Seiko Instruments

(HUMAN RESOURCE MANAGEMENT CASE STUDY PRESENTATION)

SUBMITTED BY : MMS-A 2018-20

GOVIND RATHI – 42
KARTIK SAMANT – 43
KINNARI SANGODKAR – 44
SONAM SARDA – 45
DHIRAJ SHAH – 46
SHAHJAD ALAM SHAIKH – 48
ADITI SHARMA – 49
ANURAG SHARMA – 50
ASHMITA SHARMA - 51
INTRODUCTION
 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.
 Seiko Instruments Inc.(SII) was founded in 1937(82 years ago) Tokyo, Japan. The Chairman of company is Katsumi
Yamamura And the President is Masafumi Shimbo.
 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.
 Through a network of subsidiaries, Seiko produces and markets its product on a global scale. Seiko’s global operations now
span across broad-ranging segments, from watches to high-added-valued IC chips and system solutions based on forefront
techniques in electronics.
 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.
 Generally the company tries to treat its employees fairly well and it‘s left up to local personnel to follow local
standards. It‘s fairly bizarre to have identical policies and procedures in sites in as diverse locations as Japan, China,
Thailand, Malaysia and the UK.
 The company‘s policy is to respect local ways—they 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.
 The GM has spent some time working in the US (California) with Seiko and has introduced some Californian
practices into the site.
RECRUITMENT

 All recruitment practices are driven from the Scottish site.

 In Japan the select school leavers and teenagers for operators.
 The company tried to follow the same practise in the Scotland plant but the
results were not great, due to the absenteeism and low work morale.
 The manager decided not to select the teenage people and select the employee
as per local policy.
 The practise works better in Japan as the youngsters there are more obedient
and better educated.
OVERSEAS TRAINING
 Overseas training has mainly attracted knowledge
 In the initial stage of the company, 24 employees were sent over to Japan to learn
how to operate the equipment
 This eventually increased the number of people in their area and they developed
their own systems
 Training was initially done in Seiko’s subsidiary which was situated in Singapore. This
resulted into refined onsite practices
 Senior engineer visits different countries, like
1. Japan for training and for business opportunities
2. Singapore for transfer of production line and further training
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.
 In Japan the rank and file employees do not go to college as they are not available to everyone at company
expense but the managers attend short courses.
 The company offers to pay fifty percent of the cost of out-sourced English classes in Japan.
TEAM WORK
 Seiko has introduced the Japanese culture of team working
 Since the managers are trained under Japanese people
 They know the Japanese practices such as TQM and quality circles, and use these
practices in modified way
 Management allows employees to use the tools as per their preferences
 For example:
1. In Japan, quality circles are run after working hours on a voluntary non-paid basis
2. Whereas, Scottish managers cannot implement this practice here because the
operators would want to be paid overtime
CONSENSUAL DECISION MAKING
 Consensual Decision Making is a cooperative process for making
decisions in which everyone consents to the decisions of the
group. It is not necessarily their first preference but decisions
are taken on the basis of true agreement.

 The GM‘s 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.

 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.
 Consensual decision making preserves the interests and integrity of all the particpants. The Scottish GM believes
that it makes the decision making process more stimulating and more things are aired and moved forward.
PAY AND BENEFITS

 The pays and benefits 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. Senior managers believe that
the history of local trade unions still make the employees suspicious of management.
 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.
 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.
Q1. WHY HAS THE PARENT COMPANY ADOPTED AN HRM STRATEGY WHICH WOULD ALLOW
OVERSEAS SUBSIDIARIES TO PERFORM THEIR PERSONNEL FUNCTION AUTONOMOUSLY?
 The plant in Scotland focuses on
Polycentric approach of
International Human Resource
Management.
 All practices are driven from the
Scottish site and even the
General Manager of this plant
is an Scottish. 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 and reasons are as followed:
– Employing host country nationals eliminates language barriers.
– It helps to avoid the adjustment problem of expatriate mangers
and their families.
– It removes the need for expensive cultural awareness training
program.
– Employment of host country nationals is inexpensive.
– It avoids the turnover of key managers as senior management is
employed from host country like Scotland.
– Scotland is close to European markets and it has stable skilled
workforces.
– The organizational structure is constrained by British standards.
– Only polycentric approach allows host country dominance in
managing the operation in that country.
Q2. IN WHAT RESPECT IS THE SCOTTISH SUBSIDIARY’S RECRUITMENT POLICY DIFFERENT FROM
ITS JAPANESE PARENT COMPANY, AND WHY?

Scottish Subsidiary Japanese Parent Company

Recruitment is done from local subsidiaries. Recruitment is done from the HQ.
It is believed that teenagers and school leavers are not It is believed that teenagers and school leavers are
obedient and dedicated towards the job. obedient and dedicated.

Polycentric Approach Ethnocentric Staffing Approach

The Japanese parent company follows Ethnocentric Approach and Scottish Subsidiary follows Polycentric Approach.
In Japan school leavers and teenagers are selected as operators they are more obedient and educated than
youngsters in Scotland. Thus the same practise is not followed in Scotland. Also there is absenteeism and low work
morale in Scotland among youngsters.
 Q3. WHY HAS THE LOCAL MANAGEMENT TEAM DECIDED NOT TO IMPLEMENT SOME OF THE
JAPANESE PARENT COMPANY‘S PRACTICE IN SCOTLAND?

 The local management team has decided not to implement some of the Japanese parent company‘s practices in Scotland
because some practices did not match with the practice of Scottish. And the company‘s policy is to respect local ways so
they try to adapt local management practices
 Some of the sectors are stated below:
1. Recruitment
o Japan:They select school leavers for operators
o Scotland: They do not employ school leavers and teenagers because absenteeism was a problem at this stage and they were considered
unreliable and unaccustomed
2. Training
o Japan: Large and established internal training and recognized formal qualifications
o Scotland: Encourages people to develop at operator level, both in-house and in colleges and other educational establishments, and
finances their further education
3. Industrial Relations
o Japan: Company based unions and no grievances procedures are followed
o Scotland: It is not unionized and there are grievance procedures in place to enable the employees to file claims against their boss
Q4. IN WHAT WAY HAVE THE LOCAL POLITICAL AND ECONOMIC CONDITIONS ENABLED THE
SUBSIDIARY TO ACT LOCALLY AS THEY SEE FIT AND THEREBY GO AGAINST THE
HEADQUARTERS’ CURRENT HR POLICIES?

The company‘s policy is to respect local ways and they try to adapt to local management practices within the
Scottish location.
The following are the political and economic conditions which have enabled the subsidiary to act locally:
 Japanese Manufacturing Manager had a preference for school leavers and teenagers as the policy of recruiting school leavers works in
Japan because youngsters are more obedient and better educated but due to the issues like the young employees being unreliable,
unaccustomed and Absenteeism this policy didn’t wired in Scottish location.
 In Japan, because employees stay in the company a long time, they have large, established internal training and recognized formal
qualifications while in Scotland they prefer formal education.
 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.
 Pay and benefits are all decided locally as there is considerable competition for skilled local staff. Seiko in Livingston competes against
the likes of Motorola and Sky for employees. Hence their 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. 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.
 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.