Daimler Company’s Human Resource Management

Introduction

Daimler is a German car company specialized in cars and trucks. The current CEO of the Company is Dieter Zetsche who develops an effective strategic and leadership position of Daimler on the global scale. The application of HRM by Daimler is often discussed from review of human resources investment options to technique. Rather than focusing on how to build desired levels of trust through employment security arrangements, practitioners elaborate on the steps involved in a job analysis program (Daimler Home Page 2008). In short, a tactical and operational view too often replaces a strategic view. The importance of HRM at Daimler is explained by the fact that human resources can shape the culture of the organization by its wide-ranging attention to personnel matters. By drawing management or employee attention to issues or activities, human resource management sends signals and causes the employees of the organization to think, decide, and act on matters of potential importance. The company management states that: ”As a globally oriented company we are particularly interested in aligning the Daimler Corporate Governance system internationally and making it transparent” (Daimler Home Page 2008). The case of Daimler shows that effective application of HR management and positive organizational culture help organizations to improve performance and develop positive relationships between employees and between management and subordinates.

Theories Applied

Hofstede’s Theory

Geert Hofstede singles out five main factors which identify and characterize culture. The main factors which will be taken into account are Power distance, Individualism/Collectivism, Masculinity/ Feminity, Uncertainty Avoidance and Confucianism. There are no recognized social classes in Germany and other European countries (Hofstede, 1984). The case of Daimler management allows to say that German workers fight harder than Americans to minimize all kinds of inequalities and there is even more equality among sexes in the former case. Uncertainty avoidance relates to people’s need for structure. For Daimler workers, the higher such avoidance, the more there is a need in a culture for a structured life. In an uncertainty-avoiding organization there are many rituals, for example, certain memos and reports, some parts of accounting, much of planning, a considerable part of control systems and occasional reliance on experts (Baron and Kreps, 1999). Working on the global scale, Daimler management takes into account that some cultures are definitely focused on the individual and on individual free choice, as the Americans; other cultures consist of people who do not even identify themselves as individuals but rather as members of a group, as the Germans. Americans value the individual way very highly; the self-made individual is a very American phenomenon. “As a globally operating company, we value the diversity of our employees. Above all, demographic, juristic and entrepreneurial facts constitute the basis of our conviction that diversity management provides the opportunity to derive talents from a larger pool and to win over new consumer groups as customers” (Daimler Home Page 2008). German workers find it possible, even mandatory, to improve on the present; they are very action-oriented, accept changes (even embrace what is new and up to date) and think they can control them. They also look at growth in business as a virtue in itself. German workers at Daimler are also change-oriented, even if not as much as Americans. Germans are willing to learn, believe in progress, like to experiment but they are a bit slow in details, due to a disposition to carefulness, solidarity and compromise. They want to know what is happening before they set a new course and their full dedication to consensus makes them even slower than the Germans to act. At Daimler, it is assumed that there is a social web, which includes shared meanings, in every organization, and changing meanings is a communication process (Hofstede, 1984). The participants of this process seek to convey their message in a variety of mutually reinforcing ways. Some are continually more sensitive to the constructions that are placed on words and actions than others. They are also more convincing in their language play “The concept of diversity at Daimler is comprehensive in nature and takes into account both regional and business unit-related priorities. Our aim is to be one of the most highly respected automotive companies with regard to diversity and inclusion management by 2010”. (Daimler Home Page 2008). At Daimler, the actual content of the culture and the degree to which it relates to the environment (present or future) seem like the critical variables here, not strength, pervasiveness or direction. It could be possible to hypothesize, for instance, that young organizations strive for culture strength and pervasiveness as a way of creating an identity for themselves (Hofstede, 1984).

Schwartz’s Theory

Schwartz explains culture as contrasting points between continuance commitment and affective commitment. It is supposed that in Daimler along with the increase in the sharing of information will be a new attitude of seriousness adopted toward messages that were previously viewed as peripheral. At Daimler, newsletters become more substantial carriers of important information. Thus, business will most probably increase not only its consumption of information but also the attention it is asked to pay to it (Baron and Kreps, 1999). For Daimler, critical incidents are events in organizational history that are perceived by members as stressful and experienced anxiously. Organizations and their members typically do not reflect on themselves or their processes without reason (Schwartz 1990). “The Charta of Diversity is an elementary commitment to economical benefit of diversity as well as tolerance, fairness and appreciation in companies and public institutions” (Daimler Home Page 2008). At Daimler, changes in the organizational status quo caused by management cutbacks, retrenchment, leadership transitions, budgetary revisions, audits, expansions in size and workload, and the like, trigger anxieties and feelings of panic. Consequently, organizational culture, and all that it entails, is both endangered and exposed (Schwartz 1990).

Trompenaars/ Hampden-Toner

Trompenaars/ and Hampden-Toner explain a culture as contrasting points of universalisti and/ particularistic cultures. German culture (dominated in Daimler) is considered as universalisti one influenced by European identity and single currency zone. Organizational leaders of Daimler are especially affected by change. They have a critical role in effectively managing institutional boundaries or the lack of such boundaries–the so-called interface between the organization and its task environment. “Equal; opportunities, openness, fairness and mutual respect are among our core principles. Based on the principles of social responsibility and the Integrity Code, the senior management joined the Group Works Council and the Senior Managers’ Committee in signing a company agreement regarding fair behavior at the workplace” (Daimler Home age 2008). When Daimler’s workers and managers are unaware of the character of leader-follower relations, their response to change becomes automatic and unconscious (Hampden-Toner and Trompenaars 2005). They lack the opportunity for critical thinking, reflection, and readjustment to the demands of the situation. Unless Daimler’s managers are prepared to make structural, policy, and, particularly, personnel changes, pointing out the unconscious dimensions of relationships within the organization is useless. members are frequently willing to change the character of their professional relationships after they have identified the dysfunctional nature of those relationships, usually with the help of a consultant (Daimler Home Page 2008). They are particularly prone to do so when they are in emotional pain and distress–but not without some resistance to insight that can be found in the exploration of the psychodynaniics of leader-follower relations. Personality may be an insurmountable barrier to change. In spite of this, Daimler is continually surprised at the capacity for collective change in the manners of interacting and communicating. In this regard, Daimler revisits the varied relational patterns between leaders and followers that affect organizational responses to change. Controlling today (for the future) means to control time (Laurel and Launenfeld 2003). Time is seen as just another part of the environment to deal with. Time is perceived as passing in a straight line, compartmentalized into discrete segments in a sequence of disparate events. Beyond artifacts, degrees of formality, socialization, rituals, myths, and governing values lies a deeper level of organizational culture–the personality of leaders. The degree to which a leader’s personality influences organizational culture is to some extent based upon the organizational structure and procedures. Günther Fleig is a Human Resources & Labor Relations Director who has a great impact on culture and international HR management in Daimler (Daimler Home Page 2008). Consequently, these authoritarian structures require expansive personalities at the top and self-effacing ones at the bottom. If hierarchic structure is considered a given, then we must consider how individual personality fits and then affects organizational positions (Hampden-Toner and Trompenaars 2005).

Cartwright/ Cooper: model of the cultural compatibility

This model will help to explain interaction between different cultures and values, and their impact on Daimler. Beyond the impact of rational organizational designs, norms, and strategies on organizational behavior, the unconscious expectations and desires of organizational members, individually and collectively, affect organizational responses to stress and change. Applying a framework workers’ predominant unconscious relational needs encompass the following three sets of desires: (1) recognition and approval, (2) membership and affiliation, and (3) sympathy, compassion, and retribution. As you may note with category (3), these unconscious requirements are not always compatible. Moreover, regardless of whether these desires are realized or frustrated at work, they influence, significantly, an individual’s ability to cope with change and thus shape performance and morale (Cartwright and Cooper 1993). Despite similarities in structure, goals, task environment, professional training of members, social class, and culture, organizational identities differ. Often overlooked, organizational distinctions are determined primarily by the character of relational patterns of subordinates and their effect on organizational work bonds (Daimler Home Page 2008). Change dynamics produce subcultures within organizations that govern vertical and horizontal interactions between and among individuals and groups. In Daimler the pattern of leadership-followership may be consistent throughout, while in others the style of authority relations differs among the layers of hierarchy and between departments and among permanent subgroups. Often, this deviation is dependent upon the degree of autonomy and independence among the people and their units. Yet, in the last analysis, behavior in organizations is determined by shared emotions, transference dynamics between leaders and their staff (Cartwright and Cooper 1993). At Daimler, real commitment occurs when individuals see, through the manager’s actual behavior, that substantive efforts are being made to help them attain their goals and objectives. The manager’s commitment to help attain the goals and objectives is the most significant step in the entire process. This is the manager’s job; this is where real empowerment comes in. Managers should give individuals the tools and the information that they need and get rid of the things that trip them up, hamper them, and slow them down. The best managers bring to life in individuals the capacity to share the leadership task. Inviting workers into the rule-making process, is the ultimate in empowerment, which involves giving power away to strengthen others and giving people the power to accomplish the tasks to be done. Daimler’s organizational culture contains the essential elements of organization life. It includes historically constituted meanings to organizational norms, ideologies, values, languages, myths, and even symbols. Culture involves a set of tangible or intangible standards that enable individuals to act in ways that are acceptable to their organizational colleagues. It is not necessarily found in peoples’ heads, but exists in shared meanings that take shape in organizational myths, ideologies, norms, and values.

Perlmutter: EPG system

Perlmutter model involves three main concepts: ethnocentric (home country orientation), polycentric (host country orientation), geocentric (world orientation). Daimler follows ethnocentric and geocentric orientation in order to keep unique national image but appeal to world customers (Perlmutter, 2008). This model allows to say that business like Daimler will probably only increase its consumption of information. Those who have studied changes in the work force over the next decade argue that a cultural shift will continue to take place, one that will result in a greater sharing of information in the corporate setting: There are several different kinds of value orientations that lie behind different kinds of HRM policy choices. Values in regard to human resources management are defined in terms of two fundamental questions: The company claims that: “We also aim to expand the pool of top-quality talent within the company by taking the appropriate measures and to ensure that these employees remain in our company over the long term. Another major challenge will be to increase the proportion of women, especially at the management level and in Germany.” (Daimler Home Page 2008). From these foundations, several different value positions can be erected, including: strict equality, where every member of the organization is entitled to fully share in all rewards; effort and performance, which allocates rewards to employees in terms of their contribution to the performance of the organization; and birthright, by which rewards should only go to those with certain inherited characteristics (such as ownership or gender). The value orientation operating in Daimler may not be consciously chosen or explicitly acknowledged, yet can pervasively shape the kinds of HRM policies adopted. These policies may or may not be appropriate for the longer term success of the organization. The analysis of organizational culture includes an exploration of the unconscious and intersubjective structures of organizational life. Examining critical moments of organizational history contributes to this insight (Laurel and Launenfeld 2003). However, if change is desirable to organizational members, one requires a method of analysis and intervention that is based upon the willingness of members to assume personal responsibility for their actions. At Daimler, some of the governing values of behavior include unilateral protection of self and others, win-lose attitudes, owning and controlling of tasks, rationality, and suppression of negative feelings (Perlmutter, 2008). At Daimler, the host culture defines the social class and ethnic origins of employees joining the organization as well as clients and customers it serves. In addition, the host culture represents the character of the political climate of an organization, the degree to which it is friendly or hostile. Leadership sensitivity to the nuances of host culture assures the continued openness of Daimler as part of a larger social system. Coming to know the identity of organizations evokes the personal meaning, experience, and perception of organizational life in the minds of individual members. Gaining access to members’ organizational experience helps Daimler’s managers better understand individual and collective motives that govern their behavior and enables us to distinguish otherwise similar organizations from one another. Organizational identity defines who we all are in a group and who (or what) we can be as members of groups (role identity) (Reynolds, 1995). This includes the network of repeated interpersonal strategies for coping with (defending against) interpersonal and organizational events that are stressful and perceived as threatening. At Daimler, organizational identity is found in the difficult to observe interactions within organizations–the inter-subjective structure of self-object relationships. Discovering it involves finding out how people experience one another and observing how they handle themselves and others under stressful circumstances. It does not assume that people in organizations share the same organizational image. Nor does it assume a collective identity for organizational members. However, it does imply that organizational culture and strategies for managing internal and external affairs are the result of members’ individual personalities and experiences that shape organizational meanings and experiences (Perlmutter, 2008).

Solutions and Recommendations

For Daimler, organizational identity should be understood as the main priority of HRM. These cultural interactions are often filled with many reenactments of the dependency, attachment, separation, and individuation dilemmas of parent-infant relations. The analysis of transference in organizations involves the assembly of a coherent image of interpersonal patterns of human interactions. Daimler must, momentarily, shift the center of experience away from themselves so that they may truly comprehend the experience of organizational members Empathy is acquired through identification. That is, one must place himself or herself in the shoes of organizational members, laced in their experience of themselves and others as part of a shared organizational culture. In this manner, organizational researchers can acquire a meaningful and subjectively valid interpretive understanding of interpersonal and organizational dynamics (Reed, 2001; Daimler Home Page 2008).

Interpretation of individual and collective organizational meanings is the avenue to understanding organizational identity at Daimler. With respect to transference and counter-transference dynamics, psychoanalytic action researchers learn to use themselves (the self as the core of the personality and interpersonal experience) as instruments of organizational study. Empathy and introspection become necessary skills in helping subjects to share feelings and ideas that previously could not be discussed. This requires that researchers attempt to confirm or refute interpretations acquired through self-conscious acts of identification and empathy (Daimler Home Page 2008). At Daimler, stressful organizational events such as change in leadership, retrenchment, cutbacks, policy or budgetary revisions, and shifts of political climate can foster psychologically regressive and defensive responses among members. Reactions to stress are highly individual but, inevitably, are worked through at the interpersonal, group, and organizational levels of experience. Hence, organizational identity is the outcome of a collective compromise formation and analysis of transference between and among organizational members, and compromise formation and transference are the key to understanding these phenomena. At this point, we need to examine the various patterns of transference, such as mirroring and idealizing, twinship, and persecutory self and other relations (Schuler 1998). The power of high position may exaggerate individual demands for admiration and feelings of grandiosity. At Daimler, the presence of hierarchies may perpetuate selecting and rewarding individuals with narcissistic proclivities, thereby indulging quests for power and authority by way of positions of public visibility and official importance. Such idealization of organizational leadership produces a culture of organizational perfectionism in which the detection and correction of errors are unlikely. At Daimler, subordinates are expected to admire their managers and appear to be forced into a position of overdependence upon them. In these circumstances, staff loyalty and admiration encourage idealized images of their managers, which distort staff capacity to recognize limitations (Schuler 1998).

In sum, the case of Daimler shows that managing human resources effectively has never been as important as it is today and will be tomorrow. In today’s service economy of knowledge-based, high-discretion jobs, the commitment and competence of employees can spell the difference between those organizations that win and those that are merely in the race. Establishing policies, programs, and practices that produce these results on a cost-effective basis and comply with laws and regulations is a complex undertaking. HRM can and should play a strategic role in the management of the organization. Given the changes facing organizations today, a human resources function that operates as business as usual will quickly lose its value to the organization.

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