Human Resource Management - Essay Example

Human Resource Management Table of Contents Question 3 Introduction 3 Background and Issues Raised in the Case Study 3 Managing HR in MNC 4 Strategic Role of Expatriates 7 Key Recommendations for Fidelity 10 Conclusion 11 Question 2 11 Introduction 11 Organisational Values and Organisational Culture 12 Organisational Beliefs and Organisational Culture 13 Organisational Norms and Organisational Culture 14 Organisational Transformation and Organisational Culture 15 Conclusion 16 Reference 18 Question 1 Introduction The business world has experienced a massive change as an effect of globalisation, modernisation, internationalisation and technological advancement. The emergence of the international trade and business is one of the most crucial outcomes of these changes and multinational corporations (MNCs) have become a vital phenomena for growth oriented economy and society. These MNCs are managed in a more challenging and more complex environment as managers have to face an entirely new arena. In fact, the MNCs have to cope with the local macroeconomic factors for sustaining in a foreign market where cultural factors are very one of the most critical areas of consideration (Bohlander and Snell, 2009, p.662). The expatriate managers has to play a very significant role in the sustainability in foreign market as they have better knowledge regarding the company so that it can able to identify the areas of changes to be incorporated in business unit present in the foreign land (Miles, 1995, p.24). This section will attempt to discuss and present issues faced by a MNC company and to offer a set of plausible recommendation. Background and Issues Raised in the Case Study Fidelity Plc is primarily a UK-based IT consultancy MNC, present in a number of countries like France, India, Germany, China etc. From the very beginning of its internationalisation, Fidelity went expanding its business units in foreign count in an unsystematic way causing loose management. It means that Fidelity has failed to assess the necessary factors in foreign markets like cultural differences and internal capabilities like competent managers. Moreover, it has not also offered proper training to its managers for managing the international business units. Noe et al, have identified three necessary assessments for global expansion i.e. organisational, task and person analysis (Noe et al, 2007, p261). However, the prevailing management of Fidelity has identified three major issues for managing subsidiaries companies. Firstly, it needs to recruit competent managers who are able understand basis needs to organisation and can play a vital role in international business development. Secondly, in this process, the recruitment policies must be flawless appropriated managers can be recruited. Thirdly, it also needs to the business in Germany, US and better management systems for the subsidiaries for India and China. Under the above circumstances, Michael Hutchinson, the newly promoted HR manager for the business unit in Paris, has suggested to recruit young consultant to the international business units. However, the Board of Fidelity does not seem to be agreeing with this idea as the Board members perceive that assigning a local consultant to the foreign market would be expensive and ineffective. Simultaneously, they also fear that over dependency on country managers may cause fatal consequences. Hence, they advocated for ‘virtual working’. However, managing an international business unit on virtual working will be risky as Anja Hendel has commented that virtual working “limits the opportunities for combination” and there are also other drawbacks like inefficient customer service and negotiation, time consuming etc (Hendel, 2008, p122). Managing HR in MNC As per the prevailing issues in Fidelity, the major problem for the company it to manage its subsidiaries companies, in this regard, Fidelity requires competent HR managers who are able to make proper balance between the local culture and the culture of the organisation (Rao and Walton, 2004, p.95). In this respect, it becomes quite necessary to identify the working culture in the prevailing foreign country. In order to indentify the cultural dimensions, Hofstede Geert has developed a theory known as five cultural dimensions. As per theory, there are five major cultural dimensions i.e. “power distance index (PDI), Individualism (IDV), masculinity (MAS), uncertainty avoidance index (UAI) and long-term orientation (LTO)” (Geert Hofstede – itim, 2009). While planning for the HR policies for subsidiaries, Fidelity must identify these factors and incorporate necessary steps accordingly. On the other hand, the recruitment of the proper employee for the foreign business units is also a major area for consideration for Fidelity. In the process of recruitment, the HR managers should also focus on the working culture of the business organisation. In fact recruitment process must be focus on two major criterions i.e. individual and situational. These factors are given in the following model. Figure 1: Factors in Expatriate Selection (Source: Peng, 2008, p.442) The situational factors refer to the necessary criterions that must be matched with required working conditions. The components of the situational factors include the cultural suitability of the market, cultural suitability of the company and language barriers. On the other hand, the individual factors must include the internal capability and suitability of the job profile in accordance to the particular foreign market. The primary reason for this typical recruitment policy is that the styles management styles of the different regions vary as per the requirement and Fidelity must ensure that the managers responsible for foreign subsidiaries (Bach, 2005, p.68). Kim and Gray have developed a model for managing the international human resource management for a subsidiary company present in foreign regions. Figure 2: Model for International Human Resources Managements for MNC (Source: Kim and Gray, 2005, p.2) Strategic Role of Expatriates Once, Fidelity will be through with the successful in the recruitment process by selecting appropriate and competent managers for the foreign business units, the responsibility of maintaining a sustainable business organisation in the foreign location is on the expatriate managers. Managing HR in a new cultural of a foreign country must is one of the challenging task as proper HR policy and human management is a crucial determinants in organisational performance (Jackson, Schuler and Werner, 2008, p.60). In the earlier section, it has been already mentioned that cultural differences are primary factors influencing the management of MNCs in a foreign land. However, it is necessary from the company’s end to form an effective expatriation policies to achieve the most desirable outcome i.e. business growth. Brewster and Harris have shown a proper process for farming an effective expatriation policy as given below. Figure 3: Expatriation Policy (Source: Brewster and Harris, 1999, p.170) As per the above model, the expatriation policies must be backed by a set of subsidiaries level strategy. Expatriate managers must be given necessary training and other benefits like compensation, proper resources for relocation and adjustments etc. The responsibilities of expatriate managers are higher than the managers managing the business within a domestic country. The role of expatriate managers becomes important as they have to link the cultures of parent company and local culture and this makes their task very challenging. Mike W. Peng has distinctly identified the specific role of expatriate which can explained using the following model. Figure 4: The Role of Expatriates (Source: Peng, 2008, p.441) The above model clearly states four major roles of expatriates that help them in maintaining the balance between parent company and subsidiary company present in host country. The Directors of Fidelity have an assumption that the most of expatriate managers are not able to be successful in the foreign country, and this assumption is true to some extent. However, the Fidelity must identify the major reasons that cause failure of the expatriates. Some of the primary factors are cultural differences, family stress and ineffective compensations. Therefore, the Fidelity must ensure that these factors do not hamper the performance of managers. Key Recommendations for Fidelity As per the above theoretical background regarding HR management in foreign land by focusing on the prevailing issues in Fidelity, asset of relevant strategies can be made and these are given below. The primary focus of Fidelity for recruiting expatriate managers for its subsidiaries is the consideration of major factors in the process of recruitment. Fidelity must analyse the candidate as per the situational and individual competence. For indentifying situational factors and for providing training to its expatriates mangers, the analysis of host countries’ cultural dimensions are very necessary and it can implement the theory of five cultural dimensions developed by Geert Hofstede. The Boards of the Fidelity Plc must frame a set of strategies and policies for its subsidiaries and for expatriates respectively. In order to reduce the chances of failure in expatriates, the Fidelity must identify the major negative forces and frame expatriate policies in accordance. On the hand, there are certain factors that must be vary as per host country requirements and candidate should be selected accordingly. For example, for recruiting expatriate managers for Indian subsidiary, the HR manager must ensure that he/she has better knowledge regarding Indian culture and language. Conclusion Managing HR for a subsidiary present t in an international market is one of the most challenging tasks and requires a number of factors to be taken into account. Fidelity Plc is currently facing a crisis for its subsidiary company due to lack of effective management. The newly promoted manager, Michael Hutchinson for its Paris unit has suggested for sending expatriates in foreign markets. However, the directors have a fear that most of the expatriates are failure. However, with an effective process of recruitment with proper framed policies through proper analysis will be better idea. The process of recruiting expatriates must consider two major factors i.e. situation (including cultural dimensions and language etc) and individual (competencies, adaptability etc). However, in this process another pair of tasks are important i.e. formulation of expatriate policies & subsidiary strategy, and proper training to the expatriates. Question 2 Introduction The scope of Organisational culture studied in respect of multinational corporations reflect large amount of influence of different cultural factors of the large number of people spread along different geographical areas. Organisational culture in terms of global corporations is considered to be a composite set of factors pertaining to gender factors, ethnic ideologies, professional dynamics and religious influences of the different regions. These separate cultural factors in total form the potential culture of the business corporations. Business organizations in order to perform in an efficient manner should endeavour to frame the objectives of business mission and philosophy depending on the cultural factors. (Keyton, 2005, p.119). Further the growth of multinational corporations also signifies the enhancement of Organisational knowledge through encouragement of employees spread along different territories to share their knowledge and organisational experiences. The sharing of organisational knowledge amongst employees spread along larger geographical bases has helped the companies to turn into organisational leaders. (Bartlett & Ghosal, 1991, p.12). Organisational Values and Organisational Culture The business organization as a whole performs effectively in a condition where the organisational values become imbued with the cultural dynamics of the Organisational people. It is understood that for an organization to perform better there is a high need for both stronger values shaped by the framing the right business mission and philosophy and a flexible workforce ideology. Flexibility in terms of organisational people signify that the cultural parameters of the concern must be rightly transformed keeping in tune to the changes in the external marketing environment. Effective balancing between the cultural parameters of the concern to the mission and vision set happens through the designing of the right training modules to draw the interest and expertise of the existing human resources. This fact helps in the optimum utilisation of the present expertise to help the Organisational managers gain the best return on the amount of investments generated for the same. In regards to the above discussion separate examples can be presented for multinational companies pertaining to the European and American context and also for such companies belonging to the Japanese soil. It is found that these companies reflect distinct cultural ideologies. Organisational culture of the European and American corporations reflects parameters like rendering power to individual hands, shortening the gap between managerial and workplace teams and enhancing the position of feminine workers in the concern. In sharp contrast to the Organisational culture of the European and American concerns the Japanese corporations reflect an organisational culture where collective effort is given more importance to individual expertise. Further a high amount of barrier is kept between the managerial and workplace teams and focus is rendered for the betterment of the masculine workforce. It is further observed that the American and European organisations operating on the above mode worked to generate further amount of productivity than in the case of Japanese companies. The multinational corporations in order to perform better in the global hemisphere are also required to understand the cultural and sociological ramifications of the different work groups spread along international zones and modify the Organisational objectives based on such. (Rose, Kumar, Abdullah & Ling, 2008, p.47, 49, 51). Optimal utilisation of the existing business resources based on technological and human parameters help the organization to reach high amount of efficiency in the productivity circles. Technological resources like the growth of information technology have helped in enhancing the competencies of the organization to compete with the other competitors in the same industry. (Xiao & Dasgupta, 2006, pp.717-718). Organisational Beliefs and Organisational Culture The entire organisational culture can be observed as being constituted by different subgroups of people which reflect different set of beliefs. It is observed that larger concerns like IBM and others have a huge diversity in the different work groups which thereby share different ideologies. However the organisational manager work on integrating such systems of diversified beliefs into a collective work environment to generate productivity in a collected work sphere. Other organisations exist in the global business sphere which reflects totally different ideologies pertaining to the different departments. Further the existence of informal work groups in the Organisational level tends to cultivate different set of beliefs which in turn differ from the general organisational ideologies. Again the organisational beliefs divided along several organisational groups which in turn reflect wide amount of diversity may interact with each other or remain distinct by nature. The high amount of interactivity rendered among the beliefs of the different organisational groups helps the business concerns to become organisationally stronger. On the contrary such organisations which fail to overlap the diversified nature of the beliefs emanating from the different work groups tend to become weaker. (Hayes, 1997, pp.94-95). In international corporations like IBM the total organisational culture is framed by assimilating the beliefs of the different work groups. These organisations by encouraging the different work groups to perform in a collective sphere help cultivate an environment of supreme knowledge in the organisation. Spontaneous development of the knowledge sphere of the organisational members is enabled through cultivation of interactive work systems in the concern. (Serrat, 2009, p.2). Organisational Norms and Organisational Culture The diversity rendered by the cultural parameters of the different working groups in the organization is collectively synchronized to satisfy the parameters of the existing Organisational norms. However a successful organisational leader is considered to be a person who desires to transform the set beliefs and organisational ideologies which together constitute the Organisational norms while working within the system of Organisational culture. This transformation of the existing set of values and norms keeping an eye on the Organisational culture help cultivate a changed environment in the concern. Modification of the Organisational norms in respect to the different stakeholders helps in cultivating a system of higher organisational productivity. (Keyton, 2005, p.144). Citing an example in this regard it is observed that the Chief Executive Officer of Apple Computers helped in fostering an environment of high organisational creativity by encouraging the employees to modify Organisational norms. In other cases it is also found that advertising firms also encourage its employees to create a major breakthrough in the existing system of Organisational norms to help in fostering an environment of sustained creativity in the concern. In the above cases it is found that modification of the Organisational norms enabled in such large scales helps to generate large amount of productivity in the concern. (Brenton & Driskill, 2010, p.141). Organisational Transformation and Organisational Culture The process of Organisational transformation in the organization is enabled through the system of enhancing the knowledge systems in the concern. The high amount of knowledge resources in the organization is considered by the Organisational managers as key strategic elements which help in generating organisational productivity. Knowledge management function in the organization takes place along three separate parameters like transformation of the existing business process, incorporation of developed technologies to enhance the firm’s productivity and thereby helping the existing human resources to transform themselves adequately and finally working on to change the organisational culture through modification of the cultural parameters. (Maier, 2007, pp.223-224). Organisational transformation enabled in regards to multinational corporations requires adapting themselves to change depending on the cultural parameters of different countries. Like for multinational corporations operating in the Chinese region it is required by the organisational managers to understand the cultural parameters of the country by closely working with expatriate people in such areas. While again in regards to the Australian landscape the organisational manager can successfully endeavour to bring about creativity and innovation in the organisational sphere by working in a collaborative business environment with the Australian people. The system of knowledge creation in a multinational organisation is found to suffer from the emergence of potential conflicts in the business sphere owing to the process of repatriation. This process enables organisational people who have earned significant expertise in certain functional areas while working in foreign countries to return back to their previous area. These people in turn help in enhancing the productivity parameter of the existing organisational groups through the use of the experience gained. In cases like a manager of an American bank having worked in Germany for years return to his former soil and focuses on the development of Organisational capabilities by depending on the experience gained may suffer from potential conflicts. These conflicts thus render obstacle for the enhanced adaptation of the expertise explored. (Mendenhall, 2008, p.123; Fernandez & Sabherwal, 2010, p.45). Conclusion The Organisational culture of the organisation is constituted by the set of values and organisational objectives which forms the basic philosophy of the concern together with the set of diversified ideologies of the different work groups in the concern. These different values reflected by the large number of people working in the concern are required to be transformed by the organisational manager in successfully accomplishing the organisational objectives. 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