decision-making skills
Hierarchy-oriented behavior
Network-oriented behavior
Low readiness to follow time schedule of project
High readiness to follow time schedule of project
HRM model with focus on core employees
Results of empirical research
Core Employees (CE) focus
Lack of attention to identification of employees who are responsible for organizational competences Focus on people who are involved in core business
Identification those who have the ability to transform unique and valuable knowledge into organisational competitive advantage CE
CE need to be identified through required abilities (profile)
CE abilities: quotations from interviewsLearning do not afraid of responsibility
and decision-makingCompetence
strategic knowledge and multiple skills
Integration
transmit the feeling of companyhigh level of social or communicative skills, they create partnerships and networks
Reflection constantly monitor client’s situation
Trust whom you can really trust
CE Profile
L e arn in g
T ru st re la tio n s
R e fl e c tio n I n te g ra tio n
C o m p e te n c e
H um an C apital P rofi le for C E
L e arn in g
T ru st re la tio n s
R e fl e c tio n I n te g ra tio n
C o m p e te n c e
С ore E m ployee P rofi le
CE profile: identification
Do abilities mentioned before have to be developed equally?
CE Profile – the set of abilities that are in the certain proportion
Who defines CE Profile and how?
Who – individuals from three different
fields How – different factors and context
Three fields of CE identification
Social
Professional
Organizational
CE
HRM model based on CE focus
CE makes considerable contribution in business development CE focus is valuable for HRM
CE abilities could be managed Different CE Profiles could be
developed based on the abilities There is no universal CE Profile People from three fields of CEs’
identification should be involved in CE Profile development
Risks of implementation of HRM model based on CE
Mistakes in CE’s identification process ‘wrong’ people loosing investments
Self identification as ‘star’ unfounded demands concerned salary and working conditions
CE are difficult-to-manage employees Loosing valuable information because
of CE leaving the company
Conclusions
Key findings
Recommendations for HRM development
•To develop mixed HRM system, based on results of empirical research
•To pay more attention to HRM practices such as new comers adaptation, personnel training, development discussion, rewarding
•To introduce core employee concept in HRM practice
•To regard that core employees are the centre of corporate value translation and new business ideas accumulation
Recommendations for Network development
Social skills are crucial for network development
Employees involved in network relations should be social competent
Social competence includes integration ability and ability in building and maintaining trust
Organisations involved in network should pay enough attention to these abilities development
Thank you for your attention!
Questions, comments…
Vera Minina, Elena Dmitrienko and Anastasia Krupskaya
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