Internationalization of Businesses - Case Study Example

? Multinationals and the Role of Expatriates Multinationals and the Role of Expatriates Critical analysis of theory and research: Globalization of markets has been an exponential phenomena coupled with intricacies revolving around the increased space of business growth. Internationalization of businesses has placed immense pressure on local businesses and organizations to expand their operations across the globe for effective competition. Multinational organizations have been faced with different difficulties and challenges in establishing their operations in foreign markets more so on human resource management (Richardson & Mckenna, 2006). There are several cultural dimensions theories like the one developed by Geert Hofstede which presents a framework for communication which is cuts across cultures. This theory describes how the culture of a society affects the values of its members and in turn how they affect people’s behavior making use of a structure obtained from the factor analysis method. This theory is especially important in various fields as a research paradigm (Stone, 2007). These fields include international management, cross-cultural psychology, as well as cross-cultural communication. Dimensions of national cultures are very important in expatriate management and their preparedness to interact with a different culture. These dimensions include uncertainty avoidance index, individualism as opposed to collectivism, power distance index, indulgence or restraint, long-term orientation, and masculinity as opposed to femininity. It is of great importance for the person going to work in another country to be aware of the cultural differences that exist among various destinations. Cultural differences are considered in most instances as a means of conflict rather than synergy. Hofstede’s cultural dimensions theory looks at the increasing diversity and the way in which an expatriate can gain an understanding of the other culture by knowing what they can expect from them and the manner in which they can behave when faced with people of other countries. Hofstede’s model of five dimensions is used widely in various domains of the social life of human beings with most application in the area of business. In the area of business, cultural sensitivity should be promoted in order to enable people to be more effective when working with and interacting with people of other countries in order to ensure success of transactions. In business, communication is taken as one of the most basic concerns. Therefore, this model is important in taking peaks into other cultures. This is especially so because the professionals who work on an international level are bound to interact on a daily basis with others from different countries in their company or with other companies which are abroad. This awareness of the differences in culture will help the expatriate to differentiate between the acceptable and unacceptable as such parameters differ from one country to another. Expatriates might be faced with the challenge in communication which is affected by cultural dimensions such as verbal communication, non-verbal communication, written communication or even etiquette which involves the do’s and don’ts. Despite Hofstede’s model being generally acknowledged as the framework of national values and cultures that is the most comprehensive, by the people who study culture of businesses, it has also been extensively criticized. Another model of cultural dimensions is the one developed by Fons Trompenaars whose experience with cultural differences was quite firsthand as he grew up speaking both Dutch and French and has worked in nine different countries with Shell (Stone, 2007). Through this, he was able to study how people resolved cross-cultural dilemmas in specific countries. It is after his analysis that he made notice of seven basic cultural dimensions. The first scale was universalism as opposed to particularism. The second scale entailed individualism versus collectivism. The third scale pitted neutral cultures against emotional dealings in business while the fourth scale looked at specific behavior versus diffuse behavior. Scale 5 involved achievement-oriented attitudes versus ascription orientation. The sixth scale measured internalistic versus externalistic attitudes and tendencies. The last scale looked at the aspect of time whether sequential or synchronic in cultural dimensions. Trompenaars in looking at these contrasting viewpoints proposed a sense of reconciliation in dealing with the different cultures. These suggestions made his theory to be criticized a lot. They include choosing to ignore other cultures, abandoning one’s standpoint, compromise, as well as reconciliation, all of which some scholars argue that they lack practicability (Stone, 2007). Multinationals and the role of Expatriates: Expatriates are faced with different challenges on foreign land ranging from language barriers, legal, social, and political infrastructure. However, amidst all the challenges that face expatriates from across the globe they are expected to steer an organization’s success within the global market (Enderwick & Hodgson, 1993). The managers are expected to overcome the difficulties and devise means and strategies of propelling a company’s activity with the aim of capturing a broader market as well as increasing organization’s profitability. Nevertheless, the organization has a huge role to play in the transitioning phase of expatriate managers and adaptation into the new environment. The managers are the internal resources that a firm posses in penetrating the international market and thus the need of maximizing on the resource (Chang and Smale, 2013). An organization’s quality is attributable to the people who work within its ranks and this generates the importance of human resource management (HRM). HRM is a business concept that focuses on the employer-employee relations. This segment of an organization is tasked with the efficient and effective use of people within the organization with the aim of achieving and surpassing an organization’s business objectives (Stone, 2007). HRM considers the maximization of human input in the process of an organization for the satisfaction of different stakeholders including employees. Employee needs have to be met by an organization that seeks to maximize on their input and thus the necessity for strong consideration on staffing issues. The role of any human resource department within an organization is the creation of an environment that gives room for innovations, creativity, and while at the same time ensuring that employees feel they are recognized through commensurate rewards (Stone, 2007). Communication is one of the pillars for the success of an organization and hence it is essential that managers acquaint themselves with the language spoken in the foreign country. The first improvement measure that should be taken by multinationals utilizing expatriates from other countries in their international operations should be a review of the selection criteria. Each company entering the global market has an established selection process for its management team, but the deficiencies in the processes can only be established through observation and failure. The selection should be devoid of speed with which filling a position is observed avoiding knee-jerk reactions to the emergent need of filling a slot (Haslberger & Brewster et al., 2013). It is the prerogative of the top management to select highly competent candidates to propel their international interest and thus the management should be prudent in their selection. The research conducted on firms operating on the global front indicates that ad hoc selection of expatriates was highly rampant as opposed to critical evaluation of individual candidates. This indicates the necessity of streamlining the selection process to be more inclusive and take into consideration the level of international operations a company is involved in according to the industry (Anderson, 2005). The second solution to the problems that face expatriate managers is based on the training and facilitation process. The international market’s dynamics are extremely different from those that are faced by managers all over the world. It is therefore prudent for organizations to offer support to their expatriates in the form of training to equip them with sufficient skills necessary in international trade. Training is commensurate to the level of financing that is set aside for the transitioning phase (Inkson & Arthur et al., 1998). Companies are expected to ensure that they make substantial investment allocation to the training of its expatriate manager with the aim of acquainting them with the expected variations in the international market. Training is vital constituent of guaranteeing that expatriate managers understand the difference in their operational environment to facilitate their swift adaptation. The faster expatriate manager’s blend in the international market the quicker it is for them to transfer their input in the new market (Enderwick & Hodgson, 1993). The third solution that will assist a multinational in achieving its internationally set goals is through ensuring that expatriate managers have the required technical competence necessary for transmitting a company’s policies (Haslberger & Brewster et al., 2013). Technical competence is an important ingredient as it is necessary for an expatriate manager to be well versed with sufficient skills in the field of participation. Finally, it is vital that expatriate managers be equipped with interpersonal skills as well as counseling services to aid in their adaptability to the new environment. Critiques to the suggested measures The international market is diverse and varies from one country to the other and across different regions in the globe. It is therefore a daunting task to establish measures that aid in ensuring that expatriate managers from other countries perform effectively and efficiently in the countries they are assigned. The management of different organizations is limited by the above discussed solutions as they are not considerate of individual operations of a firm (Gupta & Banerjee et al., 2012). The solutions do not take into account that slightly over sixty five percent of the firms from the country engaging in international trade operate under export strategies, which do not require the constant presence of an expatriate manger in the foreign market. It is prudent to tailor make solutions that are applicable from one field to the other due to differentials in operations. The solution proposed on allocating sufficient funds for the training of expatriates is deficient because what is sufficient in one case might be a deficiency in another case. Moreover, some of the firms engaging in international trade are limited in terms of their financial capacity and thus capping the amount of investment to be made by a firm. The strategic alignment of the company has to be considered before the proposition of any solution to the HRM department. The solution particularly considers the funding aspect while disregarding the number of personnel and their quality present within the ranks of an organization. Training is pursuant to the identification of suitable candidates and the task cannot be done at random and therefore the criterion is not applicable in isolation (Inkson & Arthur et al., 1998). The proposed solutions do not look at different considerations such as trust that are used by the top management in selecting the person to represent an organization in its international activities (Gupta & Banerjee et al., 2012). The possession of interpersonal skills does not translate to prudent expatriate managers, but on the contrary it might act as a deterrent to the propagation of an organization’s operations. The use of expatriate managers in the foreign market is a dangerous avenue to be explored because it contributes directly to the increased brain drain faced by the country. The reason behind this argument is that multinationals take the best brains amongst their ranks to spearhead their activities in foreign markets and that leaves a gap in the local market. Finally, the proposed solutions do not factor in the input of the family in an expatriates performance in a new environment as the family is also part of the move (Gupta & Banerjee et al., 2012). References Anderson, B. 2005. Expatriate selection: good management or good luck?. The International Journal of Human Resource Management, 16 (4), pp. 567—583 Brewster, C. and Scullion, H. 1997. A review and agenda for expatriate HRM. Human Resource Management Journal, 7 (3), pp. 32—41 Chang, Y. and Smale, A. 2013. Expatriate characteristics and the stickiness of HRM knowledge transfers. The International Journal of Human Resource Management, 24 (12), pp. 2394—2410 Chetty, S. and Campbell-Hunt, C. 2003. Explosive international growth and problems of success amongst small to medium-sized firms. International Small Business Journal, 21 (1), pp. 5—27 Ellis, D. 2012. Exploring cultural dimensions as predictors of performance management preferences: the case of self-initiating expatriate. The International Journal of Human Resource Management, 23 (10), pp. 2087—2107 Enderwick, P. and Hodgson, D. 1993. Expatriate management practices of businesses. International Journal of Human Resource Management, 4 (2), pp. 407—423 Gupta, R., Banerjee, P. and Gaur, J. 2012. A Key Challenge in Global HRM: Adding New Insights to Existing Expatriate Spouse Adjustment Models. The Qualitative Report, 17 (88), pp. 1—30 Haslberger, A., Brewster, C. and Hippler, T. 2013. The Dimensions of Expatriate Adjustment. Human Resource Management, 52 (3), pp. 333—351 Inkson, K., Arthur, M., Pringle, J. and Barry, S. 1998. Expatriate assignment versus overseas experience: Contrasting models of international human resource development. Journal of world business, 32 (4), pp. 351—368 Kupka, B., Everett, A. and Cathro, V. 2008. Home alone and often unprepared--intercultural communication training for expatriated partners in German MNCs. The International Journal of Human Resource Management, 19 (10), pp. 1765—1791 Richardson, J. and Mckenna, S. 2006. Exploring relationships with home and host countries: a study of self-directed expatriates. Cross Cultural Management: An International Journal of management , 13 (1), pp. 6--22. Seak, N. and Enderwick, P. 2008. The management of expatriates in China. The International Journal of Human Resource Management, 19 (7), pp. 1298--1313. Stone, R. 2007. Managing human resources. Milton, Qld.: John Wiley & Sons Australia Read More