How Human Resource Management Can Help Address the Issues Encountered in Internationalisation - Essay Example

Introduction This essay will critically evaluate the utilisation of the principles of human resource management (HRM) to assist a firm to internalise branding in its internationalisation strategy. This will include a review of the main features of international human resource management and how it can be integrated into the affairs of an organisation. To this end, the journal on IKEA’s expansion to Russia and China will be used as the basis for the critical review and analysis Fundamental Issues Presented in the IKEA Case IKEA is a multinational company that designs and sells ready-to-assemble furniture, household appliances and vehicles and parts. It is the world’s largest furniture retailer and has major branches in the traditional first world countries of the world. According to the case under review, IKEA has sought to expand and grow into Russia and China, countries that are traditionally classified as second world nations that are based on Communist ideas and concepts. IKEA has a vision “to create a better everyday life for many people” (Tarnovskaya & de Chernatony, 2011). This has culminated in a culture of combination and collectivism through which there is a hard side meant to improve returns on investments and a soft side that regulates the conduct of workers in the company. This tradition has created a corporate value system of togetherness and enthusiasm for constant innovation and the integration of new ideas and concepts to improve consumer experience and also integrating a cost consciousness (Tarnovskaya & de Chernatony, 2011). Brand internalisation interacts with culture in three main ways: 1. Brand conceptualisation 2. Brand comprehension and 3. Activation of brand (Baumgarth & Schmidt, 2010) Through this process, a firm is able to convert is core competencies and core brand identity and brand culture into practical elements and aspects of affairs in order to attain gains in its quest for brand equity (Brunyé, et al., 2011). This is done by internalising the brand’s concepts and ideas in order to deal with business processes through the utilisation of the brand idea and core culture of the process. In terms of conceptualisation, IKEA’s brand is known for simplicity and meeting realities as well as leadership by example. There is a process through which IKEA uses “culture as clay that puts together the company” (Tarnovskaya & de Chernatony, 2011). This is a process through which the company’s core value of creating a better life of people is always handled and utilised. The company’s brand in shops is under a strong and a strict corporate control which is highly responsive to an emergent strategy that guides the conduct of the different workers in the IKEA. Comprehension of a brand is about a way through which a firm’s workers and employees accept a given pattern of activities and processes as normal and use it to achieve optimal results (Aiello, et al., 2009). In IKEA, they view culture as a major issue and it is carried out significantly all the time and at different situations and contexts. The values are strong and they are formalised in all stakeholder activities and processes. However, after it is instituted, there is the utilisation of these ideas to carry out responsibilities. Each year, IKEA conducts surveys to carry out a deep and thorough analysis of the state of affairs of the brand and its related achievements in the processes of the firm. Brand Identification and the activation of brands is where a brand understanding is achieved by employees and applied in the work conditions and activities (Vrontis & Thrassou, 2013). In IKEA, brand identification and activation is carried out when local market’s ideas and concepts are integrated into the activities and affairs of the global IKEA brand to local activities. This is presented through the interpretation of the brand in the local context. The local employees then blend into the ideas of shared values and brand communication of IKEA in order to achieve strong and appropriate results through collective high performance and informal activities throughout the firm. This includes the identity recreation of a firm, managerial sense-making in the local context, brand identity reinterpretation and reactivation, re-adaption of the business processes and the employee achieving a sense of results. International Human Resource Management One of the simpler definitions of international human resource management states that it is an approach through which a firm applies the arts and science of human resource management to control affairs in international branches of a global firm, through a system that is sensitive to the cultural system of each of the branches a firm operates within (Cornelius, 2013). International human resource management uses scientific methods and approaches to recruit and select, train and develop, motivate, lead and evaluate the staff of an organisation throughout its branches and units around the world (Stahl, et al., 2014). Another perception indicates that IHRM is a process through which a firm consistently applies its systems of human resource practices and processes to different niches and different units of its international branches and units (Schuler, et al., 2010). Therefore, IHRM is a strategic system through which a scientific and structured method is replicated within international branches of an organisation to properly recruit, select and train employees who will act as a tool for operation and the achievement of strategic goals and targets (Laurent, 2009). “International HRM is the process of managing people across international boundaries by multinational companies. It involves the worldwide management of people, not just the management of expatriates” (Armstrong, 2014, p. 104). This indicates that HRM is a process through which a firm like IKEA can integrate its processes and systems that can be used to internalise and optimise the brands and processes of the company across countries within which it operates. Application of IHRM to Brand Internalisation of IKEA in Russia and China Russia and China are countries that were modelled in communist and socialist national models for most of the 20th Century (Liebert, et al., 2013). The idea of Communism and Socialism is that all the major entities in the country will be expropriated by the sovereign government of the state and people will be given benefits in return for their contribution to the country. Due to this, the ideas of profitable businesses, competition and revenue maximisation idea of running the economy is very limited under these regimes. Years after Communism in its strict forms were ended in these countries, the culture of producing for profits and respecting consumer sovereignty through competitive practices and better results have not been great in Russia and China (Zientara, 2011). Therefore, IKEA’s expansion and attempts to grow in these two markets is bound to face a number of challenges and limitation which includes amongst others: 1. Unfamiliar employee base that is not aware of branding and the question for competitive advantage; 2. Employee base that is not focused on achieving profits through customer loyalty because loyalty has always been based on devotion to state-owned entities; 3. The tendency for management to resort to propaganda to look good in the public eye, instead of seeking consumer sovereignty and pursuing it; 4. A market which is used to getting cheap mass-produced products and services from state-owned firms. Therefore, there is the need for international human resource management techniques to be instituted and applied in such a way and manner that will ensure that IKEA recruits the best and trains its staff members to meet the best and the highest and most optimal standards and regulations. The main vision and mission of the human resource system should include the creation of a unique identity and system that will help to make managers more sensitive and reactivate the IKEA brand and ideas and also modify the processes and systems. Therefore, the following pointers in IHRM are essential and must be integrated into IKEA’s operations carefully to meet its fundamental vision. Recruitment and Selection IKEA will have to apply recruitment and selection processes that are utilised in its international and western branches. However, the recruitment and selection process must be modified to attract and retain flexible managers and leaders who are ready to learn and relearn about new things in the capitalised world. To this end, the job evaluation of the slots must include the need for cultural flexibility and operational broadness. This should appear in the person specification for top positions and jobs. Based on this approach, there must be the advertising of positions and the interviews must be such that candidates who can fit into the new processes and systems should be encouraged to gain places in the company. Training and Development IKEA will have to embark on a new recruitment and selection process that will streamline the firm Recruitment and Selection Training and Development Survey of the process Motivation and Leadership Values and Processes Integration Performance Measurement Retraining International Human Resource Management Principles Application of IHRM Principles to IKEA Case Case 2. Internalising a brand across cultures: the case of IKEA Read More