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International Human resource management

 

 

International Human Resource Management

 

Introduction

With the steady pace in globalization today, the business market is well-connected the to the world. Companies move from domestic transactions to cross-border transactions because of globalization. Due to this globalization and with the ease of mobility and communications between countries, organizations are now able to operate at a global level. A successful and efficient working of any organization or business requires a collective effort from among all the function of the organization. Of the other things, workers are one of the most critical aspects of this process, which ensures that the human capital or the company's staff is be employed effectively to accomplish corporate goals. With times of change and with changing business dynamics, human resources management has been an important function for all businesses and organizations (Brewster et al. 2016). Companies with operations across different regions need to formulate their management strategies in conjunction with the working style and employee needs and demands of that particular region. Such organizations develop and employ international human resource management strategies to fulfil this requirement. The paper provides an outline of the principles of international hiring and recruiting and the significance for organisations that work in different regions of the world in creating an effective foreign human resource management program.

Review of literature

Global human resources management in basic terms can be defined as a set of operations or procedures for the usage, across domestic boundaries and at regional or global level, of human resource management techniques of an organization. These international strategies to manage the human resources strive to meet organizational objectives. They help enterprises at the national and international level to achieve competitive advantage.

Budhwar (2016), discusses the application of the techniques and practices of multinational human resources administration. It often covers programs for prospective and existing expatriate employees, businesses working in domestic and foreign countries, with immigration facilities required. It can also be explained as a strategic process where the human resources are procured, allocated, effectively and efficiently utilized in a multinational company. Managing the international human resource becomes easier when a company simply exports its products to a foreign location with some small operations. Management of international human resource is a broad concept which essentially involves several concepts of personnel management. The process of management of international human resource comprises of similar activities as that of management of human resources nationally like planning, recruiting, staffing, and so on. Management of human resource nationally is operated in one nation and international human resource management activities are operated in different countries and across different regions. It comprises of essential functions of human resource management such as recruitment, selection, training and development, performance evaluation and dismissal on a global basis. It also covers other tasks such as regional manager of expertise, ex-pats control, and so on (Rees & Smith, 2017). The multinational human resources administration method involves the supervision and care of the three categories of staff in the following overseas offices:

  • Employees of the domestic country – features workers live in or employed in a corporation's domestic operational country, such as an American hiring a business based in America by an American company.
  • Employees of the host country − these include employees residing in, for example, an American employee working in some foreign country in the country in which the subsidiary's company is located.
  • Employees of third-country – these include employees who do not but are employed at the additional or the company's headquarters in domestic countries or host countries. For instance, an American MNC that works in the United States may hire the manager of that division, a French citizen, who is, therefore, an employee of a third country.

Human resource management in the nation is fairly simple because the global world has less effect on its activity. International management of human resources is complicated comparatively because the cultural differences, institutional factors and other external factors have a significant impact (Kang & Shen, 2013).

  • Importance of international human resource management:

Globalization has an impact on the national and international operations of a firm. Organizations will respond continuously to rising global homogenisation. As a result of this expansion, the standardization of practices and working processes of these companies is important. They can entail adjusting the human resources strategy approaches and exert power (Brewster et al. 2016). Companies when operating across international boundaries one of the major tasks for such companies is to address and manage the dissimilarities of employee work style due to cultural clash and to integrate its strategies effectively in that region.

  • Functions and roles of international human resource management

The foreign management of human capital has been interrelated according to Budhwar (2016) with three aspects: human-resource operation, employee styles and the different regions through which an enterprise works. Global human resources administration differs from domestic human resources management and the nuances of such factors.

Human Resources include are all the people that work collectively or in one capacity and contribute to attaining the common aim of the growth of a business. Employee management is thus described as a strategic strategy to efficiently manage employees in an organization so that they contribute to a competitive advantage (Rees & Smith, 2017). International management of human resources may also be defined as hierarchical processes for controlling an organization's workers across any of the regions where it operates.

Staffing is a process of recruiting the right personnel who are responsible for the organization’s growth. That function means that the organization still has the best employees in the right place. Staffing is in simple terms finding, choosing or selecting, and appointing or placing good and efficient employees to achieve the organisation's strategic goals (Wood, Cookee & Demirbag, 2018). Due, to dynamic changes in the business environment staffing, has become difficult for organizations. In other countries, it becomes harder to implement this because of conflicts of cultures and other factors compared to home countries. The companies have a challenge in deciding on the combination of local workers, home country staff and even third-country individuals that are most effective in achieving organisation. According to Reiche et al. (2017), the expense is a significant consideration in staffing a foreign activity.

The main purpose for any companies, domestic or foreign, is to recruit and then retain employees in roles that they successfully work. Recruitment is the hunt for and recruitment of prospects and applicants in appropriate quantities to allow the organisation's efficiency to be maximised. Selection requires the method of gathering details for the selection and decision of which applicants, in particular, are to be selected. Recruitment and selection are separate processes and if the company manages its staffing process, they need to operate efficiently. After selection and appointing the appropriate personnel for a company the human resource management team also provides induction and orientation to the employees (Bratton & Gold, 2017). International management of human resources also involves the education of employees for development and growth. Some of international human resource management roles suggested by Tung (2016) are building commitment of the senior leadership, training managers, monitoring HR processes, supervision and management of the implementation of global values and systems, to ensure these leaders are well equipped and have the expertise to deal with global challenges, building strong internal and external networks, keeping abreast with latest trends and developments, and mobilizing resources to staff project teams effectively.

  • Factors contributing to the development of management of human resource internationally

The need to establish a foreign human resources management program is motivated by four considerations. Comprehension is important because a global company's human resources activities differ from a domestic company. These factors cover cultural diversity, diversity of employees, diversity of languages and economic diversity (Reiche et al. 2017)

Issues related to employee dissatisfaction are more commonly observed in the business industry nowadays. Organizations raising the number of domestic employees commuting for long stretches to overseas locations (Colling, Wood & Szamosi, 2019). Such workers typically experience poor success levels as staff in many countries are segregated culturally. The transfer of the human resources administration activities to its clients regulates global corporations through foreign branches. The companies need to devise human resource policies which help in global integration and also adapt to the local pressures (Reiche et al. 2017). Management of human resource internationally has an integral function to develop a stable and cohesive configuration or system of interrelated activities by considering different social, cultural and economic factors. It aims to establish consistent organizational or human resources management strategies, enabling the company processes to be streamlined and job efficiency to be maximized. When a firm shifts business patterns from one country to another, national patterns conflict, and it may not be easy to combine employee relations (Kang & Shen, 2013).

BMW is an indicator of the value of the multinational company handling human capital effectively and efficiently. German car manufacturing company, BMW, had set up one of its subsidiary office in the United Kingdom (Chiang et al. 2017). Initially, this business offered United Kingdom workers long-term shares and security of the jobs. The business did not, therefore, grasp the cultural variations of the workers in the manufacturing unit of the United Kingdom. Due to this failure, BMW witnessed resistance from employees. This turmoil led to intense conflicts between the employees of the company and the company management.

The above scenario helps to explain the need to establish and enforce multinational strategic management of human capital for its cross-border activities to maintain accurate and productive control of human resources to meet their ultimate objective and gain comparative advantages. A huge multinational market network and foreign expertise exists for certain companies such as IBM, Procter & Gamble, Pepsi and Coca Cola. The success of such companies can be explained by their capability and efficiency of focusing on recruiting the right people at the right place (Saheem, Festing & Darwish, 2016). These companies have enabled the diffusion of information and creativity. They have also been successful, productive and acknowledged the need to continually recognise and grow talents internationally.

Conclusion

The rapid growth in industrialisation and globalization organizations now operate across many regions on the globe along with their home countries. The international influence on their work cannot be ignored by the managers of the Human Resource of these organisations. Thus, such companies need to develop management strategies to suit the diversities of the region in which they operate. The essential aspect of developing effective and efficient strategies is the implementation of successful human resource management techniques. International human resource management means the implementation at a global and international level of human resource practices and strategies to adapt to the work style and diversity of the region in which the companies work. By offering a response to multinational market challenges, foreign human resources administration plays a big part. International management of human resources has functional as well as strategic similarities to domestic management of human resources.

This entails much the same practices as household management, such as recruiting, procurement, monitoring of results, pay, preparation, and interactions with the labour force. It is closely connected with the company's business strategy. Domestic human resources management focuses on the control at the national level of the small range of human resources management operations and the execution of external acts such as expatriate management at the international human resources management stage.

Recommendations

Due to technological growth and advancement in globalization the business world has shown rapid growth. Industries have switched from domestic activities into emerging border crossing opportunities to raise their market share and market capitalisation.

The human resource is progressively is an integral part and directly responsible for the success of an organization. Organizations must reform their conventional management approaches in the modern environment. Multi-National Companies will provide a good multinational management framework for human capital. Companies with its operations in other countries often face the pressure of global integration. Businesses must change their business practices and processes to adapt to these global disparities. Such multi-National companies are also opposed by the adjustments and discrepancies by their workers. In comparison, workers of international corporations located outside their country have to frequently deal with the culture shock. These aspects also affect the efficiency of workers and impact their way of working by building hurdles for them to develop a competitive advantage for their firms. There are also important facets of the human resource management role for these organizations to construct and improve foreign human resources programs (Saheem, Festing & Darwish, 2016).

Also, the organizations and human resource managers should identify and understand the differences in the variety of factors that impact the operation of employees and management strategies of human resource. The ethnic diversity, demographic diversity, linguistic diversity, and economic diversity is important to be addressed which is advocated by the organisations (Rees & Smith, 2017).

In a global setting, though, administrators of human resources ought to accomplish two competitive goals quite contradictory. First, the convergence of policies and procedures on human capital through a variety of branches through countries is important to achieve overall organizational objectives (Chiang et al. 2017). At the very same time, the human resource management strategy must be robust enough to permit substantial variations in the form of human resource policies and practices which are most successful in different market and cultural circles. This flexibility can be achieved by encouraging the employs to express their views, opinions and problems about a certain policy and then altering that policy keeping these views of the employee in mind. For organizations from a global standpoint of human capital, it is advised that individuals from varied backgrounds have an appropriate understanding of multiple traditions, motivational forces and how they are expressed in their framework. Diversity of various types in a multinational firm implies that the human resource management practices should be tailored and customized to suit the local conditions.

The fundamental implication of addressing this diversity is that the same set of human resource practices is not appropriate for every culture, and companies need to consider developing practices in human resource management with the cultural features of the countries. The variety of workers means that various groups of employees have their abilities and know-how as well as personalities, willingness to work or not to work, emotions or other personal assets. Management of such with pre-formulated management of human resource practices may not be efficient and effective but a more focused and holistic approach which understands the differences and employee views needs to be adopted and developed so that formulated human resource management practices become tailor-made.

 

 

References

Brewster, C., Houldsworth, E., Sparrow, P & Vernon. G. (2016). International resource management. London: The Charted Institute of Personnel and Development.

Budhwar, P.S. (2016). International resource management. Retrieved from: https://www.elgaronline.com/view/nlm-book/9781783475452/C170.xml?

Chiang, F.F., Lemanski, M.K. &Birtch, T.A. (2017). The transfer and diffusion of HRM practices within MNCs: lessons learned and future directions. International Journal of Human Resource Management, 28 (1), 234-258.

Colling, D. G., Wood, G. T., & Szamosi, T. (2019). Human resource management: a critical approach. New York: Routledge

Kang, H & Shen, J. (2013). International recruitment and selection practices of South Korean multinationals in ChinaThe International Journal of Human Resource Management, 24 (17), 3325-3342. 

Reiche, S.B., Stahl, G.K., Mendehall, M. & Oddu, G. R. (2017). Reading and cases in international human resource management. London: Routledge

Rees, G. & Smith, P. (2017). Strategic human resource management: an international perspective. London: Sage Publications.

Saheem, W.H., Festing, M.  & Darwish, T. (2016). International human resource management in the Arab Gulf states – an institutional perspective. The International Journal of Human Resource Management, 28(18), 2684-2712.

Tung, R. L. (2016). New perspectives on human resource management in the global context. Journal of World Business, 51 (1), 142-152.

Wood, G., Cookee, F.L., & Demirbag, M. (2018). International journal of human resource management (IJHRM) special issue on International human resource management in contexts of high uncertainties. The International Journal of Human Resource Management, 29 (7), 1365-1373.

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