Firm: Credit Lyonnais
Countries: France, World-wide
International HRM Issue: The internationalization of a bank & the cultural conflicts involved
This study of Credit Lyonnais, one of the world's largest banks with offices in over 60 countries, examines the organisation and human resource management strategies thought necessary to survive the rapid market changes in international banking. Credit Lyonnais provides a particularly good example of a large bank which is determined to succeed through growth in services offered in existing markets and through extending into new markets.
Credit Lyonnais has offices on all continents, and in the ...view middle of the document...
One of the key challenges that face Credit Lyonnais is to fully internationalise its HRM policies and become a true multi-cultural, globalised, organisation. This task is made harder as many senior managers think that the bank is already international simply because it has a tradition of foreign operations and that it has doubled its size through the acquisition of foreign banks. Such thoughts obscure the fact that Credit Lyonnais is still dominated by French culture and French ways of doing businesses despite the fact that the bank now employs far more people outside of France than within.
3) French Context
To have a good understanding of the cultural environment of this HRM there is a need to consider the culture of France, particularly its political & economic history and the style of management and organisation often associated with French companies. In France the State plays a key role in the economy and in society: the State regulates economic development through economic planning over a five-year period. State ownership of services and industries is still high compared to most other EU Member States and as one of the last large nationalised banks to be privatised, Credit Lyonnais is still strongly influenced by government.
With a savings rate of 12.2% of disposable income, France traditionally represents a good market for banks although de-regulation of the banking industry and the privatisation of some State owned banks during the 1980s meant that banking profits rapidly declined. However, from a HRM perspective, the French government, which always plays a primary role in defining the basic terms of the relationship between employers and employees, insisted on the maintenance of workers` standard of living through wage indexing (linking wage increases to the rate of inflation), increased social insurance provision and through dissuading banks from making staff redundant.
Although trade union membership in France is low (only about 10% of the working population are members), unions are powerful and strongly influence the government. Unions in France, as elsewhere, negotiate collective agreements but, unlike in many other countries such as the UK, these agreements, once negotiated with the employer body in the relevant industry, then legally apply to all employees in the industry. Terms and conditions of employment in the banking industry are generous because of these forces, which are: a government supportive of workers, and union negotiated collective agreements. However, today the banking sector is faced with new needs and the collective agreements are considered by many bank managers as a block to competitiveness.
PART ONE: FRENCH HRM at Credit Lyonnais
4) The Nature of Management in France
Short-comings in French management generally are noted: the elitist management education system has been criticised by some for not providing the right calibre of flexible, international managers, capable of responding quickly enough to...