Global Human Resources Management - Research Paper Example

? Global Human Resources Management Introduction: With the increasing globalization in the world of business, multinationalcorporations are found to spread their business across different countries that require the human resources management of an organization to perform globally. For every organization, the role of human resources management or HRM is the most essential since it is the means to achieve success for the organization. With increasing competition along with globalization, business organizations have started considering the human resources as their major resources for accomplishing the objectives of the organization. Thus considering both the costs and benefits of an organization, human resources are vital for the continued existence, performance and achievements of the enterprise (Brewster et al, 2011). With businesses going global, there are significant benefits associated with the economy of the world as a whole and the overall success of the companies. However, with respect to the management of human resources, it has been obtained that international businesses do pose certain challenges and difficulties (Dessler and Varkkey, 2009). The present study focuses on international business and its impact on human resources management trying to have an understanding on how the growth in international business affects HRM and how such challenges encountered by global HRM may be dealt with effectively. International Business and HRM: The need and importance of human resources management have been realized in both multinational companies as well as for small and medium sized enterprises. When business at an international level is considered, it can be realized that the HRM of the company is subject to the impact of “multi-country, regional and global change and dynamism than managers in a single-country operation” (Brewster et al, 2011). Some of the responsibilities that the HRM has with respect to international business include the following (Brewster et al, 2011): Determine the strategy for becoming an international corporation; Determine the type of managers that would be effective for the achievement of organizational goals and find out means to obtain and develop such human resources; Determine the ways in which a business is conducted in different countries. This includes learning about the laws, trade unions, labor market, and expectations of the country; Understand the impact of local cultural standards on the company’s natural ways of working and whether all of these can be utilized in other countries; Decide on whether to choose expatriates or local employees; Determine ways to deal with international moves if the company chose to send some employees out from their original base; and Determine ways to manage knowledge across geographical and cultural remoteness. It can thus be realized that the HRM plays a significant role in the selection of the right people for the right tasks to be accomplished at the right times, and hence they are encountered with highly essential responsibilities and challenges when a local company moves abroad for international business. Impact of the Growth of International Business on HRM: With the growth of international business, it is evident that the workforce of an organization comprises of employees from different countries having different backgrounds and cultural knowledge and experiences. These employees can be expected to different sets of mind and skills and hence the management of such diverse workforce becomes a complicated responsibility for the HRM. It has been studied that in order to successfully achieve the goals of an organization in the international context, the working employees need to have interpersonal skills, influencing and negotiating skills, analytical and conceptual abilities, as well as strategic thinking capabilities. Moreover it is essential that the international workforce have greater knowledge on international business, international finance, international labor legislation, local labor markets, cultural differences, and international compensation and benefits (Brewster et al, 2011). Globalization has been observed to affect business in all its respects including HRM. The challenge to international HRM arises from the fact that the theories and practices of HRM followed at the national level cannot be applied at the international level. Thus the need for international HRM arises as a separate context. The impacts of growing international business are both favorable and adverse for the HRM. The favorable impacts include: HR practices across different companies in different countries are different from each other and hence requires revision; there is a need to involve workforce that is culturally diverse; outsourcing of work is required; there is a shortage of international managers that needs to be taken sincere concern of; and there is a need for global integration and responses from the local companies (Kumar 2010). The adverse effects of the growth of international business on HRM include: Loss of jobs owing to shifts in the process of production as well as imports; companies operating under pressure create fears in the minds of the employees; employees have to encounter demands for pay cuts from their employers accompanied with threats of exporting their jobs; with offshore operations being implemented for international business, the white collar and service hobs are at risk; and loss of competitive advantages of advanced countries with the building of advanced factories in countries that are low waged in order to make them productive in the local markets (Kumar 2010). Socio-economic and Political Factors in International HRM: Considering international business, there are four major factors that affect the international HRM. These include the culture, education, economic systems, and political-legal systems. Of these factors, the cultural factors are the most significant factors affecting HRM. This represents the culture of the country in which the business has been moved or expanded. The customs, languages, religions and associates cultural differences depending on different countries affect the HRM practices and work of the employees in a culturally new environment. Culture is the most essential factor that determines the influences of the other factors. It affects the way different managers need to lead their ways and make decisions for effective accomplishment of organizational goals (Noe, 2006). The socio-economic factors that affect international HRM include the general social and economic conditions of the countries where a particular organization plans to expand its business. Factors like the rates of inflation, interest rates, as well as growth or decline of the economy affect the international HRM (Mathis and Jackson, 2010) since it is the responsibility of the HRM to recognize such factors while selecting the right people for their organizations intending to achieve the organizational goals in the different countries. Decision making on different plans and strategies is the key role of the HRM and such external factors largely determine the nature of the strategies that can be effective for success. Political factors also affect the international HRM since different countries reflect different political scenario that would demand for the businesses to perform in different manners. Such differences are required to be identified by the HRM thus affecting the national practices of the HRM. Challenges for HRM Posed by Growth of International Business: The most significant challenge posed by the growth of international business for the HRM is that the HRM had to undergo significant changes in their national practices in order to serve for the international businesses. Problems are encountered in regard to coordination and control of the working employees. Trying to determine alternative solutions for the structure pose difficulties for the HR teams. In many cases, business organizations work under the pressure of achieving their goals at a faster rate as well as cost effectively thus multiplying matrix dimensions increasing the challenges for the HRM (Evans, 2010). Organizations that deal with international HRM thus have to manage not only different practices but also by means of a variety of strategy and other issues. The management of demands by the multinational companies is investigated by the international HRM. This is primarily done to make certain that 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 at the same time ensuring that it is responsive to the differences in assumptions and in what works from one location to another” (Brewster et al, 2011). This consists of particularly, the administration of the individuals who are required to perform globally. Different researches based on international HRM have acknowledged the significant possibilities that inclined the operations of HRM as it happened to be more internationalized, “such as the country that the MNC operated in, the size and life-cycle stage of the firm, and the type of employee (parent-company national, home-country national and third-country national)” (Brewster et al, 2011). With the context of international business, the complexities increase since the HRM has to manage people beyond the national setting and practices. Some of the additional functions that international HRM has to deal with include (Brewster et al, 2011): The need for greater operating unit diversity; More external stakeholder influence; Higher levels of risk exposure; More personal insight into the lives and conditions of families of the employees. Thus all these factors together lead to significant challenges for the HRM when business is considered internationally. Ways through which HRM can Deal With the Challenges: In order to effectively perform the roles and responsibilities in an international business context, the international HRM has to consider strategic measures thus preparing them for the challenges posed by the growth of the international business. The international HRM has to realize that problems associated with global business needs to be overcome both for the success of the activities of HRM as well as for the overall success of the business organizations. Thus, the fundamental services of the HR need to be served by the HRM while at the same time trying to overcome any obstacles leading from operations, culture and the organizations. The issues related to HR need to be perceived from the context of the worldwide results. Ideas and resources need to be utilized from across and throughout the world. Different cultures and notions of businesses in different countries need to be openly welcome by the HRM of a business when it is being expanded. All the policies and practices of the HRM should have its focus on the issues and solutions covering the world as a whole and not restricted to any particular country or region (Mathis and Jackson, 2010). It can thus be said that if the HRM of an organization builds up a mind set of international business, then it would be able to deal with the challenges posed by the growth of international business effectively. Conclusion: From the above study it could be concluded that with the increasing globalization and competition in the world of business, international HRM has become a matter of significant concerns for business organizations trying to expand globally. HRM being the most essential part of any business has been studied to encounter several challenges as a result of the cultural, social, political and legal differences across different countries. Most importantly, the national policies and practices of the HR of any company cannot be applied in the international context. Thus it can be concluded that in the present scenario, the HRM needs to consider their measures with an international perspective in order to prepare them well for the international business practices and deal with the challenges and problems with an international mind set. Such a mindset would enable the business organizations to perform and succeed effectively globally with the abilities of international HRM being utilized. References Brewster, C. et al (2011). International Human Resource Management. UL. Retrieved on 24 April 2013 from: http://www3.ul.ie/ulearning/html%20files/global%20hrm/pdfs/International%20Human%20Resource%20Management.pdf Dessler, G. and B. Varkkey (2009). Human Resource Management, 11/e. India: Pearson Education India. Evans, P. (2010). The Global Challenge. New York: Tata Mc-Graw Hill Education. Kumar, R. (2010). Human Resource Management: Strategic Analysis Text and Cases. India: I. K. International Pvt Ltd. Mathis, R.L. and J.H. Jackson (2010). Human Resource Management. Connecticut: Cengage Learning. Noe (2006). Fundamentals of Human Resource. New York: Tata Mc-Graw Hill Education. Read More