International Human Resource Management - Essay Example

INTERNATIONAL HUMAN RESOURCE MANAGEMENT by International Human Resource Management What is the relationship of national culture to human resource management? The national culture has an integral role in developing an effective human resource in terms of its management policies and strategies. This is because various countries have varying cultures. When it comes to understanding the national culture of any nation where a particular multinational company has a desire of penetrating has to understand the national culture of that nation. It is the role of the human resource department of that company to initiate strategies bearing in mind the national culture of that nation. This is the sole way which can assist this nation to manage to achieve its goals and objectives in this nation. There is a very close relationship between national culture and the human resource management as the document analyzes. The essay analyzes the impact of national cultural on the human resource management. The national culture framework by Hofstede attributes national culture to aspects such as collectiveness versus individualism, power distance, uncertainty avoidance as well as femininity versus masculinity. The national culture of various countries will handle these aspects from different points of view. These aspects entail the feelings of people and human thinking which tends to create basic problems in every society that every society is expected solve. These problems, however, manifest in varying dimensions from one country to the other. Selection, as well as recruitment, is a chief function of the human resource management. Before an organization starts the process of recruiting and selecting, it is essential for the human resource professional to carry out an analysis of that country’s national culture (Davila & Elvira 2008). If the national culture of that nation is individualistic in nature, the human resource management professionals have to develop strategies that are in line with the national culture of that country. In a nation that uses individualism, the HR professionals will have an assurance that the employees they acquire are transferable to any part of that nation as well as outside that nation. This is because these people are concentrating on their individual career only and are not expected to take care of their immediate family. However, if the cultural dimension of a particular nation is collective in nature, the HR professionals have to come up with strategies bearing in mind that the people they will attain are family conscious. This clearly shows that for the business will acquire the employees as per the culture of the respective nature. Moreover, the employees who will be acquired will be handled as per the national culture of that nation (Hutchings & De 2007). For example, if a Taiwan entrepreneur wants to enter the British market, he or she has to familiarize him or herself with the British culture. This is because the British and the Taiwan national culture are entirely different. The Taiwan culture is attributed to have low individualism, high power distance, and moderate in uncertainty avoidance. The British culture is contrary to the Taiwan one. In Taiwan, recruitment and selection usually target relatives and friends while the British companies make use of application forms, panel interview and aptitude test when selecting and recruiting. When a British multinational company is penetrating in Taiwan, they have to develop a strategy bearing in mind the Taiwan national culture for it to penetrate in this market (Rowley & Warner 2008). Development and training have a significant role in building expertise and competitive skills among the organization’s employees in their fields. It is essential to initiate a development and training program having considered how employees are likely to behave. This helps the company to achieve the desired outcomes of the training. For the training programs to suit the desires of the employees, the human resource professionals have understood deeply that market’s national culture. This is mainly because the employees’ performance is linked with an effective training which in turn affects the general performance of the organization. For instance, any nation that has a high power distance dimension in its national culture, the only development and training that can be effective is the on job training (Parry 2013). In the nations that are characterized by low individualism, the HR management professionals have to come up with a compensation strategy that encourages group work and team building. This is because the individualistic nature’s people love and embrace team work. The manager also need rewarded on the basis of employees’ cooperation. This will in return lead to achievement of goals as well as objectives. The human resource professional needs to offer some intrinsic rewards for these people. This reward will help increasing the level of motivation, as well as the commitment of the employees. This in return acts in favor of the performance of the organization. In Taiwan, for example, employees are paid as well as punished on the basis of the team while the British organizations reward and also punish employees on the basis of individual performance (Harris et al 2004). Lincoln Electric succeeded as a result of the compensation system in America. They made claims that the system could be applied to the globe. However, when the organization expanded manufacturing units to the European countries the organization productivity was adversely affected. The system ended up failing in Korea, Mexico, and Germany. The chief reason for the failure of the system was that the American national culture differed completely from those of other countries. For this reason, the human resource management policies could not be implemented in the rest of cultures which had totally different cultural dimensions (Martocchio & Liao 2009). To initiate a performance evaluation system, it is essential for the human resource managers to understand the individualistic culture as well as the collectivistic culture. If the human resource manager of a respective organization is aiming at developing a performance evaluation system of an individualistic culture, the human resource manager of that organization has to initiate techniques that can measure an individual’s performance. In a collectivistic culture, the human resource managers will have to concentrate on the performance evaluation measurement of a group rather than of individual members. The national culture dimensions suggest that there exist a correlation between impacts of various dimensions on the performance evaluation system (Bohlander & Snell 2010). A high degree of collectivism tends to affect the performance evaluation system in a similar manner to a high degree of femininity, high power distance, and individualism. However, low power distance, muscularity, low uncertainty avoidance and individualism tend to have similar effects on performance evaluation system. The bottom line of it is that the human resource management needs to develop the culture category before the performance evaluation system is developed. Employee commitment, motivation, as well as job satisfaction and employee involvement, are crucial dimensions when it comes to organizational performance. For every human resource manager, it becomes a real challenge to develop these characters among various employees in a diverse culture (Brewster & Mayrhofer 2012). If a nation culture has an individualism dimension, the human resource manager will have concentrate on an intrinsic reward. This is because these kinds of people are only running after human emotion and materialistic things. However, the market entails the collectivism dimension, the human resource manager will have to concentrate on the extrinsic reward such as the Christmas holiday, Eid holiday and being allowed to have a compulsory leave when a family member passes on. This is because these people are more concentrated in the society rather than their individual forms. For the human resource to handle a successful workforce, he or she has to understand the nature of the workers he or she is dealing with. This clearly shows that national culture affects the human resource activities directly (Stone & Stone-Romero 2008). The cultural diversity has a pivotal role when it comes to formulation as well as implementation of the human resource strategies. It relies on the manner in which the human resource manager will articulate issues of diversity and the way of integrating the diverse workforce on a sole and common objective. As a basic principle, the human resource manager should understand that human resources are the greatest assets in any organization. The success of an organization is also dependent completely on the people who belong to the company. Using the workforce diversity, it is possible for companies to improve their entire performance. This will also help the company to acquire more profits. It depends on the manner in which the human resource manager will develop strategies for transforming diversity into strength (Punnett 2013). The discussion has highlighted the direct relationship between the national development and culture and the effectiveness of the strategies of human resource management. This is because the human resource management policies which tend to be formulated through bearing in mind the particular market’s national culture. This will end up increasing the employees’ involvement, motivation, job satisfaction as well as commitment towards work. This ends up increasing their performance. The eventual organization’s overall performance will rise, and the organization will be able to attain its goals and objectives. As the Lincoln electric’s compensation system worked in USA market simply because the strategy was suitable and failed in Germany, Korea and Mexico since it was unsuitable. The national culture, therefore, is a major weapon of the human resource management development effectiveness and strategies. Thinking of a multinational organisation that plans to transfer its employment relations practices to its overseas subsidiaries, why might it find that they are implemented in full in some countries, partially in others, and not at all in others? Since the multinational corporations operate in numerous distant cultures, the cross-cultural relationships happen to be their daily experience. These relationships tend to affect the workforce of these companies. One of the features of multinational companies is that it has many branches. These branches may be distributed in the entire world. However, transfer of employees to work in these subsidiary branches is accepted fully in some companies while in other companies only partially and in others it is completely denied. The transfer of employees is a very crucial aspect for the success of the company. It is hence a big blow to the company when they are denied a chance of transferring employees in their subsidiary corporations. Various reasons are attributable to these varying responses towards the transfer of employees in various nations as the essay discusses (Thompson & Yu 2000). One of the factors that contribute to the variation in the response towards the deportation of employees by multinational companies to their subsidiary oversea branches is the variation in national policies as well as culture. It is very clear that every nation operates under sovereign policies that tend to govern all the business activities in their nation. The policies of one nation may be similar to those of nations either fully or partly, and there is also a possibility of the policies differing completely. These discrepancies will automatically make these countries approach the issue of employees’ deportation in different ways. For example, in some countries, they might be having a stand policy that any multinational company that is operating in their nation has to acquire 40% of the total workforce in that nation (Chang et al 2007). If the corporation had plans of deporting s full team of the workforce, will have to deploy 60% and recruit the rest in their host nation. This is in the attempts of complying with that nation’s standards. This clearly shows that the implementation of this aspect will be partial rather than fully. In other nations, they could be lenient with the multinational companies giving them freedom to operate independently. This aspect will help these companies to fully implement the deployment process. In some nations, the aspect may be denied fully on grounds such as the company is doing illegal business activities, or its workers are a threat to the security of that nation. This nation will, therefore, hinder the implementation of the deployment process (Farley et al 2004). All these factors are the possibilities that are likely to take place. They will either allow or disallow the deployment process to take place. However, they just revolve around the national culture or policies of this nation. In a given nation, certain business activity might be legal while in another it will be illegal. Such an aspect will in return affect the trade relations between these two nations, and it will be evident that this nation cannot deploy its workers in such a nation. The other reason that is likely to affect the deployment process implementation is the political, economic or social differences of these two nations (Matthews & Zander 2007). The mother nation and the host nation might be involved in a conflict of its kind. It is evident that when war erupts between two nations, all the ties between these two nations are adversely affected. As a way of punishing the other nation, the host contrary or the nation, whereby the subsidiary branch is located, might decide to protect the nation from carrying out their business activities as a way of punishing them. In such a scenario, all the aspects of this subsidiary branch will be adversely affected the deployment process also inclusive. However, if these two nations are in good terms, there is a possibility of the mother nation given freedom to operate independently. This will help the deployment process to be implemented in a friendly manner (Ericksen & Dyer 2005). The economic status of host nations and also affect where the subsidiary branches are established has the potential of deterring the success of the implementation of the deportation process. In a given host nation, the economic status of that nation might be very stable thus enhancing the economic activities of the subsidiary branch to flourish. The mother company will not under pressure to deport employees to that branch no matter how expensive it will be. It is evident that deportation of employees to another nation is expensive as opposed to hiring in the respective nation. However, if the economic status of that nation is allowing the subsidiary branch to do well, the deportation process will be easy to be implemented fully (International Industrial Relations Association et al 2002). If the economic status is, however, unpredictable, the mother company might implement be forced to implement the deployment process just partially so as to maintain its economic relevance. They have to consider the profit and loss aspects and hence implement deployment process that is just sustainable in that it might not meet their expectations, but it will not make the company incur a loss. By so doing the company will have implemented deployment only partially and not fully. To some extent, the mother company may fail to deploy workers completely if the economic status of that nation is completely unstable and hence making the subsidiary company to run at a loss (Doole & Lowe 2008). For a company to remain relevant in the market, they have to be operating at a profit and avoid incurring losses at any cost. If the economic status is causing the subsidiary branch to run at a loss, the deployment process might not be possible in such a time. This is because the process will escalate the loss margin more than it will offer a solution. The employees that are meant to be deported might be having the potential to turn around the situation. However, putting into consideration the cost that will be incurred and the impact of that cost, the deployment process gets an obstacle. In such a situation, the host mother company may decide to make very few adjustments that are sensitive. The other way is canceling the deployment process completely until the economic status improves (Contractor et al 2007). The economic or financial status/market share in the market of the subsidiary as well as of the mother company is another aspect that determines the manner in which the deployment process will be implemented. Employment in any given company is always done when the company is in a stable financial status. If it is experiencing a financial crisis, the company has to wait until the situation normalizes so as to make appointments. For example, when a nation experiences financial constraints, the step that it uses to fight it other than monetary policies is retrenching people so as to reduce the wage bill. By so doing the financial status will normalize eventually. However, if they can make appointments in such a period the situation will just escalate rather than improve (Brewster et al 2005). The same case applies to the multinational companies with their subsidiary branches. The deployment process would cost them many funds. The deployment process, however, might be having the potential of improving the subsidiary’s financial status to a great extent through improving its market share in its respective nation. If the financial status of the company is enough to sustain the deployment process, the company can hence implement the deployment in full. This will improve the workforce of the subsidiary branch thus improving its market share in that country. This will in return lead to the improvement of this nation financially. This is, however, done if the company is well able to sustain the deployment process without straining or creating making it incur unworthy losses (UNCTAD 2008). If the market share is available though not very appealing and the financial status is not very sustainable, the company can implement deployment partially concentrating only on essential deployments. This means that the main objective is the market share, but the financial status of the company determines the extent to which the deployment process will be executed. If the market share, however, is good, the company may put into hold the deployment process. This could be especially if the company is not in a very stable financial status. The key thing is that the market share is sustainable and, therefore, the financial consideration overshadows the market share. In such a situation, it is advisable for the company to hold the deployment in such a country. However, if in a country the market share is very small, the company may have to look for ways and means of funding the deployment process so as to increase the market share which will in return improve the company’s financial status (Birkinshaw 2000). It is evident from the above discussion that for a multinational company to deploy its employees in a given nation, there are considerations that have to be considered pertaining that nation. The factors that can hinder the deployment process can be in the nation itself or the in the company itself. However, if the necessary considerations about the deployment are done, it will be easy for the company to decide to which extent they deploy employees. References List Birkinshaw, J. 2000, Entrepreneurship in the global firm. London [u.a., Sage. Bohlander, G. W., & Snell, S. 2010, Managing human resources. Mason, OH, South-Western Cengage Learning. Brewster, C., & Mayrhofer, W. 2012, Handbook of research on comparative human resource management. Cheltenham, UK, Edward Elgar. Brewster, C., Sparrow, P., & Harris, H. 2005, Towards a new model of globalizing HRM. International Journal of Human Resource Management 16(6): 949-970. Chang, Y. Y., Wilkinson, A., & Mellahi, K. 2007, HRM strategies and MNCs from emerging economies in the UK. European Business Review. 19(5): 404-419. Contractor, F. J., Kumar, V., & Kundu, S. K. 2007, Nature of the relationship between international expansion and performance: The case of emerging market firms. Journal of World Business. 42: 401-417. Davila, A., & Elvira, M. M. 2008, Best Human Resource Management Practices in Latin America. Hoboken, Taylor & Francis. Doole, I., & Lowe, R. 2008, International marketing strategy: Analysis, development and implementation. London, Cengage Learning. Ericksen, J., & Dyer, L. 2005, Toward a Strategic Human Resource Management Model of High Reliability Organization Performance. International Journal of Human Resource Management 16(6): 907-935. Farley, J. U., Hoenig, S., & Yang, J. Z. 2004, Key Factors Influencing HRM Practices of Overseas Subsidiaries in Chinas Transition Economy. International Journal of Human Resource Management. 15(4-5): 688-704. Harris, H., Brewster, C., & Sparrow, P. 2004, International human resource management. London, Chartered Inst. of Personnel and Development. Hutchings, K., & De, C. H. 2007, International human resource management: From cross-cultural management to managing a diverse workforce. Aldershot, England, Ashgate. International Industrial Relations Association, University of the Philippines., & Philippine Industrial Relations Society. 2002, Changing work and employment relations in a globalizing Asia: Towards decency and fairness : proceedings. Quezon City, University of the Philippines, School of Labor and Industrial Relations and the Philippine Industrial Relations Society Martocchio, J. J., & Liao, H. 2009, Research in personnel and human resources management: Volume 28. Bingley, UK, Emerald Jai. Matthews, J. A., & Zander, I. 2007, The international entrepreneurial dynamics of accelerated internationalization. Journal of International Business Studies 38(3): 387-403. Parry, E. 2013, Global trends in human resource management. Basingstoke, Hampshire [u.a., Palgrave Macmillan. Punnett, B. J. 2009, International perspectives on organizational behavior and human resource management. Armonk, N.Y, M.E. Sharpe. Punnett, B. J. 2013, International perspectives on organizational behavior and human resource management. New York, Wiley Rowley, C., & Warner, M. 2008, Globalizing international human resource management. London, Routledge. Stone, D. L., & Stone-Romero, E. F. 2008, The influence of culture on human resource management processes and practices. New York, Psych Press. Thompson, K. O., & Yu, A. F. 2000, Tai shang guan mang hua: Xin, Ma, Yin, Fei de jing yan : yan tao hui lun wen ji = The proceedings of Taiwanese enterprises in southeast Asia : January 7-8, 2000 : Research Center for Global Taiwanese Enterprises, College of Management, National Taiwan University. Taipei, Taiwan, Research Center for Global Taiwanese Enterprises. UNCTAD. 2008, World Investment Report 2008: Transnational corporations and the infrastructure challenge. New York, United Nations Conference on Trade and Development. Read More