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Human resource management (HRM) is known and accepted in the broadest sense of the term, as a form of management that includes "all management decisions and actions that affect the nature of the relationship between the organization and the employees - its human resources" (Beer et al., 1984, p. 1). It is defined as the process of coordinating an organization's human resources, or employees, to meet organizational goals. As can be observed based on the definition, the tasks of those belonging in HRM can be complex as it involves all issues that encompasses employee and firm relationship. Believing that the most important asset of a business is people in order to achieve sustained business success is the core philosophy of human resource management (HRM).
In the era of globalization multinational firms are playing effective role in the development of various sectors of economies. Around twenty per cent of multinational firms hold eighty percent of world resources. In order to keep these organizations profitable across the globe, size and working of human resources employed need to be rationalized. Use of modern technology has forced the Human Resource Management department of multinational organizations to right size the human resources to take maximum output against the cost incurred. Multinational organizations comprise various global offices or industries at regional or country level with their unique distribution over the globe. These offices or factories need qualified and technical hands in various areas. To distribute technical and qualified resources among various departments, for example, procurement, finance, engineering, marketing, research, workshop etc., in accordance with their needs and getting optimal output becomes a challenge for the organization. In order to meet this challenge, multinational organizations pursue proactive and prudent human resource policy that suits their organizational needs in era of growth as well as recession to get maximum output with minimum input. Keeping in view all these challenges faced by multinational organizations, this research topic highlights the role of human resource management in recruitment policy, distribution of human resources within the organization, allocation of business to expert, technical and qualified personnel, harmonizing human resource needs with global changes in order to achieve organizational goals. It is also pertinent to mention here that various multinationals, recognizing the importance of human resource management, support research work carrying out in various research institutions.
As far as personal reasons are concerned, this research work will give me a clear-cut understanding towards the functioning of MNCs across the globe, their growth and development, various phases of organizational life cycle and world-wide human resource management policies adopted in order to define HRM role in multinationals.
Objectives Of Study:
The study will address the following three key objectives:
To determine the human resource polices in multinational companies.
To determine the advantages and disadvantages of multinational companies' training programmes and determines which approaches are highly recommendable.
To build theories of effective cross-cultural training programmes for international human resource managers.
Human Resource Management:
Human Resource Management is the organizational function that deals with issues related to people such as reimbursement, hiring, performance management, organization development, wellbeing, benefits, employee motivation, and training.
Human Resource Management (HRM) is the purpose within an institute that focuses on staffing of, management of, and providing direction for the people who work in the organization.
Human Resource Management (HRM) is that specialist function of management which has the prime responsibility for the following:
Formulating, proposing and gaining acceptance for the personnel policies and strategies of the organisation,
Advising and guiding the organisation's managers on the implementation of personnel policies and strategies,
Providing personnel services for the organisations to facilitate the recruitment, motivation and development of sufficient and suitable employees at all levels,
Advising the organisation's managers of the human consequences of change.
Objectives of HRM:
Objectives are pre-determined goals to which individual or group activity in
an organization is directed. Objectives of personnel management are
influenced by organizational objectives and individual and social goals. Organizations are not just satisfied with this goal. Further the goal of most of the organizations is growth and profits.
Institutions procure and manage various resources including human to attain
the specified objectives. Thus, human resources are managed to divert and
utilize their resources towards and for the accomplishment of organizational
objectives. Therefore, basically the objectives of HRM are drawn from and to
contribute to the accomplishment of the organizational objectives. The other
objectives of HRM are to meet the needs, aspirations, values and dignity of
individual employees and having due concern for the socio-economic
problems of the community and the country.
Three Approaches in HRM:
The field of HRM at international level has been divided into three significant approaches. Early approach studies the human behavior within the organization and stresses upon international dimension of cross-cultural human resource management. (Adler, 1997; Phatak, 1997). The second approach evolved from the comparative study of industrial relations and makes a comparison and an analysis of HRM systems being practiced in MNCs across the globe. (Brewster & Hegewisch, 1994). The third approach emphasizes various aspects of HRM in multinational corporations (Dowling, Welch & Schuler, 1999).
This research module revolves around the third approach. Therefore, my focus will remain on the role of HRM in multinationals.
Influence of international competition:
These multinational corporations (MNCs) under the influence of international competition, organizational politics and integration of strategies and policies, transfer HRM policies between headquarters and its subsidiaries across the globe. As Kostova (1999, p.308) put it, "for purposes of synergy and efficiency, organizations often engage in cross-unit transfers of business practices that reflect their core competencies and superior knowledge and that they believe to be a source of competitive advantage". Top management considers the HRM practices and policies one of those sources. It is also pertinent to mention here that the MNCs usually transfer those HR competences that are believed to be sources of their competitive advantage (e.g., Bartlett and Ghoshal, 2000). Importance of this factor may be viewed in light of the fact that there are many nations which are rich in resources but due to the lack of proper management into these resources, all is going futile. Same is the case with organizations and in case of MNC this factor gains more importance as these are transnational bodies.
Organizational life cycle:
MNCs undergo various stages of an organizational life cycle (OLC) of international human resource management (Glinow, 1991). Implications of congruent theory over the various phases of the cycle will be evaluated.
When decisions regarding allocation of business to various staff spread in subsidiaries across the globe in MNC are made, cost assumes a significant role. Cost has also become an important factor when decisions about human resources are made. Based on the concept of transaction cost theory by Williamson (1975, 1985, and 1991) a model of strategic international human resource management is developed that defines the role of the management in the MNCs.
The analysis of the literature related to international human resource management (IHRM) reveals that the trend during the decade of 1980s has been concentrated on the improvement of HRM policies, for example, repatriation, international staffing, cross-cultural training, international compensation. Heenan and Perlmutter (1979) developed the EPRG-profile to explain strategic aspect of IHRM. Since then the focus of IHRM research has turned into more wide-ranging and more perspective oriented.
"The role of HRM practices is to allow for the measurement of unique contributions and to provide adequate rewards for individual employee performance" (Wright, 1992). A multinational corporation that is pursuing policies to utilise all its resources in an efficient manner this means that the international human resource management strategy should be in harmony with the requirements of the nature of work. Therefore, goals of a proactive human resource management strategy can only be achieved if staff have been allocated work that the most suits their competencies.
Thus this research work dwells on role of human resource management in staffing, in allocation of business, in analysis of competencies of human resources matching nature of the work. The role of HRM will be evaluated in the light of factors affecting the transfer of HRM policies and practices in the subsidiaries across the world. HRM in MNCs keeps in view the cross-cultural aspect while making decision about human resource management. While pursuing policies of HR management multinationals make a comprehensive analysis of cost distribution as a result of these policies and make decisions to the best of the organization. This research work also explores the link between international HR management strategies adopted by MNCs and organizational goals.
Cross-Culture Impact in HRM:
The workforce of the 21st century is increasingly diverse and multicultural. To effectively manage and lead in this environment, HR must be knowledgeable about cross-cultural factors on both the domestic and global fronts in human resource management. By promoting education in cross-cultural competencies throughout the organization, HR can better serve the company to successfully achieve its mission and goals.
As a concept and as a reality, culture is broad and multifaceted. On a daily basis, culture influences who we are as individuals, families, communities, professions, industries, organizations and nations and how we interact with each other within and across regional and national borders. Defined as a set of values and beliefs with learned behaviours shared within a particular society, culture provides a sense of identity and belonging. From language, communication styles, history and religion to norms, values, symbolism and ways of being, "culture" is everywhere.
In domestic and global workplace settings, people in organizations reflect their respective cultures. As shifting demographics bring together people of many cultural backgrounds, human resource management (HRM) must be thoughtfully examined and sometimes altered to support organizational goals.
Thus, HR professionals experienced in workplace diversity and cross-cultural communication are well-positioned to develop and implement culturally appropriate HRM strategies, policies and practices. While not exhaustive, my research quarterly focuses on selected cross-cultural factors in HRM in today's workplace and provides insights for HR to better serve the needs of the organization.
Research Questions and Objectives:
Main focus of the study has been the role of HRM in MNCs. In fact, HRM plays wide-ranging and multidimensional role in head offices as well as subsidiaries across the globe. Their role is specific with regard to various sectors of economy, for example, information technology, pharmaceuticals, industries, service sector etc. In order to accomplish the purpose and to remain focussed during the study, following aims and objectives have been defined:
To identify various stages of organizational life cycle of a multinational and explain the role of HRM in each stage.
To evaluate world-wide HRM practices and policies adopted by MNCs.
To evaluate effects of cost on accomplishment of organizational goals while making HRM decisions.
To explore a link between international strategic HRM and their role in MNCs.
In light of above given discussion, following research question has been defined:
What is the role of Human Resource Management in Multinational Corporations in global scenario?
How the internationalization of human resource management has increased the scope of traditional HRM?
Research Planning and Methodology:
While conducting the research, selection of research method becomes of great significance. Research methodology is important in that it decides the direction of the research, determines the path which a researcher follows to accomplish research goals. Selection of research methodology depends on nature of work carrying out, research objectives, research environment etc. Considering all these factors various research methods have been developed. In my case I will concentrate on two research methods, namely, interpretsim and positivism.
In interpretism research methodology, I interpret in the context of my research events occurring around me. In this particular research method I need not to establish relationship between dependent variable.
Through positivism research methodology, on the other hand, I explore a relationship between two or more dependent variables which, in turn, pass through theory building process to arrive at some conclusive theory.
In this research work, I have made an in-depth analysis of my research goals, suitability of various research methods in my research work and nature of research work to reach the most befitting research methodology. So I have adopted positivism as the most suited research method in my case.
After I have established research goals and selected research methodology, I devise ways and means to carry out research. These ways and means reflect research approaches. These approaches determine research plan which a researcher follows to achieve research objectives. The importance of research approach is evident from the fact that it determines the technique by which data is collected and analysed. A researcher seeks its help to interpret research results to arrive at resultant theory.
Keeping in view the research objectives, researchers have identified two types of approaches: qualitative approach and quantitative approach. During research work a researcher may come across a situation where he or she has to determine a qualitative rather than a quantitative relationship between two variables. In such situation qualitative approach towards research is adopted which is affirmative in nature (Saunders et al, 2007).
On the other hand, when a researcher develops a hypothesis and wants to check its validity he or she puts numeric data into an already established and valid theorem and observes its effects on hypothesis. This approach is known as qualitative approach. This approach is used where facts or situations can be expressed in numerical form. But when the facts are related to abstract things and cannot be quantified qualitative approach come to the fore.
In my research topic, I have adopted qualitative approach as the best one. In my research, I aimed to determine the role of the human resource management in a multinational organization. Quantitative approach stresses on the testifying the hypothesis through experimental methods and are mainly used in scientific research. Quantitative approach testifies the hypothesis through experimental methods and is mainly used in scientific research such as, natural sciences. In my research work I have adopted qualitative approach towards role of HRM in multinational organisations.
Research Strategy-- Surveys:
Research strategy is an essential part of research design. It sets the parameters of research approach, devise ways of research and tools employed for research purpose. Research strategy determines the data selection and data collection techniques to achieve organizational goals. In my research work I have adopted positivistic research methodology and qualitative approach. Depending upon this, my one of basic research tools will remain interviews and surveys.
Data Collection method:
Reliable data collection provides a foundation on which result-oriented research can be conducted. Unreliable and deficient data causes unreliable results that are inconsistent with research objectives. There are two types of data: Primary data and Secondary data. The former type, data is always specific to the point and is for the specific purpose of study. Its collection techniques are consistent with the aims and objectives of the research. On the other hand, in the letter type, data collection is initially made for the purpose other than the study. Electronic data bases, statistical reports, libraries searches, journals, books, etc. are some examples of secondary data sources.
For executing this research, my main focus will remain on primary data collection through surveys. However, secondary data collection will also be used, where required.
Strengths of the Methodology:
The accuracy and reliability of results of a research primarily depends upon the research methodology adopted. Burks, 2001 defines the research methodology as the lens through which an individual can see the truth behind the dust of suspicion and the world of what and why goes out of question.
Selection of true research methodology produces accurate, precise and reliable results.
In this research work, qualitative research approach has been adopted and executed through survey which is carried out through questionnaire prepared for this specific research. The latest knowledge and stress on primary data collection make this research study reliable and confidant.
Limitation of the methodology:
There is no research methodology without limitations. In this research methodology too, the researcher has to face certain limitations like accessibility to the executives of the MNCs and their employees with their permission. In practice there are a number of HRM practices, all of which are not possible to accommodate and only model practices will be discussed.
As my research topic focuses on role of HRM in multinational, no ethical issues involves during research study is apparent, however, if during the course of the study any ethical issue arises, the same will be dealt in accordance with the best practices of research.
Timetable and any special resources required:
Include a Gantt chart.
Alert me to any particular problems you are likely to face.
Read methodology literature
Update literature read
Draft to supervisors