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The growing internationalism of economic activity means there is an increasing need for specialists to manage people across borders and continents. Global business poses a specific set of challenges not only for large firms, but also smaller enterprises that adopt international strategy at an early phase of development.
Today, Human Resource Managers have to prepare different strategies for gaining the appropriate talent in the organization due to a great impact for globalization and international competition. According to the HR managers, there should be a suitable strategy at the start of the recruitment and selection process, especially in the international market. Also, firms differ in the extent to which they participate in global competition categorized as domestic, international, multinational, and transnational, depending on the level to which they participate in global competition. So, understanding the differences across these categories is helpful to understanding the role of human resources in global competition and the need for human resource management systems commensurate with the rigors of global competition.
Cultural differences form the background of International HRM making it mandatory that this cosmopolitan quality is dealt with by maintaining good communication between all departments of an organization worldwide. This involves developing a wide range of competences as employees work across boundaries and may differ at all levels-not just politically or culturally- but also as there may be expatriates who relocate after a long time interval & face adjustment problems on repatriation or there are people involved in high level co-ordination who are constantly on the move. Good consulting mechanisms and due attention given to special requirements for pay & benefits help smooth flow of management across borders. Apart from this, it is very important that the selection and recruitment of people is handled carefully as it forms the basis of the transaction.
The various features of HRM domestically or internationally include:-
It is pervasive in nature as it is present in all enterprises.
Its focus is on results rather than on rules.
It tries to help employees develop their potential fully.
It encourages employees to give their best to the organization.
It is all about people at work, both as individuals and groups.
It tries to put people on assigned jobs in order to produce good result.
Human Resources Outsourcing
Handling routine workforce inquiries and functions for people dispersed across the globe can be time-consuming for the human resources (HR) staff of any organization. There are organizations that help companies identify the technology solutions that will facilitate optimal utilization of resources and achieve seamless integration of global HR data for effective decision-making, and allow staff to concentrate on core HR activities. They offer a gamut of services catering to the entire HR value chain that support HR operations from recruitment to exit management.
This study will be comparing the HR strategies used in an US (Organization A) and an Indian (Organization B) multinational organizations dealing in the Real Estate Sector. In order to avoid any controversy, the researcher will not mention the names of the organizations in the dissertation.
A multinational corporation is a business concern with operations in more than one country. These operations outside the company's home country may be linked to the parent by merger, operated as subsidiaries, or have considerable autonomy.
Organization A is one of the largest and most respected commercial real estate services and investment companies in the world with its head office located in Northbrook, Illinois. Their 6,000 professionals in more than 100 company-owned and affiliate offices draw from a unique platform of real estate services, practice groups and investment products to deliver comprehensive, integrated solutions to real estate owners, tenants and investors. The firm's transaction, management, consulting and investment services are supported by highly regarded proprietary market research and extensive local expertise. Through its investment subsidiaries, the company is a leading sponsor of real estate investment programs that provide individuals and institutions the opportunity to invest in a broad range of real estate investment vehicles, including public non-traded real estate investment trusts (REITs), mutual funds and other real estate investment funds.
Organization B was established in 2000 and within a short span has grown into one of the leading Indian business houses with its companies being listed on Indian and overseas financial markets having a combined net worth in excess of Rs. 18,000 crores. It diversified in to lending and credit services. In 2005, it forayed in to Real Estate with the purchase of mill lands in Central Mumbai. In 2007, building on its capabilities of successfully executing large and complex projects the group diversified into Power. All along its journey, it has successfully delivered value for its customers, partners and shareholders by way of superior products , services and timely execution. The organization has four main listed companies which are financial services, real estate, power and securities.
Justification of the Study
This study focuses on identifying the main tasks associated with IHRM and explains the importance of the cultural context for HRM. It also highlights the link between IHRM and the different organizational and management structures adopted by large multinational businesses as there is a growing concern with the degree to which IHRM is shaped by the international business environment.
This research highlights several selected challenges in global talent management, and several drivers of those challenges and highlights the potential role of IHRM activities in addressing those selected challenges.
Research Objectives, Research Questions and Research Hypotheses
The following are the objectives of this study:-
To understand the different ideas involved in the International Human Resource Management in terms of recruitment and selection.
To elaborate the strategies involved in the HR process.
To compare the different HR strategies used in U.S.A and India including their effectiveness in most of their organizations.
Based on the above objectives, the following research questions/ problems are raised:-
What are the differences of HRM in the domestic organization and the international organization?
How the HR strategies, recruitment and selection guarantee the right acquisition of human talent?
Are the HR strategies followed in the US are more effective than the strategies in India?
Based on the above research questions, the following research hypotheses are proposed:-
There are significant differences in the domestic and international HRM strategies that make IHRM a more complex process.
Since IHRM involves more intricacy and careful procedure, it leads to more appropriate recruitment and selection of people.
HR strategies are more extensively used in the US in most professional organizations compared to India.
3. Literature Review of the Dissertation
The primary cause of failure in multinational ventures stem from a lack of understanding of the essential differences in managing human resources in foreign environments (Desatnick & Bennett 1978). The world has become more globalized, competitive, dynamic and uncertain than ever before. As more and more firms operate internationally, the search for the elements of global competitive advantage is a prominent theme in the management literature (Dickman & Müller-Camen, 2006). There is a clear need to develop an understanding of how to compete successfully on the global playing field. A major component of this understanding appears to be the field of human resource management and, in particular, the field of international human resource management (Schuler, et al., 1993). The effective management of human resources in an international context is increasingly seen as a key source of competitive advantage in international business; and the quality of management seems to be even more critical in international than in domestic operations (Monks, et al., 2001). Some of the major debates are concerned with the development of models and concepts of strategic international human resource management (Schuler & Tariq 2007) and the question whether successful domestic HR strategies can be applied in a global context (Schuler & Jackson, 2007).
The subject matter of IHRM is covered under three headings which are as follows:
A key factor in the increasing internationalization of employment is that there are cultural differences between nations, national values and attitudes. This affects the way people organize, conduct and manage work.
An awareness of cultural differences is an essential part of an International HR manager's brief. The recruitment and selection activity of HR may be affected by cultural values and practices in the respective host countries. As such, care must be taken when deciding to adopt standardized HR policies and practices throughout the world.
Comparative Human Resource Management
CHRM distinctly explores the extent to which HRM differs between different countries or occasionally between different areas within a country or different regions of the world such as North America, the Pacific Rim states or Europe (Brewster & Larsen, 2000). The countries may differ in size, regional differences, include no of language groups or differ in economical development. They may have different labor markets and education systems, different employment laws and trade unions and different cultural expectations. Therefore, employment systems differ noticeably between countries and managing Human Resources has to vary for different countries.
International Human Resource Management
IHRM examines the way in which international organizations manage their human resources across different national contexts which adds extra complexity to the management people beyond that found in a purely national setting. The organization that manages people in different institutional, legal and cultural circumstances has to be aware of what is allowed in the different nations and regions of the world and make cost effective management practices accordingly. For eg. a performance appraisal system which depends on US style openness between manager and subordinate, how they have fared in their job may work in some European countries. But it is unlikely to fit with the greater hierarchical assumptions and 'loss of face' fears of some Pacific countries. The literature is replete with examples of home country practices which are allowed in other countries but which depress rather than improve productivity and effectiveness.
IHRM, therefore, explores how MNC's manage the demands of ensuring that the organization has an international coherence in and cost effective approach to the way it manages its people in all the countries it covers while seeing that it is responsive to the differences in the assumptions.
Figure 1. Enduring Context of IHRM
This research study will use induction approach as the data collected will be used to arrive at certain general conclusions. Interviews, questionnaires and other data collecting techniques will enable to create a general awareness of the current happenings and nature of problems being addressed by the research. Inductive research would be more appropriate with a small sample of subjects. Most inductive researches are conducted on qualitative data through a variety of data collecting methods to establish different views of a phenomenon (Smith, Thorpe and Lowe, 2002).
In this study, qualitative techniques will be the main approach taken to solicit data from the field. However, use of quantitative data will ensure a balance between various variables and conceptualization of the available statistical figures. Adoption of qualitative methods will help in increasing understandability of the specific situation as it mostly will involve non-numerical information such as experiences, opinions, feelings and knowledge of various respondents.
The survey method will help in collecting both primary and secondary information more systematically and such data will be collected from a sample of respondents. Use of in-depth interview technique among selected respondents will enable in gaining valuable insights with a degree of intensity.
Research Design Framework
Following is the framework design (Sekaran, 2003) which will be used while doing the research.
Details of Study Measurement
Purpose of the study
Studying events as they normally occur
Manipulation and/or control and/or simulation
Goodness of data
to be studied)
Research Design Framework (Source: Sekaran,2003)
To start with, the purpose of this study is concerned with the descriptive studies to describe the characteristics of the variables of interest.
Type of investigation is causal study where a definite cause - effect relationship is required while co-relational investigation is to describe the important variables that are associated with a problem.
In this research, the study is conducted in non-contrived setting known as field studies as the background of the organization and expatriates and the experience of the respondents are already known before the survey is conducted.
The research will use Sampling Design to study a population and draw meaningful conclusions about the population by selecting a smaller group of individuals from within the same population to represent the entire population.
Conducting survey by questionnaires in person or e-mail will be the main method for data collection since it is the most convenient for gathering the data. In addition, direct phone calls and if possible, interviews will also be conducted to support the gathered information.
Finally, data analysis will be done using SPSS software on the basis of which recommendations as well as conclusions will be suggested.
Most of the data and information for this dissertation will be mostly collected from primary sources such as people who have the authority to give information. The data for the survey will be gathered by administrating questionnaires to the employees of the chosen MNC and by conducting interviews of the managers and expatriates so that data can be more precise, pragmatic and reliable for the study.
Outline of the Dissertation
Chapter. 1 - It will consist of the introduction to the research by giving informational background and description of the project. In general, it will provide an overview of the dissertation. It will also include a brief description of the chosen US and Indian organizations used for the study.
Chapter. 2 - This section will contain the literature review to support the research. Various philosophies and frameworks in International Human Resource Management pioneered by different contributors will be described in detail. Based on the explanations and comparisons of the philosophies and frameworks, critical factors contributing to the recruitment and selection of employees are identified.
Chapter. 3 - This part will explain the research methodology of the study and a detailed explanation of the chosen research design framework.
Chapter. 4 - This chapter deals with the data collection, findings and the analysis. It provides the discussion on the result of data collected from the survey and questionnaires.
Chapter. 5 - This chapter proposes some recommendations and suggestions to improve the recruitment and staffing procedures based on the data analysis. It also defines the practical contribution made by this research and assumes if the research can be implemented for other organizations with similar situations as described in this study.
Schedule of Dissertation
December 6th - December 11th : Research Proposal
December 12th - December 25th : Introduction
December 26th - January 15th : Literature Review
January 16th - January 22nd : Preparing questionnaires
January 23rd - February 15th : Conducting surveys
February 16th - March 5th : Research Methodology, Data collection and Analysis
March 6th - March 14th : Recommendation and Conclusion
March 15th - March 20th : Complete 1st draft
March 21st - March 26th : Preparing for printing and binding
March 27th - March 30th : Submission