PESTEL Analysis for Nimble Storage's Transition From Ethnocentrism to Geocentrism - Essay Sample

Introduction

To achieve this new objective of switching from ethnocentrism to geocentrism, an organization needs to analyze its environment before exploring new strategies or making new changes (Michailova et al., 2017). Consequently, one considers PESTEL analysis and its relevance in the identification of key opportunities and challenges to be encountered by Nimble Storage in the endeavour. As indicated above, the company's operation was based on Hewett Packard model where the majority of the company's actions including its recruitment was pro-American, favouring the employment of Americans who then occupy positions in the company's overseas subsidiaries.

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While the approach may have worked for the company in the past, it fails to achieve maximum success in a global dynamic working environment. Therefore, a more geocentric approach is the best approach for a business. PESTEL analysis is a framework utilized to analyse macro-environmental factors that affect a business. The findings of the analysis then point out potential challenges or opportunities for a company (Shatskaya et al., 2016). PESTEL stands for:

• P - Political
• E - Economic
• S - Social
• T- Technological
• E - Environmental
• L - Legal

Regardless of the significance of all facets of the tool, this discussion will focus on the political trends for potential risks concerning human resource management of Nimble Storage's recruitment process in the future.

Unlike the ethnocentric approach in the recruitment of employees where a company only obeys the labour laws of its parent country, the geocentric approach requires one to consider the laws that apply to employees from different countries (Michailova et al., 2017). In this context, the first challenge identified through political analysis of the politics of human resource is stringent laws present in different countries. For example, while the labour laws in America allow for some practices such as immediate termination of employment, some countries like those that Japan does not. Therefore, if a Japanese employee of Nimble Storage is fired on an immediate basis, the individual may cause legal issues for the company, especially if it has some operations in Japan.

Politically, some countries governments have rules regarding the operations of foreign companies in their territories. For example, some countries require that foreign companies have a certain percentage of local professionals on its roster. In this context, this causes various logistical challenges for a company's human resource department concerning the recruitment of employees in unfamiliar territories where the company has little or no connects and contacts. Moreover, the employment process may be affected by the politics of the country where some government powers may force the company to employ particular people positions in the company.

Despite the challenges associated with different political environments, there exist several opportunities available due to geocentric approaches in recruitment. The first advantage of the approach is the accumulation of staff with international experience and contacts across borders. Such executives can use their contacts in these different countries for the benefit of the business, especially in the events of expansion. Additionally, the experience of each executive contributes to the collective accomplishment of the company's objective. An integrated employ pool also contributes to the diversification of the company, which results in better productivity, especially in new territories.

Another investigative tool applicable in this context is Hofstede's cultural dimensions model. The model proposes a four-dimensional cultural value analysis: individualism-collectivism; uncertainty avoidance; power distance (strength of social hierarchy) and masculinity-femininity (Bakir et al., 2015). Concerning a geocentric approach, only two dimensions of the model are of interest to this assignment: the uncertainty avoidance and the power distance dimension. Inferring to the uncertainty avoidance dimension, a company must use people familiar with the intricacies of their countries for particular positions of a company's subsidiary in a new territory. In using people familiar with the laws, the business environment a company avoids the uncertainty associated with new markets. In the same way, the power distance dimension ensures integration in such a scenario.

Considering the political and cultural factors highlighted above, one would recommend a gradual yet focused approach in the change from ethnocentrism to geocentrism for Nimble Storage. By mitigating the challenges identified by the analysis above and taking advantage of the opportunities, the company will surely change its human resource approach successfully and achieve success in the global scene.

Conclusion

In conclusion, PESTEL and Hofstede's analysis are indeed useful tools for the identification of challenges and opportunities in the business industry. Through these tools, companies can explore new markets, niches or strategies before entering or enacting them. Accordingly, companies get findings on these issues without necessarily risking the welfare of the organization. Through such analysis, Nimble Storage will be able to migrate smoothly from ethnocentric business approach to a more geocentric methodology of human resource management.

References

Bakir, A., Blodgett, J. G., Vitell, S. J., & Rose, G. M. (2015). A preliminary investigation of the reliability and validity of Hofstede's cross cultural dimensions. In Proceedings of the 2000 Academy of Marketing Science (AMS) Annual Conference (pp. 226-232). Springer, Cham.

Isichei, M., & Collings, D. G. (2016). Geocentric management. In Encyclopedia of Human Resource Management. Edward Elgar Publishing Limited.

Michailova, S., Piekkari, R., Storgaard, M., & Tienari, J. (2017). Rethinking ethnocentrism in international business research. Global Strategy Journal, 7(4), 335-353.

Shatskaya, E., Samarina, M., & Nekhorosheva, K. (2016). PESTEL analysis as a tool of strategic analysis in international markets. SCOPE ACADEMIC HOUSE B&M PUBLISHING, 47.

Yamato, Y. (2016). Cloud storage application area of HDD-SSD hybrid storage, distributed storage, and HDD storage. IEEJ Transactions on Electrical and Electronic Engineering, 11(5), 674-675.