International Human Resource Management - Literature review Example

INTERNATIONAL HUMAN RESOURCE MANAGEMENT Name Professor (Tutor) University Course City and State Date INTERNATIONAL HUMAN RESOURCE MANAGEMENT Increased communication and mobility between nations has led to more organizations operating at international levels. Operation at international levels leads to the organizations acquiring major tasks especially management of differentiation and integration of the business to specific aspects of the various nations they operate in. The international human resource comes in to deal with these tasks. A small difference exists between international human resource and the normal or domestic human resource, but this difference is what separates success from failure in the organizations. The small difference is about the unpredictable and risky nature because of external factors and thus leading to increased functions. Various definitions of international human resource exist, but generally, Brewster et al., (2011) define IHRM as a branch of management that studies the impacts and design of organizational human resource across different cultures or in different global market environments. International human resource management (IHRM) is essential in solving the global market issues. The main functional areas of IHRM include performance evaluation, training and development, selection and recruitment, labor issues, and remuneration of employees. The international method of human resource management can be performed using several procedures. Sengupta and Bhattacharya (2007) developed the steps as an understanding of the parent organization; secondly, the parent organization needs to have a clear understanding that its management ways are not better or worse than other organizations when put into the global weighing scale. Thirdly, the parent organization also needs to know that its international subsidiaries need different management techniques that suit that country. Next, is the parent organization putting in place measures to ensure preparedness, and lastly, development of creative and effective management techniques to suit different cultures in the global market. IHRM as expected faces challenges including political systems, economic systems, technological factors, cultural differences, and human capital (Evans et al., 2011). Cultural differences arise due to the diversity of culture and environment in the different global markets. The quality of international relationships is extremely essential when it comes to managing cultures where it is the people that are emphasized. Most organizations today have been putting emphasis on culture since culture provides a foundation for values and performances of the organization as it determines the behavior of the employees. The cross-cultural differences that exist between different nations offer a great challenge to global organizations as different strategies have to be put in place to manage these cultural differences. Working with different people from different cultures can be a major challenge as this means that an organization has to adapt to new styles of management including new social practices and communication techniques. For example hiring employees from England and the United States in the same organization is not easy. This is because employees can have different ideologies of management of employees and the running of different processes that need technology. Cross-cultural differences is a major social challenge especially since some employees working in foreign nations can have a problem with the culture in that nation and this will affect his or her performances in the organization. Besides, culture differences can also hinder how organizational culture is strategized to allow the company to meet its objectives. How an organization will set up its organizational culture will differ in the different substituents of the organization that is located in different nations of the world. Culture difference is, therefore, the main social issue when it comes to challenges faced in international human resource management of global organizations (In Machado, 2015). Human capital is involved with the training and development of employees. Training and development include aspects such as meetings, in houses seminars, and external training that are designed to provide knowledge and skills for international application for the employees. Training and development can be hard first without all employees knowing the international language of a certain country. It is important that human resource management of global companies provide language classes to allow employees work in different nations that have branches of a certain organization. Human capital also entails family adjustments that are needed in case an employee is sent to work in a foreign country. Language classes are needed mainly because communication barrier is a major problem. Communication is an important part of the human resource department of the organization since without effective communication it would be difficult to achieve or fulfill the desired organizational or personal objectives. Apart from being an issue that concerns the organization, communication is also an important part of the human being social life, and in case there is a language barrier, it can be hard for employees to interact with locals in a foreign nation. Isolation can make an employee’s social life hard, and this will affect his or her performances in the organization. Human capital will include all the expenses a company has to incur in the process of going global. It is expensive to train and develop employees for international organizations, as there is a need for employees to attend global seminars, which are very expensive concerning accommodation and transport. Overall, human capital creates a major challenge for global organizations, as there is need to train and develop employees to suit the foreign markets. The political system or set up of foreign nations is another aspect that challenges international human resource management. External constituencies including how the foreign governments are set up affect international Human Resource Management. Issues such as political instability in the foreign countries affect how IHRM is set up for companies that operate globally. Political instability being one of the characteristics affects the economic growth of global organizations in their specific markets (Festing, 2008). For example, India and Brazil's political conditions are democratic but all the same, they remain a risky aspect of globalization. Social and political conflicts in China also makes the country a high-risk global market politically. Another political issue affecting IHRM is the high levels of volatility. This is related to local issues in the markets rather than global issues. The volatilities can originate from local events, natural disasters, and political instabilities. A good example that can be used is Brazil, which suffered from hyperinflation in Latin American countries. Economic reforms by foreign countries is a disadvantage politically as these reforms are put in place by those governments. In summary, political systems in foreign governments is a major aspect especially in influencing the way, which global organizations set up their human resource management strategies. Technological factors are the levels of technological developments that are available in different nations. Because of these technological differences, organizations will often have different set ups in different countries. For example, countries that are still developing put lower investments in technology and this will need organizations to develop their technologies that will affect the human resource. Technology is related to the human resource through aspects such as the transportation of employees to the company premises. Poor infrastructure for example roads will affect the employee and company performances as employees will often arrive to work late. Issues such as technologies used by employees for research are also important. The difference between developed and developing countries concerning this aspect is very big. For example, Science researchers in the United States were at 4000 in 2010 compared to about 1200 in China and about 700 in Brazil. This shows that the development of technology in the United States allows more researchers to be conducted in organizations that are dependent on technology for their researchers. Economic systems include aspects of economic growth. Economic growth rates are different in countries, and this is a challenge to IHRM in several ways. The economic growth of a country will be an important determination of the revenue by the companies, and this will, in turn, determine how employees are paid and remunerated. The branches of organizations pay employees differently, and this is the challenges faced by IHRM. Branches in high economic growing countries are paid more compared to those working in branches located in low GDP (Gross Domestic Product) countries. In response to the international Human Resource Management challenges discussed above, organizations need to put in place strategies to deal with the challenges. Some of these strategies include. Staying within the law and following all the rules and regulations that are set by the foreign political scene especially governments. It is important for organizations to have a comprehensive understanding of all the laws and regulations of hiring and maintenance of employees. The laws and rules regarding employees vary from nation to nation, and global organizations should be strategically placed so that they know and understand these rules in the countries that they are operating in (Regis, 2008). For example, laws in Indonesia do not recognize part time working that have the same rights as a full-time working. It is, therefore, important for international organizations to keep up to date with the changing political scenes regarding labor laws of the different nations. Organizations can deal with the challenge of cultural diversity by strategically preparing for the future and identifying skillful employees locally. Educating future leaders by providing them with knowledge on how to take advantage of the cultural differences is a major way international organizations can overcome this challenge (Dowling et al., 2008). Cultural diversity can become advantageous for global organizations by improving the processes of decision-making and problem solving because every individual brings unique experiences and ideas. International organizations should also look to identify extra skills that are not presented by the employees in their CV’s when entering new global markets and this will go a long way in providing the organization with a competitive advantage over its rivals. Human capital challenges can be dealt with through strategic corporate decision-making. Proper decision making concerning workforce and the complex issues that are involved in the workforce can be dealt with through early identification (Cooke, 2002). After being identified early, effective training and development can be provided for the employees to improve the organization’s functionality. Provision of language classes to allow for communication of individuals within the organization and in the outside world is also essential. Employees that know different languages are essential to organizations, as it will improve the communication process thus giving the organization advantage competitively. The strategies discussed above are essential as they improve the performances of global organizations through several ways. One is the improvement of the skills, knowledge, and abilities of employees. When employees of an organization are skilled, the organization will able to emerge on top regarding performance when compared to its competitors in the same market (Perkins et al., 2006). Besides, the attitudes and motivation of employees will be increased allowing them to perform at top levels earning and the maximum organization revenues. Another way is through good working conditions with the foreign governments that ensure the operations of an international organization are run smoothly in different locations around the world. When the operations conducted smoothly, the company becomes effective and efficient, and this provides it with a competitive advantage over its rivals in the same market. This advantage leads to high revenues for the organization. In conclusion, International Human Resource Management of global organizations face major challenges. Some of these challenges as discussed are political systems, economic systems, technological factors, cultural differences, and human capital. However several strategies can be put in place to deal with the challenges including organizations Staying within the law and following all the rules and regulations that are set by the foreign political scene especially governments. Educating future leaders by providing them with knowledge on how to take advantage of the cultural differences is a major way international organizations can overcome the challenge of cultural differences. Finally, strategic corporate decision-making can be used to deal with human capital challenges. These strategies are essential as they improve the performances of global organizations. References Brewster, C., Sparrow, P., & Vernon, G., 2011. International human resource management. London: Chartered Institute of Personnel and Development. Cooke, W. N., 2002. Multinational companies and global human resource strategies. Westport, Conn: Quorum Books. Dowling, P., Festing, M., & Engle, A. D., 2008. International human resource management: Managing people in a multinational context. South Melbourne, Vic: Thomson. Evans, P., Pucik, V., & Björkman, I., 2011. The global challenge: International human resource management. New York: McGraw-Hill Irwin. Festing, M., 2008. Current issues in international human resource management and strategy research. (Current Issues in International Human Resource Management and Strategy Research.) München [u.a.]: Hampp. In Machado, C., 2015. International human resources management: Challenges and changes. Perkins, S. J., Shortland, S. M., & Perkins, S. J., 2006. Strategic international human resource management: Choices and consequences in multinational people management. London: Kogan Page. Regis, R., 2008. Strategic human resource management and development. New Delhi: Excel Books. Sengupta, N., & Bhattacharya, M. S., 2007. International human resource management. New Delhi: Excel Books. Read More