International Human Resource Management - Literature review Example

EFFECTIVE RECRUITMENT, SELECTION AND COMPETENCIES FOR POTENTIAL EXPATRIATES Introduction Establishing competencies and more effective recruitment and selection processes for potential expatriates has become increasingly important for the multinational companies. Multinational corporations have different subsidiaries in different regions and countries as their globalization strategy to expand business. With human resource mobility, MNC’s use expatriates in managing the various subsidiaries available (Hutchings and De Cieri, 2007). The objective of the International Human Resource Management (IHRM) is to use the best mix in recruiting its expatriates or host country personnel for different positions at the subsidiaries. Subsidiary management determines the success of the organization hence a need to provide the most Competent Expatriate. Expatriates for a number of reasons should manage most of the subsidiaries. First, the subsidiary might be in need of somebody to fix a reoccurring problem. The MNC will have to send one of its headquarters personnel to that subsidiary because expatriates have the necessary skills and product knowledge. Another reason for the need of an expatriate may occur if the MNC needs some of its parent organization personnel to learn. The objective can be gaining corporate diversity that is a benefit to the MNC in its globalization strategy. Success at the subsidiaries will be attained if the MNC uses competence and the best recruitment and selection processes because the expatriates will be able to manage the subsidiaries without any problems (Hutchings and De Cieri, 2007). Effective Recruitment, Selection and Competencies for Potential Expatriates Expatriate competencies involve having intercultural understanding, cultural intelligence and understanding of the common corporate language. Expatriates are usually sent to different regions and countries, which means exposing them to various work environments. The expatriates should be competent in all dimensions to be able to see the subsidiary through in meeting its objectives. The greatest challenge of globalization that needs careful consideration by all MNCs is a culture. Culture just means the way people or a community views their surroundings. There is a need for cultural consideration because different regions and communities will have different values, beliefs and norms. Culture is learned through schools, ones experience and interaction with various people with different cultures and training and development. An expatriate will have knowledge of certain cultural beliefs, values and norms if he or she had the opportunity to learn them or is willing to undertake the learning processes. MNC depend on different markets in different regions for their success (Evans, Pucik and Björkman, 2011). However, selling in one region will only be done if the product been sold matches the values, beliefs and norms of that area or market. Environment scanning that is one of the steps MNCs take when going global determines the kind of product and its specifications fit for a certain target market. Management too has to be aware of the target markets values, belief and norms to stir the subsidiary in the right direction. Studies show that cultural differences have different management practices, and so the parent organization cannot use expatriates with common cultural intelligence in all its subsidiaries. IHRM of any MNC should make sure that potential expatriates understand the three main types of culture before been posted or relocated to manage organizational affiliates (Dowling, Festing and Engle, 2009). They are corporate culture, professional culture, and individual culture. Corporate culture will entail the way of doing business in the country referring to the different specifications and regulations by the authorities. In any country, a MNC will extend its business; it will come across some authority regulations reinstated by the body governing that country to control trade. The expatriate should be aware of such rules for avoiding conflicts and unnecessary government suspensions in the host country. Professional culture refers to particular values and norms in a particular field. There are values and norms that govern individual areas in the host countries. Accounting profession for examples has a number of practices that should not be practiced and sets aside the values accountants should have (Kumar, 2011). Understanding the specific professional culture makes an expatriate more confident in handling business in the host country. Individual culture, on the other hand, refers to personal values, norms and beliefs. They are widely exemplified in religion and gender of a community. The expatriate should be able to recognize products acceptable by different religions, as well as different genders. Expatriates having cultural intelligence are better placed when tackling different situations the management comes across with the culture diversity. An expatriate comes across these various values, norms and beliefs both inside and outside the company. In providing a good working condition for the employees in the host country, the expatriate responsible should first understand their culture because it allows positive employee interaction and better time management. Subsidiaries may also involve themselves in business collaborations and negotiations. To perform well in the two activities, the management led by the expatriate should be able to recognize the culture of the partner before involvement in the process, maintaining the whole process as well as keeping the relationship for the future (Michalski, 2011). IHRM can choose a selection option whereby the subsidiary does its recruitment and selection. In recruiting the best in the host country, the expatriate should be able to recognize and understand the beliefs, norms and values of the potential employees. The expatriate uses that knowledge in the interviews, job design and description as well as writing policies for the employment (Dowling, Festing and Engle, 2009). It is important for an expatriate to be competent because the management stirs the general unit and the multinational company. Most of the expatriates are given the most sensitive positions in the host country companies hence bestowed with the decision-making process. In making the best decisions, one has to be knowledgeable enough about the career and the surrounding values, norms, and beliefs (Sengupta and Bhattacharya, 2007). Recruitment and selection process is critical for the performance of any business. The process sees the HRM get the best-qualified personnel for undertaking different activities in the organization. MNC’s are taking recruitment and selection at a higher notch because the IHRM is in search of the best competent individuals for the management of the subsidiaries. Recruitment and selection of personnel in the subsidiaries can be done through four main options. IHRM chooses the best choice after consideration of factors like; the current available IHRM practices in the parent organization (Michalski, 2011). The IHRM will usually consider the usual selection method it uses in other branches, need of training and development and the needed career development. Company specifications should also be considered in adopting the best selection option. The specifications include international experience gained, organizational culture and organizational strategy. The local unit specifications are also critical since the IHRM should know the extent of control needed and type of the decision-making process in place. The fourth consideration is the context the unit company is in like the cultural surrounding, human resource availability and industry type (Sengupta and Bhattacharya, 2007). With consideration of the above factors, the IHRM can then choice the option that will best fit the subsidiary. The options that IHRM can adopted for an effective recruitment and selection process are discussed in the following paragraphs. Ethnocentric option involving use of the typical parent organization practices in recruitment and selection. The IHRM is then responsible for the overall human resource management in different host countries. With the application of ethnocentric option, decisions are made at the headquarters with the units having limited autonomy. The philosophy behind the strategy is that, MNC’s have certain key positions in the host countries, which only need to be occupied by head quarter’s personnel. However, there are problems associated with the choice of limited career development in the host country and the possibility of losses since the expatriate may lack some necessary skills. The strategy benefits are decision centralization since subsidiaries have limited autonomy and greater control over the units. The method is applicable when the units are in need of the parent organizations control (Dowling, Festing and Engle, 2009). Polycentric option is IHRM option that gives the units some autonomy unlike ethnocentric. The subsidiaries in this strategy are considered distinct national entities able to manage themselves and make decisions as well as recruiting and selecting. Personnel are acquired locally and may be promoted to the headquarters if necessary. Benefits coming with this option can include, reduced training costs by the parent organization because it could train expatriates, better cultural and language understanding (Dowling, Festing and Engle, 2009). However, it may be risky because coordination between the unit and the parent organization is a challenge now that the units have their languages, decisions and ways of doing things. Career development is also a challenge for both headquarter personnel and unit staff due to lack of transfers and the limited exposure. Geocentric option takes into consideration ability of staff instead of region of the unit. It is the best method to employ in globalization since it favors one’s ability and ignores the nationality. With the method, IHRM can practice human resource management without any other factor of consideration apart from the ability hence reducing discrimination in terms of compensation and career development. The option enables the MNC get the best executive around the globe, promotes communication and resource allocation by the use of the extensive network created. However, it is faced with immigration problems since the parent organization has to help its personnel get the required documents like VISA, as well as cater for relocation expenses. It is expensive because it also requires training when staffs are transferred to different regions (Dowling, Festing and Engle, 2009). Regiocentric strategy can also be adopted where the organizations policy considers region in which the units operate. A particular area is given autonomy, and there is staff mobility within that particular region. The option is characterized with minimal transfers among different regions where the MNC has subsidiaries. Through this strategy, training costs are reduced because the culture and language have not changed in any case. There is better understanding of culture and it is less expensive to maintain. It is a challenge to the parent organization because coordination between the parent organization and the units is hard (Dowling, Festing and Engle, 2009). Personal experience limited career development as well as limited exposure since no transfers. The above options can be a success to an MNC if the factors considered by the IHRM necessitate a particular strategy. In most MNC, expatriates are highly regarded to be use in the management process because of the product knowledge they have compared to host country managers. That strategy sees the MNC have a competitive advantage over its competitors because with the use of the right skills and knowledge by the expatriate, and the unit can meet customers’ demands and attract more orders. Coordination is essential to the parent organization and the units and, therefore, the unit executive should be able to pass and receive the necessary business information without any hindrances and delays. That is achievable if the MNC has a competent and the best expatriate in charge of the unit (Dowling, Festing and Engle, 2009). Effective selection of potential expatriates helps reduce any unnecessary costs that might come with the way and enables the parent organization coordinate its business with the unit without challenges hence increased profits. Conclusion Multinational companies need competent personnel in their units for a successful global strategy. The unit management is necessary just to the parent organization management, and so the person responsible should be fully equipped with appropriate tools for handling business in different regions and environments. Competence can range from ones intelligence and ability to cultural intelligence. Management of units by the parent organization calls for use of expatriates. These are people with the best product knowledge outside their countries to represent the multinational companies. Before the allocation of office outside the country or transfer, the expatriate should have the required knowledge on the host countrys culture. Such knowledge is acquired from learning and social interactions among other sources. IHRM should also use the best recruiting tool when getting personnel for the multinational units. There are various options available in making sure that one gets the best from unit management. IHRM can choose to use ethnocentric, polycentric, geocentric, or region centric option. The options are applied to different situations after IHRM considers the available specifications. Example, if a unit is in need of more parent organization control, ethnocentric strategy is used because it ensures full control by the parent organization. Competency and effective recruitment and selection process makes sure that the MNC has the right expatriate to manage its unit in another country properly hence success of globalization strategy. References Armstrongs Handbook of Human-resource Management Practice (11th ed.). (2010). Hum Res Mgt Intl Digest, 18(4). Dowling, P., Festing, M. and Engle, A. (2009). International human resource management. Mason, OH: Thomson/South-Western. Evans, P., Pucik, V. and Björkman, I. (2011). The global challenge. New York: McGraw-Hill Irwin. Hutchings, K. and De Cieri, H. (2007). International human resource management. Aldershot, Hampshire, England: Ashgate. Kramar, R. and Syed, J. (2012). Human resource management in a global context. Houndmills, Basingstoke, Hampshire: Palgrave Macmillan. Kumar, R. (2011). Human resource management. New Dehli: I.K. International. Michalski, A. (2011). Strategic International Human Resource Management. Munchen: GRIN Verlag GmbH. Sengupta, N. and Bhattacharya, M. (2007). International human resource management. New Delhi: Excel Books. Thomas, D. and Lazarova, M. (n.d.). Essentials of International Human Resource Management. Trompenaars, A. and Hampden-Turner, C. (2004). Managing people across cultures. Oxford: Capstone. Read More