Published: Thu, 12 Oct 2017
Human Resources Strategies of Global markets
HRM strategies are an integral part of any organizational setup. HRM is basically the software that makes the organizations run smoothly. They handle various aspects within the organization and take care of the employees, their needs and their relationships with the management. Now, the role of HR managers has taken a whole new meaning in the globalized world. As a matter of fact, as the new markets opened up through economic reforms in the last couple of decades, it gave rise to a whole lot of new possibilities as well as conundrums. Especially the emerging markets in Asia offered significant opportunities to the western MNCs to expand their businesses into those populous and rapidly growing markets. These new set of consumers were quickly becoming important potential targets who were having a lot of disposable incomes along with a newfound taste for world class products and services. So, the MNCs who were witnessing dwindling returns in the saturate western markets wasted no time in grabbing this opportunity.
Moreover, the operations in those places were significantly cost effective due to cheap labor rates and other assorted costs and hence a lot of these firms also set up manufacturing units in the countries like China, India & Thailand. But they soon realized that while setting up the business was simple, it was not always easy to manage and run it smoothly. Because a lot of local skilled and unskilled workers were employed in these facilities, it posed a significant threat to the HR managers. This was because the cultural values, traditions, backgrounds etc were significantly different in those places along with a different set of predominant religions and languages. So, it became necessary for the HRMs to make sure that these inherent cultural differences do not affect the operations in a negative way. This paper tries to explore how the HRM strategies and frameworks have changed due to these emerging global markets and how are they adjusting to these changes. For that purpose, it will take the views of the employees who have experienced these overseas operations on behalf of some of the UK MNCs.
Review of Relevant Literature:
In recent times, we have witnessed a growing number of serious research works that deal with the impacts of the cultural nuances in the home as well as the host countries on the employees of the MNCs that are present in multiple geographic locations spanning diverse cultures and demographics (Edwards, 1998, Farley et al., 2004, Ferner, 1997, Ferner and Quintainilla, 1998, Gamble, 2003, Guest and Hoque, 1996, Muller, 1998). These researchers have mostly examined the MNCs operating in the Western economies which are more or less similar in culture (Almond et al., 2003, Edward and Ferner, 2004; Farley et al., 2004, Ferner and Varul, 1999, Innes and Morris, 1995, Tayeb, 1998). Since the emergence of the new economies is a pretty recent phenomenon, they have still eluded the attention from the scholars and this study can be proved helpful here.
We should also note in this regard that with the newfound economic freedom, commercial success and boosted confidence, the MNCs from the emerging economies are also entering the developed markets like UK (Liu et al., 2005). Earlier, only Japan was considered to be an economic force to recon with in Asia & they had built a considerable brand image for their MNCs over the second part of the 20th century. But in recent decades Koreans and Taiwanese have emulated their success followed by Thailand, Malaysia & other South East Asian economies. More recently, they have been joined by India & China, two of the most populous and largest countries in the world and hence unmistakably the biggest market for all sorts of goods (Edward and Ferner, 2004). This procedure has introduced flow of workers in both directions. There are the expatriates from countries like UK who work in these locations and there are the native people in those markets who are hired by the MNCs. Ensuring an effective working atmosphere for culturally and demographically diverse workforces is on of the most potent challenges for the HR mangers in these organizations (Farley et al., 2004, Hillman and Wan, 2005). This situation also gets more confusing when mergers and acquisitions happen across boundaries (Edward and Ferner, 2004). For example if a British company takes over a Chinese firm, would it use British or Chinese style of management policies? It has to be noted that both the styles differ immensely in their outlook and attitudes. If it uses Chinese style, would not it be difficult for them to implement the same. On the other hand, if they use their British style of management, what would be the reaction of Chinese employees in the same (Liu et al., 2005)? These are the issues that a HR manager has to deal with and make decisions in this globalized world. In the similar lines, they should also take care of various operations like recruitment, training, performance appraisal, promotions, bonuses, payroll processing and organizational communications and these also differ from country to country according to their socio cultural, economic as well as regulatory setup (Chow et al., 2000, Edward and Ferner, 2004, Farley et al., 2004, Liu et al., 2005).
Several previous works on the MNCs have nevertheless explored this dilemma of managing two diverse management styles in the home and the host country with respect to the HRM strategies as well as practices (Chow et al., 1999, Farley et al., 2004, Hofstede, 1993, 1997, Rosenzweig and Nohria, 1994). But even they have eluded the impacts of cultural differences in the subsidiaries of the MNCs in the global markets. But we do have some research works that deal with the HRM practices in the companies in the Asia Pacific markets (Awasthi et al. 2001, Bae et al., 1998, Chow et al., 2000, Hofstede and Bond, 1988, Huang, 2000, Taylor et al., 1996, Ulgado et al., 1994). These studies have in general concluded that the nationality of place of origin matters most in shaping the organizational cultures of the firms. This includes various cultural as well as socio political aspects of those countries. But these studies have also not explored how these strategies change when they expand in other countries with different socio cultural setups as well as different political atmosphere.
Based on the initial observations, the following research questions can be suggested for this particular study,
What changes are observed in the HRM policies of UK MNCs when they operate in the emerging global markets?
How much impact does the home country culture have on these organizations in their decision making process?
What are the significant factors that affect the HRM policy decisions in these markets?
What are the specific strategies used in these markets in different fields like recruitment, training, performance appraisal and organizational structure and inter organizational communications?
The methodology being used in this study has also thrown up a lot of challenges. Basically, it is an exploratory study as it is a reasonably new field of research. As we have seen, the topic does not exactly offer too many previous studies although there are many research works that deal with the related issues. So, the data collection process is primarily based on survey as well as interviews with people who are related to the relevant sectors in various ways. The biggest issue here is getting the right sample for the survey and interviews. Since it is dealing with the MNCs operating in diverse countries, it is necessary to get the people involved in such operations to get an inside view of the same. So, the HRM personnel from different subsidiaries of UK MNCs operating in diverse locations will be mailed the relevant questionnaire for this purpose so that they can specify their preferences. It is understandable that all of them will not be responding and hence as many people as possible will be contacted so that in end we get a decent sample size. The effort would be to make the sample geographically as diverse as possible. Also, it will be difficult to meet them personally due to practical reasons. Hence an online survey would be created for the purpose which would help us in getting the responses in quick time and without any expenses. The survey will be kept crisp and short and it will mostly consist of multiple choice questions. But some of it will also contain open ended options so that the respondents can speak up their mind a bitmore if they feel like doing so. The interview questionnaire will contain limited number of question but they will be open ended so that they can collect more insights form the respondents. After the surveys, some of the hand picked respondents can be sent a second set of questionnaire with a few more detailed questions for online interviews. However, the feasibility of the same has to be explored as it might look too time consuming to them. The data analysis part will consist of statistical analysis and representation of the survey results which can either be directly achieved from online survey service providers or can be done with the spreadsheet software like excel. Also, the subjective responses can be analyzed using the grounded theory approach which would allow us to build up a theory without making any prior assumptions about anything related to the study (Strauss & Corbin, 1994).
Resources: As mentioned earlier, the study will be based on the primary data collected through the survey and interviews. To build the basic premise, numerous research journals, books and online resources have been consulted, which constitute the secondary data for this study. But the major chunk of information will be derived from the respondents to the surveys as well as the interviews. The data thus collected will be both objective and subjective and they will be subjected to various forms of analysis as explained above.
This topic offers an interesting opportunity because it allows us to look into the matter of to explore the HRM practices in the new emerging markets which would gain greater importance in the near future. The following results are being expected through this particular study,
An idea about the HRM policy shifts in the UK MNCs when in the emerging global markets, especially those in Asia
An evaluation of the impact of home country culture on the HRM policies of these firms in the said markets
An understanding of the significant factors that affect the HRM policy decisions in these markets
An idea about the specific strategies adapted in these markets by the MNCs in different fields like recruitment, training, performance appraisal and organizational structure and inter organizational communications
HRM policy is a delicate issue in any organization and especially when diversity in the workforce is involved, it becomes very interesting. But there can be several limitations in this study. Firstly, it is practically very difficult to get respondents from diverse geographies. That is why the online questionnaire is being used. But even then, it is not easy to get the desired information. It has its share of positives like ease of use and lack of any assorted costs, but online interactions lack the depth of personal interactions. For example, when we interact personally, even the body language and gestures of a person can say a lot of things which is not possible in case online interactions. Secondly, since we are discussion the internal organizational strategies, the respondents might not be too open in discussing these issues and might also prefer not to respond on the same. More importantly, they would be reluctant in discussing the negatives in their organization and will be more forthcoming and probably exaggerate the positives. Nevertheless, it can be hoped that with proper analysis of the responses, one can still arrive at a logical conclusion through these methods.
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