Engineering products is a long-established British engineering firm that for much of the 20th century produced fasteners for industrial clients: International HRM Assignment, NCI, Ireland

Learning Outcomes:-

• Examine the features of the host environment that inhibit diffusion, or require that practices be altered to fit local conditions;
• Consider the possible directions in which practices flow across a multinational;
• Investigate the organizational characteristics of MNCs that promote or hinder. diffusion, particularly the nature of integration;
• Examine the processes of diffusion, focusing on the relationships between actors at different levels of the organization.

Introduction

Engineering products is a long-established British engineering firm that for much of the 20^th century produced fasteners for industrial clients. The company undertook significant restructuring in the 2000s selling off or closing many of its activities so that currently it has three business areas: automotive components, defense, and industrial services.

These business areas form international product divisions which are the primary axis of internal organization, linking similar parts of the group across countries. The restructuring also involved expansion overseas to the point that half of the group’s 33,000 employees work abroad; three-quarters of these are in Western Europe and of the remaining quarter in North America.

The largest of the three business areas is automotive components, employing 60% of the group’s workforce. The division is a first-tier supplier, dealing with several of the multinational final producers of cars, and is less concentrated in the UK than the company as a whole;

Table 1 shows that only a small proportion of the division’s sales are made in Britain., while an even smaller proportion of the workforce is employed there. Continental Europe is the base for a much larger proportion of sales and employment, with most of this being in Germany, France, and Spain. The case study concentrates on this division of the multinational.

In recent years the pressure from the automotive division’s customers has become a central force in shaping how it manages its international operations in general and its international workforce. The customers themselves have sought to standardize their methods of production and working practices through a process of sharing best practices across sites.

This has meant that, while the cars sold vary in minor respects between counties, they are produced in increasingly similar ways. One consequence has been that the components they purchase need to be exactly the same specification in different countries. Since many of the first-tier suppliers in the motor industry are themselves multinational, and in many cases supply the same companies in different countries, the effect has been to persuade the components manufacturers to standardize their own operations internationally.