In light of the continuous economic recession, carmakers are facing tough profitability challenges. This is not the case of Renault, which keeps leading the global automobile market. Being headquartered in France, Renault scores high on individualism and uncertainty avoidance. Nevertheless, the company has managed to find a strategic consensus with its major global allies, including Nissan and Daimler. Renault uses mergers and strategic alliances to expand its global market presence. Its structure is that of a value network, in which all organizational members play equally essential roles and make important contributions to the company's global development. Renault has managed to solve most HRM problems it encountered in its expansion worldwide. However, to realize its global ambitions, Renault will have to face a continued economic slowdown and recognize the importance of sustainability, thus bringing the world closer to its environmental and cost-effective goals.
Renault, France, and Hofstede's Cultural Dimensions
Being headquartered in France, Renault is heavily influenced by French cultural values. Hofstede's dimensions shed light on the most important aspects of Renault's organizational culture. According to Geert Hofstede, France scores high on the power distance dimension. Large power distance countries are well-known for using centralized authority and paternalistic management style; they accept power as a source of privileges and take inequality for granted. France pursues the principles of centralization in almost every sphere, from business to government and transportation, and power in French organizations is unequally distributed (Geert Hofstede).
France is also highly individualistic: it scores as high as 71 on Hosftede's individualism dimension (Geert Hofstede). This is why companies that are based in France, including Renault, value individuality and individual contributions more than they value groups and teamwork (Aswathappa & Dash 131). France is also regarded as a feminine country, and French companies develop policies to help workers maintain a reasonable work-life balance (Geert Hofstede). In France, people work to live and not vice versa; this is why companies operate only 35 hours a week and have 5 weeks of holidays every year (Geert Hofstede). Finally, France is a country of high uncertainty avoidance and a strong commitment to short-term development goals. French companies are thorough in their planning and risk management procedures and tend to develop sophisticated written policies and rules. They are also short-term-oriented, being driven more by immediate gratification than long-term considerations and savings (Geert Hofstede).
Products and Benefits of Going Global
Renault is well-known for its considerable achievements in the car manufacturing industry. Renault's passenger vehicles are used and enjoyed by customers around the globe. The company also offers a wide range of Renault Trucks that are claimed to drive customer satisfaction and comfort. Renault trucks are supplied in the four different segments: Regional distribution, City distribution, Long-distance transport, and Construction transport. Additionally, Renault supplies its customers with a wide array of accessory products, which are designed mostly to enhance the safety and operation of Renault vehicles.
Today, Renault is one of the most successful global car manufacturers. The benefits of its global expansion are difficult to overestimate. In 1999, Renault created a strategic alliance with Nissan. Since that time, the car manufacturer has "gained the scale and critical mass of a major international carmaker in a globalized and ultra-competitive automotive industry" (Automotive World). Economies of scale and increased profitability are just some of the many benefits of Renault's global expansion. The company managed to minimize the negative impacts of recession in Europe and achieved record sales in 2012 – 8.1 million vehicles (Automotive World). Its international development accelerated and, at present, Renault's BRIC countries (Brazil, Russia, India and China) make up 36% of the global automotive market (Automotive World). Renault's global expansion has created a favorable environment where the company's risks are spread geographically, thus making it stronger in the face of the emerging global challenges. Meanwhile, the company is capitalizing on the innovative and labor force opportunities brought up by the countries, in which it is gaining presence.
How Renault Expands Globally
According to Renault's new global strategy, the company uses seven strategic levers to meet its objectives and targets. One of such levers is maintaining market positions in Europe, while also pursuing international growth (Renault). Still, strategic alliances, mergers and acquisitions remain the chief instrument of strategic global expansion for Renault. Its first strategic alliance with Nissan eventually became the most reliable and long-lasting partnership in the history of the international automotive industry (Automotive World). The latest news suggest that Renault and Nissan have entered a new lasting partnership with Daimler, which is aimed at sharing technical information and developing new sustainable engines for the most popular vehicles (Amick). According to Amick, Daimler, Renault and Ford are working collaboratively to develop new fuel-efficient cars and fuel-cell vehicles, which have the potential to become much more efficient than today's electronic vehicles. Renault's global strategy is a unique combination of the globalized and localized approaches to car manufacturing. Being actively supported by the French headquarters, Renault's local divisions develop new vehicle modalities to suit the needs of national and local markets (Xiao). For instance, in China, Renault has presented a new Talisman model, which signifies the company's strong desire to tailor its global mission to the needs of local consumers (Xiao). This balance of the global and local justifies the implementation of a new organizational structure, which makes the organization capable of meeting the changing needs of the global market environment.
Renault's Organizational Structure
The organizational structure of Renault reflects the company's genuine commitment to the principles of global expansion. Schmid and Grosche are right: "a company that views itself as a value network is better able to achieve this goal than one that maintains the pyramid structure of a traditional hierarchy" (7). The graph below offers a snapshot of Renault's organizational structure, although it does not present a complete picture of global expansion at Renault. The fundamental principle of Renault's organizational structure is standardization of all engineering processes and a strong reliance on the satellite design centers (Renault). Renault coordinates all technical standards and harmonizes technical policies and requirements to guarantee that all vehicles are of equally high-quality.
Global HRM Issues at Renault
A company that decides to go global will hardly avoid HR management issues, mainly because the principles, standards, and expectations vary greatly across nations and cultures. Every year, companies lose millions of dollars because their mergers fail. The development of the Renault-Nissan partnership was not smooth. Nissan was a company with a purely collectivist culture (Aswathappa & Dash 131). Individual performance was not valued and direct communication between supervisors and subordinates was virtually absent (Aswathappa & Dash 131). A strong family atmosphere was developed to encourage effective performance in groups (Aswathappa & Dash 131). Renault has managed to incorporate a number of HRM changes at Nissan, reducing the number of top managers, eliminating unnecessary horizontal structures and relationships, and encouraging individual initiatives. Unfortunately, the lack of the family atmosphere at Nissan makes managers and employees frustrated over their new positions within the company (Aswathappa & Dash 131). Many of them do not accept the new promotion principles, based on achievements and not seniority. As a result, Renault must find a reasonable balance between Nissan's historical commitments to collectivism and the need to create a sense of urgency and profit-orientation to successfully compete in the global automotive markets.
Renault and Future Challenges
As the company is going global, it will have to face two major challenges – that of sustainability and that of cross-cultural differences in HRM. Additionally, Renault will have to find a way to implement low-cost vehicle alternatives, in order to satisfy a greater number of customers. Rashid writes that Renault is building new production capacities in Morocco, where new Kangoo-like low-cost vehicles will be manufactured. At the same time, the Renault brand is investing resources in the development of electric vehicles that could be sold outside Europe (International Fleet World). Renault's continued presence in the global markets makes it stronger in the face of the future economic uncertainties: while European car markets are shrinking, Asia displays a strong argument in favor of the company's global expansion. Renault should become more sensitive to the cultural needs of its global partners, in order to reduce the organizational and commercial tensions similar to those faced in its strategic alliance with Nissan.
Conclusion: Working with Renault
Based on everything written in this paper, I would be strongly interested to work with Renault in one of its Chinese locations. The main reason why I want to work with Renault is because the company displays steady growth patterns and has a well-developed strategy of organizational development for the next few years. In addition, Renault is claimed to value individual contributions and empowers employees to make decisions. As a result, I see a huge potential for personal development and professional growth, if I have a chance to become part of Renault. Finally, Chinese consumers enjoy Renault products, which is a strong guarantee of the company's continued presence in this country. I am looking for stability and strong professional development prospects, and I am confident that a company as large and successful as Renault can satisfy the needs of the most ambitious worker.