Effective Recruiting and Selecting for the International Business - Winch-It Company - Case Study Example

Title: Portfolio Report on International Human resource Management: Winch-It Case Study Name: Unit: Date: Table of Contents Table of Contents 2 List of figures 4 Executive Summary 1 1.0. Introduction 2 3.0. International StaffingOptions 4 Advantages 5 Advantages 5 4.0. Effective Recruiting and Selecting for the International Business 6 6.0. Conclusion 8 References 8 List of figures Figure 1.0…………………………………………………………………………………….4 Figure 2.0…………………………………………………………………………………….5 Figure 3.0…………………………………………………………………………………….5 Executive Summary Many organizations today operate in a global economy that is characterized by turbulent,dramatic and rapid changes. These changes have accelerated the speed at employees carry out their work. These changes affect the way employees and organizational leaders relate throughout the change process. Most prominent changes in the global economy include diversity, networking, and flexibility (Kates& Galbraith, 2013). The economic changes such as diversity, which Winch-It is intending to engage in can create dysfunctional in the organization if not well managed. Asthe organization seeks to diversify its operations on an international basis, good coordination between the organization and the people is required. A strategic human resource policy should be outlined to ensure that the organization responds to the contemporary international environment, organization profitability and human resources. This report seeks to establish the best organizational structure for the organization’s transformation from a domestic market into the international market. The report will outline practicabilityof managing, appointing, rewarding and assessing employees the human resource policy adopted should be that which fosters employee commitment and cost effectiveness (Harzing&Pinnington, 2011). 1.0. Introduction The Winch-It company started as a family company founded by two brothers. Who started by making inexpensive but efficient hand powered winches during the Second World War. During the start the organization used locally made materials due to lack of imported products. In the 60’s and 00’s the organization saw increased demand for their winches from both the domestic and military markets (Harzing&Pinnington, 2011). The organization today is seen as an original equipment manufacturer for both winches and boat trailers. Over the years, the organization has gained confidence from their local customers. The organization grew to see the first initial public offer into the market.The board of directors want the organization to seek market oversees.As the organization extends its operations to overseas markets it will encounter complexity in decision making in addressing local and global product design, cross border financing, local responsiveness to the individual market .Therefore, as the company decides to go international it also needs a reorganization structure that will be able to place the organization in a position to fully take advantage of opportunities and handle demand in the international market (Bell, 2008). 2.0. Organisational Structure for Overseas Operations The best and the simplest organization structure for Winch-It to adopt as it penetrates the international market is international division. The organization structure will undergo various changes as the organization transforms from a domestic to an international one. International division will enable the organization to accommodate international operations without interrupting home market. According to Katesand Galbraith (2013), international division is not only effective for larger corporation but it is also best suited for small organizations such as Winch-It that seeks to rapidly grow international business. International division allows the organization to focus on the home market while the international division focus on overseas operations. However, international division structure may bring about the difficulty of managing the organization. The management of the organization may result in dichotomous system of management. The management may get preoccupied with the home market more than the international market (Bell, 2008). As the organization becomes more serious with the international market, the organization should adopt a more complex global structure such as global functional structure. Global functional structure is the most appropriate organization structure for Winch-It as it does not have many product lines. Under this structure, a group chief executive officer is appointed to monitor a number of organization functions that are vital to the organization operations. Since the organizations products are minimal, the chief executive officer can be able to coordinate work functions. The main advantages of global functional structures include expertise maintenance among employees, standardization of organization, procedures, practices and policies, andenjoyment of economies of scale. For example, economies of scale are easier to achieve by grouping resources by functions. For example, the chief executive officer can centralize human resource function that conducts all employee evaluation, pay and rewards as well as selection and recruitment of employees. The main challenges of adopting the global functional structure is that too much focus on organization functions distracts organizations attention to product requirements,geographic idiosyncrasies, and customer needs. This may happen because the management may not be able to foster a close relationship with the local customers (Cherunilam, 2010). Organization functions Figure 1.0: showing the global functional structure (Harzing&Pinnington, 2011). 3.0. International StaffingOptions Winch-It can use various approaches in managing employees in the global environment. How the organization will select,recruit, pay,promote, and train employees overseas will depend with organizations culture. The organization can opt to treat employees in a culturally appropriate manner yet maintain equitability. When the organization decides to send one of their managers to manage their business overseas it means that the organization emphasizes more on the functions of training, development and training (Harzing&Pinnington, 2011). The organization will thentrain the manager on the foreign language provide for the residence of the manger and ensure general welfare of the manager’s family. The main approaches to staffing options include ethnocentric staffing, polycentric staffing and global or geocentric staffing. Ethnocentric staffing allows the organization to have employees form home headquarters to make important organization decisions. Employees from home headquarters hold the most important jobs in the organization.In polycentric staffing, a local manger heads the international division. The local manager heads the division because the organization believes that the home employees do not have the necessary local knowledge and expertise to manage the local business.Global or geocentric staffing option employs a strategy that employees from different countries. Advantages Disadvantages 1. Reduced labor costs 2. Increased acceptance of the organization by the locals 3. Maximized number of opportunites in the local foreign environment 4. Increased recognition of the organization as an active participant in the local foreign economy 5. represents local consumer constraints and considerations in the key decision making process 1. It is hard to balance global priorities and local demands 2. Makes it hard to recruit andselect qualified personnel 3. Leads to reduction of the level of control exercised by home headquaters Figure 2.0: showing advantages and disadvantages of employing local employees in international divisions (Cherunilam, 2010). Advantages Disadvantages 1. Allows cultural similarity with the home organization that enables transfer of home management practices 2. coordination and closer control of international division 3. provides employees with an international orientation through experience at home organization 4. Establishes selection and recruitment of internationally experienced personnel 1. Causes problems of adaptability to local culture and environment 2. Creates “foreigness” of the international divison 3. involves high salary costs and transfer costs 4. Results in family and personal problems 5. Acts as a disincentive on local management motivation and morale 6. Involves many foreign government restrictions Figure 2.0: showing advantages and disadvantages of employing expatriate employees in international divisions (Cherunilam, 2010). The best approach that Winch-It Company can apply is geocentric approach in staffing. Geocentric staffing enables the organization to employ the best employees from the headquarters as well as from the local environment. By employing geocentric staffing approach, the organization will be consistent with the world wide practices today. 4.0. Effective Recruiting and Selecting for the International Business Recruitment and selection is the process of taking in new members into an organization.Recruitment is the process of appealing to qualified individuals to apply for vacant positions in an organization. Selection involves choosing the best suited individual for the vacant position. For effective recruitment and selection of qualified personnel the organization can classify employees into parent nationals, host country nationals and third country nationals(Dowling, 2008).Since the organization uses geocentric staffing approach classification of employees will enable to the organization to determine which individual is best suited for the job available. Geocentric staffing approach employs the best individual regardless of the nationality. In selecting the right individual for the job, the organization must strike a balance between sensitivity to local labour laws practices and internal organization practices. While hiring, the organisation can focus on talents, knowledge, and skills. The organization should also consider family background, age, personality, culture and gender in selecting the most suitable employee for a vacant position (Punnett, 2013). 5.0. International Payand Reward Strategies Pay is the main source of living for employees. Benefits include a package that comes with the pay such as medical cover, holiday incentives among other benefits. The employer needs to come up with remuneration strategies that minimise expenses of the organization but at the same time reflects on the profitability of an organization (D'annunzio et al, 2004). The employer need to offer remuneration that offers the organization a competitive advantage in the labour market in order to attracted qualified employees. The employer also needs to offer attractive rewards that help to maintain and retain employees in the organization. The two most common strategies that Winch-It Company can use include comparability remunerationand strategy. Comparability involves analysing the employee’s competitiveness and comparability within the marketplace. For example, the salary of a senior manager needs to be set higher than that of the supervisor. With the comparability method it is sometimes difficult to evaluate the employee competitiveness in the market as business environment vary from time to time. Cost approach is the second strategy. This helps organization minimizepayroll expenses which are the largest expense in an organization. These strategies are greatly challenged by the foreign labour market situations such as prevailing rules, laws and regulations. Another challenge is the influence of the prevailing global salary and wage rate and availability of qualified personnel (Dowling, 2008). 6.0. Conclusion International management of human resource requires an organization to focus on human capital on a global perspective. The organizational structure used by an organization in the internal business consequently affects human resource management. The approach used in staffing international business influences management functions such as recruitment and selection, development and training, benefits and remunerations as well as labour relations.A company that undertakes a global or geocentric approach in staffing develops human resources management practices for the whole world to use (Stahl et al, 2012). References BELL, S. (2008). International brand management of Chinese companies: case studies on the Chinese household appliances and consumer electronics industry entering US and Western European markets. Heidelberg, Physica-Verlag. CHERUNILAM, F. (2010).International business: text and cases. New Delhi, PHI Learning Private Limited. D'ANNUNZIO-GREEN, N., MAXWELL, G. A., & WATSON, S. (2004). Human resource management: international perspectives in tourism and hospitality. London, Thomson. DOWLING, P., FESTING, M., & ENGLE, A. D. (2008).International human resource management: managing people in a multinational context. London, Thomson Learning. HARZING, A.-W., & PINNINGTON, A. (2011).International human resource management. London, SAGE. KATES, A., & GALBRAITH, J. R. (2013).Designing your organization using the star model to solve 5 critical design challenges.San Francisco, Calif, Jossey-Bass. http://rbdigital.oneclickdigital.com. PUNNETT, B. J. (2013). International perspectives on organizational behavior and human resource management. New Delhi, PHI Learning Private Limited. STAHL, G. K., BJÖRKMAN, I., & MORRIS, S. (2012). Handbook of research in international human resource management.Cheltenham, UK, Edward Elgar Pub. Read More