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With the advent of globalization, organizations whether big or small that emerged as being local have showed their stand globally. This has given rise to the diversity in the manpower and the cultural sensitiveness has emerged to a great extent. This has been a leading factor to the rise of International Human Resource Management.
Broadly the definition of international human resource management (IHRM) has the following objectives i.e. to procure, allocate, and effectively utilize human resources in a multinational corporation. The work of international HR manager is easily managed if MNC just exports its products to few of its small offices in foreign locations where as in globalized firms HR managers have to tackle two objectives which are conflicting in their strategies to some extent. Firstly integrating the human resource policies and exercises among its subsidiaries in different countries with the aim to meet or achieve the corporate objective. Apart from this the approach to HRM has to be made flexible enough leaving sufficient difference between the various types of HR practices and policies that may prove efficient in dealing with dissimilar business and cultural settings.
The primary function that International Human Resource Management enforces is in regards of holding an international feel with a local touch in the host country. The challenge lies in illustrating an international / multinational company that would not prefer to be addressed local, however at the same time desiring a domestic touch in the host country.
The Human resources Management plays role here by ensuring that HRM policies are in accordance and promoting the firm's objective, structure and control. Talking of structures and controls the following key points play an important role and thus are worth mentioning in the context of International HRM.
Decision Making: In International strategy centralized dependency of core competency and the rest decentralized compared to less degree of centralization in operating decision making.
Co-ordination: The degree of coordination essential in rousing the cross cultural sensitivities is required to be very high. Also there is a requirement for cultural control to a great extent.
Integrating Mechanisms: Integrating mechanisms also need to be operated at the same time.
Objective if International Human Resource Management
The objectives of International HRM can be listed as the following: (Management Study Guide, 2012)
Making a local image parallel with maintaining a global identity.
Bringing forth awareness about cross cultural sensitivities within managers internationally and staff hiring covering all geographic boundaries.
Training about cultures and sensitivities of the host country.
Implementation of International Human Resource Management
In Staffing Policy in international human resource the part of hiring individuals having required skills for doing a particular task is not different. The challenge faced is mainly the development of tools promoting corporate culture which is mostly same everywhere except for the local sensitivities which are of due concern.
The decision management at top management or key positions level gets very difficult as there is a conflict of views in choosing between a local from the host country and one from the headquarters for a key position assuming needs of sincerity; and finally giving decision in support of whether to observe a uniform hiring policy at all levels poses to be a tough challenge.
The decision of hiring by an organization may be in accordance with any of the staffing policies listed below:
Ethnocentric: The important management positions are held managed by the parent country individuals.
Polycentric: This staffing policy basically have the host country nationals managing subsidiaries whereas the parent company nationals mainly held the headquarter positions.
Geocentric: This staffing policy concentrates on the most competent and the best individuals and has them holding the important positions regardless of the nationalities.
Real Life Case of International Resource Management
In the International HRM Case Study by Fiona L. Robson has mentioned about Brunt Hotels, PLC Group of Hotels. The organization had owned hotels only in UK before and not outside it and so it hired a team of management consultants who worked independently in order to guide them with the proceedings for the objective of setting up new hotels in France. The consultants were provided the following information by the company to carry on with a purpose to solve the issue:
Majority of their existing managers wanted to have a chance to work abroad.
However they didn't have any manager who was able to speak French fluently.
The time given for rebranding the hotel was four weeks. The new hotels must be completely ready to be opened after that time.
The organization had the expectations for recruitment of a large number new staff for the new French hotels, as they more than 70 percent of their employee strength reduced.
Also they had to have flexible managers to be able to move between countries in cases of any conflict resolving.
Need of International Human Resource Management
The employees in multinational organizations may be home country nationals, impetrates third country nationals, host country nationals or expatriates. The question arises here is whether a Host country national or expatriate will be good for the organization. The answer can be judged based on these basic questions, Do they have the expertise for the position? Are they willing to work on any project for the organization?
The understanding of different cultures is an important and critical aspect for the achievement of successful acquisitions and mergers in international business. A mixed company will be lacking the growth or advancement it expects by streamlining existing operations if it lacks proper knowledge of the cultures involved of the diverse nature, however it will experience uneconomical disarray and unfeasible, harmful conflict. And on the far side international mergers and acquisitions have potential negative outcomes which may give rise to several different business situations-at home or abroad-where society interactions doesn't seem to be supported by cultural awareness coaching and proactive designing, including for the hyperbolic awareness of one's own culture and its impact on others from completely different cultural backgrounds
Responsibilities of International Human Resource management
The topic mainly incorporates the expatriate official who is sent to work in different nation to serve the organization. There are various driving factors as well for assigning expatriates to work which mainly include conveying the local needs/strategic data to headquarters, organizing and controlling operations activities with vast dispersion and managers acquire international skills. The expatriate success factors can be listed as willingness to accept position, motivation, family situation, language skills, relational abilities, professional/technical competence.
However there are various reasons for the failure of an expatriate in a multinational organization such as level of responsibilities, manager fails to adapt, lack of technical proficiency, other problems within the family, personality of the manager, no motivation for assignment, spouse fails to adapt etc...
Imagine you are sending one of your staff to China to set up a new branch of your organization. The staff is married with two children, aged 8 and 12. Describe the kind of training you will provide to enable the staff settle and perform effectively in a country he/she has never been before. Then following type of trainings must be provided keeping in the mind following objective:
The training is performed to fulfill the objective that covers developing comfort with business culture, social institutions and host country national culture
Low level Training
Video on local Culture
Company operations briefings
Company operation details
Reading background lectures
High Level Training
Extended language training
Interactions with host country nationals
Field trips to host nationals
Cross-cultural training efforts are guided by three key priorities as an aide in helping to bridge the cross-cultural divide thus supporting future success in business operations
Sense of Belonging: It'll be vital to transcend national variations and target common work goals and objectives, as well as having a transparent understanding of mutual edges gained through collaboration and reciprocally. A Chinese manager operating for a British firm in Kingdom of Sweden, despite the multiple national cultures, can still feels a part of the corporate team. For western managers, training on the Chinese thought of guanxi, or relationships during a network of contacts connected by variable degrees of mutual obligation, will facilitate cause bigger influence inside and between organizations, with less of a way of isolation and dealing during a vacuum.
Moral Foundation Commonalities: Similarities in faith and basic ethical principles between east and west will outweigh variations. Footing will be found within the would like for harmony created by a collection of ethical rules and therefore they would like for a conscience to guide the individual and parts of mutual obligation. By accentuation these common ethical foundation wants, society coaching help develop a standard bond for the structure relationship.
Language: variations in language will produce alternative ways of staring at the planet. The Chinese language is descriptive in its written type. Within the west, the tendency is toward bigger exactitude in defining meanings. In society settings, this exactitude will limit abstract thought flexibility. Training conjointly ought to be custom-made to bear in mind of wherever language issues may occur. In Poland, former U.S. President Chief Executive apparently once said that he "desired the Poles carnally". Language difficulties may return from poor translation or a mistake within the selection of associate degree formulation phrase. More seriously, language could be a supply of failure to speak a crucial thought or conceptual method. Coaching will be terribly helpful in nonverbal communications and intuition, involving the utilization of a way broader set of data cues within the communication method.
Roles OF International Human Resource Management
In case of migration of employees internationally HRM have to play an important role. In comparison to domestic human resource management, IHRM involves a much wider perspective on the most viable HR activities. Although this is restricted for HR managers operating from a MNC's headquarters (HQ), the variety and number of IHRM activities are intimidating. International HR managers have a great role dealing issues varied from international taxation; selecting, training and appraising local and international employees; international relocation and orientation; various other administrative services for expatriates and managing relations with host governments in a number of countries around the world.
A particular human resource function area such as compensation when dealt with, the international HR manager has to consider a great diverseness in national and international pay regarding issues. For example, the headquarter based human resource manager has to coordinate with pay systems of different countries to deal with pay issues having different currencies that are easily subjected to change depending on the market in relative value to one another from time to time. An American expat living in Tokyo who obtains a salary of $100,000 may experience that the buying power of the salary he is receiving has dramatically decreased if the Japanese currency yen tones up in value relative to the US dollar. As per statistics a US dollar calculated to about 248 yen in 1985, but decreased to a lesser value of about 110 yen in 2000.
The perks provided to host company employees may lead to development of some interesting complications. Taking instance of the United States which has a provision of providing health insurance benefits to its employees and the employee's family which includes spouse and children under the benefits, however as per some countries understanding of the word "family" may include an extended group of relatives- grandparents, parents, nieces aunts, nephews, uncles, and multiple spouses. The issue here is that How does the firm's benefit plan cope up with these diverse definitions of family and their related activities or benefits?
IHRM's has a broader scope aspect that is headquarter based manager should plan a strong and efficient way to deal out with employee groups possessing different cultural backgrounds. The headquarter manager must plan out procedures, use established policies towards managing expatriates from the host-country nationals (HCNs), firm's home country (parent country nationals, PNCs), including third country nationals (TCNs, e.g. a British manager working for an American MNC in the firm's French subsidiary) in other subsidiaries of the world.
IHRM therefore is very intriguing front that offer apt challenges in HRM. IHRM means working across national boundaries to formulate and implement strategic, policies and practices which can be applied to an international workplace. IHRM focuses on the managerial responses, requirement for MNE, looking at forces for change and current global work environment that have implications for the way in which people are being managed in multinationals. The main effort lies in striking the right chord that lead to design structures and controls. IHRM also plays an important role in holding subsidiaries together globally also facilitating different subsidiaries in serving functionalities for operations to perform coherently whenever it is required.