Table of contents

Contents
Case summary: ....................................................................................................................................... 5 Company Profile ..................................................................................................................................... 7 Question No.1......................................................................................................................................... 8 Question-2 .............................................................................................................................................. 9 Question 3: ........................................................................................................................................... 10 Question no: 4 ...................................................................................................................................... 12 Question no: 5 ...................................................................................................................................... 13 Recommendations ................................................................................................................................ 14 REFERENCES .......................................................................................................................................... 15

Case study: Seiko Instruments The Seiko Group, established in 1937, consists of three distinct companies Seiko Corporation, Seiko Instruments Inc (SII) and Seiko Epson Corporation. They operate independently but function as a cohesive unit in the design, production and marketing of the time pieces that established the Seiko name. The company has around 70 subsidiaries worldwide with over 10,000 employees. Through its global network, Seiko Corporation markets the timepieces produced by SII and Seiko Epson. In 1988 Seiko completed the worlds first automated assembling system for multipurpose, small-lot production of watch movements. The Scottish plant was founded in March 1990 and has 110 employees. The location was chosen because it is close to European markets, has a stable skilled workforce, and other Japanese companies had a successful experience in Scotland. The subsidiary manufactures thermal printers and watch components. The organizational structure is constrained by British standards in some respects, in common with other Japanese companies operating in the UK. HR strategy The General Manager (GM), who is Scottish, has worked on the site for over 10 years and in all those years there have been only two visits by a personnel representative from Japan. The main objectives of the visits were for the HQ to survey the Japanese employees working overseas. The corporations stance is basically that in the overseas countries the personnel function should operate entirely autonomously. Its fairly bizarre to hav e identical policies and procedures in sites in as diverse locations as Japan, China, Thailand, Malaysia and the UK. Generally the company tries to treat its employees fairly well and its left up to local personnel to follow local standards. If it wasnt for Mr X [a Japanese senior manager] you wouldnt know you worked for a Japanese company. There isnt really anything Japanese about it at all. I say to people: you will probably find this company is not like your typical Japanese company. Most personnel policies of the Scottish site are made locally; the site is given targets and a free range to achieve them the Scottish way. The companys policy is to respect local waysthey try to adapt to local management practices 100 percent within the Scottish location. People management is designed locally, mainly by the General Manager. They have constructed a policy

manual and handbook containing mostly local practices. They are first written in draft, involving all the managers at this stage, agreed upon, and then formalized. Then they are placed on notice boards and employees are notified. Revisions are initiated as required by legislation, for example changes in working practices. The GM has spent some time working in the US (California) with Seiko and has introduced some Californian practices into the site. Recruitment All practices are driven from the Scottish site. In Japan they select school leavers for operators. Initially, the Japanese Manufacturing Manager had a preference for school leavers and teenagers and wanted the Scottish site to recruit them. He was involved in the recruitment of the first 90 employees who fulfilled this age criterion. When these 90 young recruits were assessed on, for example, how they behaved against their elders on site, they were considered unreliable and unaccustomed to this kind of work. Absenteeism was a problem at this stage. He believed that they had no work ethic at this age. The Personnel Manager at the time was the only personnel manager of a Japanese company in Livingston to say I will not employ school leavers and teenagers. He thinks the policy of recruiting school leavers works in Japan because youngsters are more obedient and better educated. Overseas training Watch manufacturing has been in operation for over four years. A lot of initial training was done in Seikos subsidiaries in Singapore and the far east; a lot of overseas trainers came over, and worked with the operators for about 3 months. The on-site practices have been refined over the years. Production supervisors go over to Japan every year to learn new processes. If the Scottish site had a disastrous manufacturing problem a Japanese would come over. Recently they have had an engineering design problem in the printers section and quality people came over from Japan. They stayed for three days to sort things out. What has been brought from overseas is mainly knowledge. When the watch manufacturing was set up there were no processes in existence. Twenty four employees were sent over to Japan to learn how to operate the equipment. They came back and eventually increased the number of people in the area and developed their own systems. The senior manufacturing engineer goes to Japan for training and looking at business opportunities, and to Singapore for transfer of production lines and further training . Generally, no one goes over to Japan to train. Although things are changingthey are becoming more

interested in what Scotland is doing with regard to technical processes. Scotland has taken Japanese ideas and is now running some of their machines more efficiently. Training differences between Japan and Scotland In Scotland the company encourages people to develop at operator level, both in-house and in colleges and other educational establishments, and finances their further education. In Japan, because employees stay in the company a long time, they have large, established internal training and recognized formal qualifications. They have extensive support resources, for example engineering and technical support. Rank and file employees do not go to college or university, because they are not available to everyone at the companys expense, but sometimes managers do attend short courses in these establishments. However, the company will pay up to 50 percent of the cost of out-sourced English classes if employees wish to learn the language. Team working The subsidiary management has introduced the Japanese way of team working. The local managers know the Japanese practices such as total quality management and quality circles, and use them in a modified way. The management does not push Japanese quality initiatives; they are happy for the employees to apply the tools they prefer. Also, in Japan they run quality circles after working hours on a voluntary non-paid basis but the Scottish managers would not be able to implement them here because the operators would want to be paid overtime. In addition, the managers believe that such practices as twice daily exercises in the office, customary in the Japanese sites, would not work here because the company is not a school or army. Consensual decision making The GMs observation from working in Seiko plants in Japan is that Japanese style consensual decision making offers unsatisfactory compromises. He says decisions take more time to be made. Also, if junior Japanese managers are involved they will not speak their mind because they feel inhibited, for cultural and traditional reasons. In the Scottish site employees are more frank. I would imagine that having worked here for a number of years our boss probably prefers what he may have initially interpreted as a fairly antagonistic discourseits a bit more stimulating and actually more things are aired and moved forward.

Pay and benefits These are all decided locally. There is considerable competition for skilled local staff. Seiko in Livingston competes against the likes of Motorola and Sky for employees. Consequently their pay is competitive, with rewards for hard work. They also offer paternity leave, pensions, life assurance and sick pay. Industrial relations The Scottish site is not unionized, but the Japanese sites have company-based unions. Moreover, in Scotland there are grievance procedures in place to enable the employees to file claims against their boss, but such a system does not exist in the Japanese sites. Senior managers believe that the history of local trade unions still make the employees suspicious of management, even today. The management has to work harder to gain trust and get people to buy in and get them to come up with ideas and work on problems themselves. In Scotland they make employees redundant if they have to. In Japan Seiko does not do this. The company offers jobs for life, and if need be transfers employees to holding divisions rather than make them redundant. CASE STUDY QUESTIONS 1. Why has the parent company adopted an HRM strategy which would allow overseas subsidiaries to perform their personnel function autonomously? 2. In what respect is the Scottish subsidiarys recruitment policy different from its Japanese parent company, and why? 3. Why has the local management team decided not to implement some of the Japanese Parent Companys practice in Scotland? 4. Why consensual decision making is not applicable in Scottish subsidiary? 5. What types of training facility Seiko group provides for its employees? What kinds of training difference are exists between Scottish subsidiaries and Japanese headquarter?

Case summary:
The Seiko Group is a Japanese company which was established in 1937, consists of three distinct companiesSeiko Corporation, Seiko Instruments Inc (SII) and Seiko Epson Corporation. Through its global network, Seiko Corporation markets the timepieces produced by SII and Seiko Epson. One interesting thing is that it has 70 subsidiaries which conduct business independently but their design, production and marketing is conducted uniformly. In March, 1990 Seiko established another new plant in Scotland for gaining some location advantage. Availability of skilled labor and better work experience in other Japanese firms motivated Seiko to establish the new plant in Scotland. In case of recruitment Seiko follow polycentric approach. Thats why the general manager in the Scottish plant is Scottish. Generally the company tries to treat its employees fairly well and its left up to local personnel to follow local standards. People management is designed locally, mainly by the General Manager. They have constructed a policy manual and handbook containing mostly local practices. In case of recruitment, all practices are driven from the Scottish site. Initially, the Japanese Manufacturing Manager had a preference for school leavers and teenagers and wanted the Scottish site to recruit them. But due to the absenteeism, low work morale and other problem the manager decided not to select the teenage people and select the employee as per local policy. In case of training, a lot of initial training was done in Seikos subsidiaries in Singapore and the Far East; a lot of overseas trainers came over, and worked with the operators for about 3 months. Seiko provides training to production supervisors to learn new processes. Also if any subsidiaries face any problem regarding manufacturing the Japanese experts would come over to solve the problems. In Scotland the company encourages people to develop at operator level, both in-house and in colleges and other educational establishments, and finances their further education. In Japan, because employees stay in the company a long time, they have large, established internal training and recognized formal qualifications. The GMs observation from working in Seiko plants in Japan is that Japanese style consensual decision making offers unsatisfactory compromises. He says decisions take more time to be madeIn the Scottish site employees are more frank. In case of pay and benefits, all of the pay and benefit policy is made locally. Seiko s pay is pay is competitive, with rewards for hard work. They also offer paternity leave, pensions, life assurance and sick pay. The Scottish site is not unionized, but the Japanese sites have company-based unions. In Scotland there are grievance procedures in place to enable the employees to file claims against their boss, but such a system does not exist in the Japanese sites.

Company Profile
Company logo

Type Industry Founded Headquarters Products

Subsidiary Electronics Tokyo, Japan (1937) Chiba, Chiba, Japan Micromechatronics devices, Network components, Information-related equipment and services, Printers, Scientific instruments, etc. 190,800 million (nonconsolidated); 274,400 million (consolidated) (Fiscal year ended March 31, 2005) 2,796 (nonconsolidated); 14,841 (consolidated) as of February 28, 2006 Seiko Holdings Corporation(100%) Morioka Seiko Instruments Inc., SII Nanotechnology Inc., SII Network Systems Inc., SII Mobile Communications Inc., SII Data Service Corp., Seiko Instruments Korea Inc., Dalian Seiko Instruments Inc., Seiko Instruments (Shanghai) Inc., Guangzhou Seiko Instruments Ltd., Seiko Instruments Taiwan Inc., Seiko Instruments (Thailand) Ltd., Seiko Instruments U.S.A., Inc., etc.

Revenue

Employees

Parent Subsidiaries

Question No.1
Why has the parent company adopted and HRM strategy which would allow overseas subsidiaries to perform their personnel function autonomously? As Seiko Instruments parent country is Japan, it has plant in Scotland. All practices are driven from the Scottish site. General Manager of this plant is an Scottish. So It focuses on Polycentric approach of International Human Resource Management .That means it treats Scottish plant a distinct national entity with some decision making autonomy. Here from the case we have got that personnel function operates entirely autonomously which proves that it follows polycentric approach of HRM. Reasons are as followed: 1. Employing Host Country Nationals eliminates language barriers. 2. It helps to avoid the adjustment problem of expatriate mangers and their families. 3. It removes the need for expensive cultural awareness training program. 4. Employment of host country nationals is inexpensive. 5. It avoids the turnover of key managers as senior management is employed from host country like Scotland. 6. Scotland is close to European markets and it has stable skilled workforces. 7. The organizational structure is constrained by British standards. 8. Only polycentric approach allows host country dominance in managing the operation in that country. 9. General Manager is employed from host country. These are the reasons 0f parent company like Seiko Instrument (Japan) adopted Polycentric HRM approach which allows overseas subsidiaries to perform their personnel function autonomously.

Question-2
In what respect is the Scottish Subsidiarys recruitment policy different from its Japanese parent company, and why? Due to some cultural, social and policy restriction, the Scottish Subsidiarys recruitment policy different from its Japanese parent company. The differences between the Scottish and Japanese recruitment policy are discussed in the table below: Scottish Subsidiarys Recruitment is done from of local subsidiaries. It believes that teenagers and school leavers are not obedient and serious about job. Recruitment practices are driven from Scottish site. Scottish Subsidiarys emphasis on Polycentric Staffing Approach. 3. 4. S.N. 1. 2. Japanese parent company Recruitment is done from Head Quarter It believes that teenagers and school leavers are obedient and serious. Head quarter intervenes while the

recruitment process is being done. Japanese Parent company focuses on Ethnocentric Staffing Approach.

Why it differs from parent company is given below: The main reason is that Japanese parent company follows Ethnocentric Approach of Staffing on the other hand Scottish Subsidiarys focuses on polycentric Staffing Approach. In Japan they select school leavers for operators. But in Scotland it is not suitable because the youngsters of Scotland are not more obedient and better educated. Also they have absenteeism, low work morale and other problem.

Question 3:
Why has the local management team decided not to implement some of the Japanese parent companys practices in Scotland? The Seiko Group is Japanese group which operate independently but function as a cohesive unit over 70 subsidiaries. In 1988 Seiko completed the worlds first automated assembling system for multipurpose, small-lot production of watch movements. The Scottish plant was founded in March 1990 and has 110 employees. The location was chosen because it is close to European markets, has a stable skilled workforce, and other Japanese companies had a successful experience in Scotland. The subsidiary manufactures thermal printers and watch components. The organizational structure is constrained by British standards in some respects, in common with other Japanese companies operating in the UK. Most personnel policies of the Scottish site are made locally; the site is given targets and a free range to achieve them the Scottish way. The companys policy is to respect local ways-they try to adapt local management practices 100 percent within the Scottish location. People management is designed locally, mainly by the General Manager. The local management team has decided not to implement some of the Japanese parent companys practices in Scotla nd because some practices did not match with the practice of Scottish. Some of the sectors are stated below where Japanese parent companys practices not implemented in Scotland. Recruitment In Japan they select school leavers for operators. But in Scotland they do not employ school leavers and teenagers because absenteeism was a problem at this stage and they were considered unreliable and unaccustomed to this kind of work. Training In case of training difference exist between Japanese and Scotland. In Japan, employees are loyal to the company because employees stay in the company a long time, they have large, established internal training and recognized formal qualifications. In Scotland the company

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encourages people to develop at operator level, both in-house and in colleges and other educational establishments, and finances their further education.

Team working and decision making Japanese practices total quality management and quality circles and use them in a modified way and run quality circles after working hours on a voluntary non-paid basis but the Scottish managers would not be able to implement them here because the operators would want to be paid overtime. Thats why its not practices in Scotland. Japanese consensual decision making offers unsatisfactory compromises and take more time to be made. In the Scottish site employees are more frank whether Japanese feel inhibited, for cultural and traditional reasons. Industrial relations The Scottish site is not unionized, but the Japanese sites have company based unions. Moreover, in Scotland there are grievance procedures in place to enable the employees to file claims against their boss, but such a system does not exist in the Japanese sites. So it can be said that local management team has decided not to implement Japanese parent companies practices in Scotland because some practices are perfect only in parent company, Japan. And the companys policy is to respect local ways so they try to adapt local management practices.

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Question no: 4
Why consensual decision making is not applicable in Scottish subsidiary?

Consensus decision-making is a group decision making process that seeks the consent of all participants. Consensus may be defined professionally as an acceptable resolution, one that can be supported, even if not the "favorites" of each individual. Consensus decision-making is thus concerned with the process of deliberating and finalizing a decision and the social and political effects of using this process .Consensual decision-making requires that all participants agree on an option before it is adopted. Consensual decision-making can be contrasted with non participatory forms of decision-making (i.e., by representatives or experts) and with majority voting. In a typical consensus process, an issue is introduced and discussed and a proposal is formulated; then the facilitator or a participant calls for consensus. Participants may signal their agreement with the proposal may stand aside if they do not agree but do not want to block the proposal's adoption, or may voice objections to the proposal. Participants discuss dissenters' concerns and may amend the proposal before calling for consensus once again. The process may continue until participants reach consensus or decide to table the issue. In some processes, a single veto may prevent the adoption of a proposal; in others, near but not complete unanimity is required. In the Scottish subsidiary the practice of consensual decision making is not applicable because of cultural and social difference as well as time limitation of decision making. In this case we can see that the general manager of Scottish plant argued against the consensual decision making and said that Japanese style consensual decision making offers unsatisfactory compromises. He says decisions take more time to be made. It is true that consensual decision making is a collaborative process of decision making where every persons opinion is considered seriously. Thats why the more time is required. Culturally Japanese decision making process is slow where the Scottish takes a quick decision than Japanese. This is one considerable reason for inadaptability of Japanese decision making process. Another reason is that Scottish is more frank than Japanese thats why they express their opinion frankly in their boss. On the other hand Japanese culture doesnt allow the younger to speak frankly with boss. Thats why they sometimes dont express their opinion.

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Question no: 5
What types of training facility Seiko group provides for its employees? What kinds of training difference are exists between Scottish subsidiaries and Japanese headquarter? Training is the organized procedure by which people learn and increase the knowledge and skills for doing a particular job. Seiko group provides the different kind of on-the-job and off-the job training to their employees for conducting the work effectively and efficiently. A lot of initial training was done in Seikos subsidiaries in Singapore and the Far East; a lot of overseas trainers came over, and worked with the operators for about 3 months. Production supervisors go over to Japan every year to learn new processes. If any site has face a disastrous manufacturing problem Japanese would come over. Recently the Scottish side had an engineering design problem in the printers section and quality people came over from Japan. They stayed for three days to sort things out. Employees from different site are sent over to Japan to learn how to operate the equipment. They came back and eventually increased the number of people in the area and developed their own systems. The senior manufacturing engineer goes to Japan for training and looking at business opportunities, and to Singapore for transfer of production lines and further training. Training differences between Japan and Scotland In Japan, employees are loyal to the company because employees stay in the company a long time, they have large, established internal training and recognized formal qualifications. In Scotland the company encourages people to develop at operator level, both in-house and in colleges and other educational establishments, and finances their further education. In Japan, the company will pay up to 50 percent of the cost of out-sourced English classes if employees wish to learn the language. But in Scotland they dont follow such kind of practice.

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Recommendations
After analyzing the case and case questions we suggest the following guideline for improving the overall performance of Seiko Instruments: For improving the subsidiaries performance the company should revised the current program and introduce more efficient training program. In case of in country training company could include the buddy system, family welfare program, social support network. For effective performance in overseas company can institute a team which looks into the establishment of company in overseas. Company should give more emphasis on cultural and language differences between countries to country when they plan to establish new plant in overseas. Company should maintain good control mechanism regarding subsidiaries performance. Currently company follow polycentric approach but in some country this approach is not applicable. Thats why companys approach should vary according to the nature of the countrys culture and other factors.

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REFERENCES
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