Evaluating an International HRM Strategy Assignment

Evaluating an International HRM Strategy - Assignment Example This paper assesses not only the human resource management of ZARA per se but its HRM in relation to expatriate management if it were to enter into joint venture agreement in New Zealand (the host country). To this end, the paper begins with an analysis of the economic environment in New Zealand and its potential relationship with ZARA’s HRM policies. Keeping in view the ageing population pyramid and low female participation rates in New Zealand, hiring expatriates would be necessary as the joint venture team would be a mix of expatriates and host country employees. During this process, cultural training and supporting policies would be necessary to reduce failure rates of expatriate management. Finally, recommendations are offered towards the end regarding the areas that ZARA would need to focus on with respect to strategic human resource management in New Zealand. ZARA, an iconic global fashion brand, was founded by a businessman Amancio Orgega in 1975 owing to his aim of ex panding his factory’s operations by opening a new outlet in La Coruà ±a (don Quijote, 2013). The company has enjoyed great success since its inception with continuous growth in the fashion line being the epitome of ZARA’s overall business strategy. By 1986, the company enjoyed extensive distribution in Spain with outlets in all major cities, whereas two years later, the company decided to open its doors to the global market including its first destination- Portugal (don Quijote, 2013). ... 2. HRM and the Environment ZARA is considering entering into a joint venture in New Zealand which, currently, represents an untapped market for the company. It is, therefore, important to analyze the economic environment of New Zealand at present. The country’s economy now follows the free market mechanism with little government intervention. Its economy is highly export-driven and very competitive. Keeping this in mind, ZARA’s entry into the region could expose it to intense competition from other foreign firms. With an expected growth rate of 2.5% and 3.4%, the country demonstrates high resilience to the global economic downturn that negatively affected the economies of most of the developed world (IHS Global Insight, 2013). On the flipside, New Zealand’s currency appears undervalued compared to the dollar (IHS Global Insight, 2013). This combined with the potential for the housing market in New Zealand to heat up puts it at the risk of facing recessionary effe ct in near future. Furthermore, the low levels of inflation along with high unemployment levels (50%) (IHS Global Insight, 2013) could mean that the cost of hiring locals for ZARA would be low. Consumer spending is also expected to grow modestly which does not present an overly optimistic picture for ZARA. This is because of the high housing debts compared to slow growth in income. Additionally, government’s intention of reverting to modest surplus in 2015 shall result in reduced spending (IHS Global Insight, 2013). Nevertheless, there appears to be growth in consumer spending with the same increasing by approximately 1.2% by 2015 (IHS Global Insight, 2013). On the whole, the consumption picture appears to be mixed and one may expect fair amount of consumer