esposearch - ideal online careers

Strategic Human Resource Management Issues at Volvo


Modern human resource management has evolved over time, with the development of new technology and competition among the companies in the increasingly congested market. Volvo Corporation has developed a management strategy to cope with their complex networks of business models all over the world. The first approach is remote management strategy where the management team is working with employees who are located a distance apart. This paper highlights how Volvo has jangled this new management concept with success. In addition, to strengthen its global human resource base, Volvo has also established a Global Business Leadership Program for high potential middle managers in the corporation, to groom the future leaders at the corporation (Guttman, 2007, p.5). Secondly, the corporation has also established a structure for ensuring that their employees meet regularly in both social and official capacities to enhance the effectiveness of the high involvement practices in their human resource department. The paper underlines the structure of this program and how it has benefited the corporation.


Organization’s most priced assets are the people working in the said organization who either work jointly as a team or at individual level in order to realize the organization’s objectives (Armstrong, 2006). Perhaps this is the reason why the strategic and coherent management style (Human Resource Management) has been adopted by many organizations, in an attempt to focus on their vision. Global automaker Volvo Corporation is an example of a company that has taken human resource management as an important and integral part of its strategies to enhance its High Involvement Work System on its global network. They adopted this considering a recent research that suggests that high involvement can develop positive beliefs as well as attitudes that can enhance employees’ engagement and performance. The diagram below illustrates the impact of high involvement work structure on the overall productivity of a firm

HIWS and Productivity.
Figure 1. HIWS and Productivity.

Background of Volvo Group

The Volvo Group is a global producer of buses, trucks, equipment for construction, drive system for marines and industrial applications, and components of aircraft engines. They are one of the worlds leading suppliers of transport solutions for commercial use, and offering their customers in more than 180 countries financing and service solutions. The group’s major market destination for their products is in Europe, North America, and the presently growing market of Asia. Their spare parts and many more services are handled by their global network of outlets, where they have invested a great deal of money in logistics management, product development, and other areas such as production (Hall, 2007, p. 231). The 2006 financial presented one of the most successful years in the Volvo history. This year saw their sales increase to nearly SEK 250 billion and provided employment to over 83 000 people in over 58 countries, with majority of the employments in Sweden, United States, and France (Camilla & Noomi, 2007, p.39).

Volvo Group’s vision is to be the world’s leading supplier of commercial transport solutions (Camilla & Noomi, 2007, p.6). Their corporate values are quality, safety and environmental care, with each value reflecting the product development and shows how they are intended to be perceived in the society as a whole, by evaluating their consumer market and employees (11).

Human Resource Management practices at Volvo

Remote management & High Involvement work system

Volvo corporation adopted this management approach that involves independent managers, situated in different countries or locations and responsible for all matters concerning the company at individual capacity, but maintaining the company image through vision (Nordengren & Olsen, 2006, 84). This management method is separate from the traditional approach in that the manager has to keep a team that is located at a far geographical distance, with the familiar task of a team that cooperates with each other and everyone to keep up with increased complexity in their global matrix of activities. Even though modern technology has “narrowed” down the distance between employees and their managers, the challenge still exists for such managers to compensate for the daily lack of personal interactions with their employees (Leijon, & Malm, 2007, p. 44). There is normally a sense of lack of affiliation among the co-workers, and their managers, with employees sometimes finding it difficult to prioritize the local site’s demands with those of their managers (46). How has Volvo achieved this despite the drawbacks?

The high involvement work practices range from the selection of the right people to commit to training and skill development, team-based work organization, job security, and incentive-based pay. Volvo Corporation has taken seriously specific practices on training and skill development.

Leadership & Management Programs

Training and development are essential in a high-involvement organization since employees are in a better position to make important workplace decisions. MacDuffie’s (1995, p.49) study of an international database that examined 62 automobile assembly plants in 1989-90 revealed that flexible production plants with high-involvement practices such as extensive employee training consistently outperformed traditional plants in terms of both productivity and quality

Adams' Equity Theory - job motivation (Guttman H M (2007d ).
Figure 2: Adams’ Equity Theory – job motivation (Guttman H M (2007d ).

In an effort to strengthen its global human resource base, Volvo has established a Global Business Leadership Program for high potential middle managers in the corporation, with an aim of grooming them for more senior posts Guttman, 2007, p.5). This was to successfully help them initiate their planned series of changes within the corporation and develop a proper plan for high involvement work system. This program is structured in quarterly workshops coupled with regular action learning sessions, with either face-to-face or virtual approaches (Guttman, 2007, p. 3-4). A program that is conducted by Ashridge Consultants is designed such that 40% of learning content focuses on individual leadership development i.e. what makes a successful leader by the use of self-awareness analysis tools like the Myers Briggs. The remaining content (60%) focuses on the specific needs and wishes of the participants in line with their specific roles forecasting their current and future roles. The program is an important process since it was co-designed with participants themselves to ensure that what is important for Volvo Corporation is reflected in the knowledge acquisition process.

Meetings and social events

According to Hofstede (1991), in any international company, it’s always necessary for the managers to have basic knowledge of the national identities so as to understand the impact this identity will create in the overall operation of the company in the sense of corporate culture. Furthermore organizations that use methods like socialization, legends, and rituals to “create a strong collective corporate identity”, always emerge successful (Jacobsen & Thorsvik 2002). That is why it isn’t a surprise when Volvo Corporation encourages interactions among the staff members by organizing ceremonies and social events that bring together all the co-workers together.

When Volvo initiated remote management method across its global networks of enterprises in 2006, it commissioned a study to establish the impact this approach had on the overall operations of the corporation and to establish ways of improvement. Many management experts concur that remote leadership management concept requires that players create as well as maintain personal relationships (Nilsson, 2003, p. 311). This means that the team must be motivated from a distance, as Jacobsen & Thorsvik (2002, P.313) found out that motivated team can work even if they are distance apart. To enhance this, Volvo management team initiated face-to-face regular meetings between the co-workers, to ensure that they get to know each other and familiarize themselves (Alvesson & Berg 1992). This also creates a bond of trust among the employees as well as building the communication channel starting point; that would ultimately promote understanding regardless of the distance between the team members (Nordengren & Olsen 2006).


Considering Volvo Corporation’s efforts to establish a working team, it is easy to note how they value the organizational commitment that is considered a central concept in high involvement human resource practice (Revstedt, 2002, p.48). This is why the corporation is giving human resource development a priority in order get their employees committed to the vision of their corporation.


  1. Armstrong, Michael (2006). A Handbook of Human Resource Management Practice (10th ed.). London: Kogan Page. ISBN 0-7494-4631-5. OCLC 62282248.
  2. Hall K (2007) Speed Lead – faster, simpler ways to manage people, projects and teams in complex companies, Nicolas Brealey Publishing, London, UK.
  3. Leijon, Wallgren & Malm – Andersson (2007) Managers’ work motivation and their Concepts of what motivates their subordinates: A study in an IT consultancy firm. Not published at the time of our deadline.
  4. Lewis L K (2000) Communicating change: Four cases of quality programs, University of Texas at Austin, Article in The Journal of Business Communication volume 37 number 2000 p 128-155, Association for Business Communication Page 64
  5. Alvesson M & Berg P O (1992) Corporate Culture and Organizational Symbolism, Walter de Gruyter, Berlin, Germany.
  6. Hall K (2007) Speed Lead – faster, simpler ways to manage people, projects and teams in complex companies, Nicolas Brealey Publishing, London, UK.
  7. Hatch M J (1997), Organization Theory – Modern Symbolic and Postmodern Perspectives, Oxford University Press, Oxford UK p. 129, 130
  8. Hofstede G (1991) Cultures and Organizations: Software of the mind, McGraw-Hill International (UK) Limited, London UK. P 9-44 & 191-229
  9. Hofstede G (1991) Cultures and organizations: Software of the mind, McGraw-Hill International (UK) Limited, London UK
  10. Jacobsen D I & Thorsvik J (2002) How modern organizations work, Studentlitteratur,Lund SwedenPage 63
  11. Camilla Johnsson & Noomi Rabb (2007) Programme of Human Resource
  12. Development and Labour Relations Global Manufacturing, Volvo Trucks Cooperation Master Thesis
  13. Nordengren M, Olsen B (2006) Leading from a distance – in time and space, Kristianstads Boktryckeri AB, Kristianstad Sweden, pp. 83-134
  14. Revstedt P (2002) Motivational work Liber Utbildning AB, Stockholm Sweden
  15. Guttman H M (2007) Are your global team members miles apart? Article in Howard management update, 2007 pp. 3-5

About the author

we will assist you 24/7

Quick Contact

Keep current with the ESPOSEARCH Blog. Let’s get it written!

EspoSearch Ⓒ 2022 - All Rights Are Reserved