Altomi Associates: Developing an International Human Resource Management (IHRM) Strategy - Essay Example

?Altomi Associates: Developing an International Human Resource Management (IHRM) Strategy Introduction One of the few sure things in this unsure and unstable world is the increasing pressure of globalisation on businesses. There is a growing number of globally operating companies and globally operating workforce. The field of international human resource management (IHRM) is becoming ever more vital for more and more businesses. This essay presents a proposal for Altomi’s IHRM strategy. The proposal focuses particularly on the implementation of an appropriate approach to IHRM strategy and transferring HR policies and practices from the UK to the various BRIC—Brazil, Russia, India, and China—countries. The proposal is divided into three sections, namely, short-term aims, medium-term aims, and long-term aims. Short-Term Aims Numerous of the most challenging and essential aspects of international human resource management (IHRM) planning arise from cultural differences between countries; usually, these differences conflict. Hence, one of the most difficult challenges that Altomi will face in its internationalisation efforts is managing cultural differences in the four countries where it plans to do business. Culture is one of the factors that balance the difference between international and domestic HRM. Numerous unsuccessful businesses in the global arena are because of lack of cultural knowledge and an assumption that ‘what works at home will work here’ (Regis, 2008, p. 169). As stated by Geert Hofstede, there are five cultural dimensions, namely power distance (e.g. hierarchy, status), uncertainty avoidance, individualism-collectivism, masculinity-femininity, long- or short-term orientation (Paul, 2008, pp. 155-157). Altomi has to thoroughly evaluate these cultural factors to determine which HR processes they can transfer to BRIC and which have to be modified so as to survive and succeed in the new market. A knowledge and appreciation of the host country’s cultural standards, an understanding of the differences alongside enthusiasm to learn and distribute knowledge or information to the Associates of Altomi in BRIC, can largely determine the success of the business. Numerous of the HR policies, operations, and practices of Altomi will be much affected by the culture of BRIC. For example, in China there is much importance given to unity, honour, and integrity; performance evaluations in China are somewhat different from the UK as evaluators will not be eager to make a negative evaluation of an employee because it could possibly damage the relationship between the employee and the manager (Steers, 2006, p. 135). In Brazil, Russia, India, and China according to Hofstede’s study, power distance is high. This means that these societies value inequalities and hierarchies (Steers, 2006, p. 135). Thus, Altomi should designate a superior for their Associates in these four countries, someone who will assume full responsibility and exercise absolute power. In terms of uncertainty avoidance, Brazil and Russia value conformity to legal systems and rules. These societies desire high bureaucracy and impose rigid obedience to rules to avoid uncertainty. Altomi should make sure that rules are properly established and followed in their Associates in Brazil and Russia. On the contrary, India and China are open to risks or uncertainties (Steers, 2006, pp. 135-136). These societies are not afraid of imperfections or deviations from established rules. They prefer adjusting to the situation, and dislike rigid obedience to rules. Altomi’s Associates in India and China may benefit from more open employment terms and conditions, and encouragement of suggestions and feedback from employees. Altomi has to learn to address global issues like doing and negotiating business abroad, and recruiting and training employees in other countries. As people acquire skills to cope successfully with various cultures, they normally should undergo a process called ‘development of cross-cultural competence’ (Briscoe & Schuler, 2004, p. 119). *image taken from Briscoe & Schuler, 2004, p. 119 Other cultural factors that Altomi should take into account are BRIC’s political stability, their economic status, and legal standpoint. The company should be especially cautious in countries with prevailing religious ideals, like India and China, and thus have twofold religious and civil standards. This suggests that legal conditions and contracts may not be as obligatory in these countries because of the religious codes dominating the legal structure (Hall & Hall, 1990). Individuals’ diverse behaviour, perceptions, and values are seriously vital to the success of all areas of global business, such as staffing, training, performance evaluation, negotiation between companies from various countries, management of employee performance from various countries, and cross-cultural relations (Terjesen, 2005). This section has discussed the notion of global and national culture and talked about its significance to successful IHRM and global business operations. Differences in culture affect IHRM and global business that eventually make them a lot more complicated and challenging. Altomi and its Associates’ managers have to identify, understand, and appreciate these cultural differences and skills in coping within these diverse cultures. Medium-Term Aims As stated in the case description, “the medium-term aim of Altimo is to establish Associates in BRIC, either as new start-ups or by acquisition of local training service providers, or possibly through joint ventures with local training companies”. However, Altimo would benefit more from acquiring local training service providers due to the substantial cultural differences between the UK and BRIC. Selection is the very first issue that Altimo will face in its effort to expand globally. Its objective is to screen job candidates and hire those who seem eager to perform their duty according to the company’s objectives. Through the process of selection, Altomi Associates should recruit people who have the necessary knowledge or skills, will conform to the company’s policies, and will carry out their jobs adequately (Doving & Nordhaug, 2010). In the perspective of Altomi’s internationalisation, a number of important HRM concerns occur, like the need to make sure that local training service providers fulfil global, not just local, corporate goals. Furthermore, consider an Associate that has to recruit workers. At this point, the representative of Altomi may create and depend on a group of diverse subjective standards for selection. Ultimately, Altomi’s representative may decide to implement a particular value examination to make sure that the values of applicants are aligned to that of the company (Robers, Kossek, & Ozeki, 1998). Hence, a thorough process for selecting Altomi’s representative that will orient the Associate or local training service provider may be appropriate or needed as a control instrument to guarantee the integration of IHRM strategy all over Altomi Associates. However, Altomi can depend on selection only to a certain degree, and then, it should depend on training to pass on the needed knowledge, values, and skills. Training offers members of an organisation the needed knowledge, values, and skills to be useful in the organisation. Similarly, socialisation also helps align HR planning with business strategy through an interpersonal process of communicating behavioural expectations and corporate ideals to members of the organisation (Tayeb, 2005). Thus, Altomi may implement training and socialisation as the main mechanism for employee training. Its objective is to make sure that potential employees and managers fully understand the behavioural expectations and organisational culture before performing their duties in an Associate. Furthermore, it is widely accepted that employee development practices have to highlight global information dissemination on market, technological, political, social, and economic patterns (Tayeb, 2005). To make this happen, Altomi may transfer UK development and training methods to BRIC for the local workforce or it may transport local employees to the UK to familiarise them to Altomi’s business culture and allow them to acquire a wider viewpoint. Moreover, one method of preventing control issues is building shared ideals and objectives, and a sense of cooperation among the local training service providers across BRIC and the UK. Nevertheless, this involves high costs for trainings, conferences, and communication. Personal communication, like face-to-face interaction and telephone calls, works as the most effective type of communication between the parent company and associates (Harvey, Speier, & Novecevic, 2001). For this reason, training and socialisation makes the integration of IHRM strategies possible. On the other hand, there should also be an understanding of local demands and the importance of providing career development and training opportunities for local employees and UK nationals in BRIC. Hence, training requirements have to be offered to local employees to allow them to understand how the Associates work and to acquire the abilities need to perform their duties well. If possible, Altomi should provide training to UK nationals in BRIC about the business practices, social norms, religious beliefs, economy, politics, and culture of the host country. However, the most useful control instrument that Altomi may use for its internationalisation efforts is bureaucratic control. Bureaucratic control affects how individuals perform their job, rather than the incentives or rewards they get for performing it. Bureaucratic control is shown when a parent company has some influence on the activities of an associate mainly through a definite set of processes and policies (Dowling, Festing, & Engle, 2008). Standard operating procedures (SOPs) are the core component of this form of control mechanism. SOPs, which are usually specified in company handbooks, summarise the behavioural norms that organisational members are to follow (Dowling et al., 2008, p. 41). A training company like Altomi will certainly benefit from bureaucratic control because as previously mentioned BRIC are high in power distance or desire hierarchy in the organisation. For this reason, it can be safely assumed that bureaucratic control mechanism of local training service providers in BRIC facilitates integration of IHRM strategies all over Altomi Associates. Long-Term Aims As stated in the case description, “The longer-term objective is to focus on providing training services to multinational organisations across those organisations’ international operations”. Altomi’s international HR managers should be aware of and understand the global competence of the prospective candidates. It is important that the employees of Altomi Associates are familiar with the nature and functioning of global business. Obviously, Altomi should maintain global experience and awareness as conditions in the process of recruitment and selection (Tayeb, 1988). In addition, the global HR manager should have an accurate understanding of the abilities and availability of workforce in BRIC. Altomi’s HR department should be able to predict the fluctuations in these economies and take advantage of such changes effectively. Although cultural differences affect the recruitment and selection process, as well as development and training, companies have a tendency to adhere to the same procedures and standards worldwide. This is because the goal of any selection and training is to select and train the most competent individuals for the task (Stehle & Erwee, 2007). The selection and training standards for global employment normally focus on the five central domains of personality, motivation, abilities, perceptions, and behaviour. More particularly, the emphasis of selection and training for global activities usually involve language competencies, country-specific knowledge and experience, technical skills, well-developed communication abilities, and cultural flexibility (Stehle & Erwee, 2007). Companies across the globe normally view work experience, technical skills, communication skills, and personal interviews as major areas of training and selection (Paul, 2008). Therefore, Altomi should hire and train workers for global activities who have goal-oriented attitudes, adaptability, high motivation level, knowledge and appreciation of other cultural values and behaviour, strong communication and language competencies, and high level of technical abilities. Altomi may also use international assignments to develop their global team of trainers. International assignments have been known as a key strategy for building global competencies. The usual outcomes are organisational and management development (Regis, 2008). As regards management development, employees acquire global experience, which boosts career growth, whilst the multinational company benefits through creating a group of experienced and skilled global employees. In terms of organisational development, international assignments offer global companies a means to build up reserves of skills and knowledge which it can draw its future progress. A global approach is a key by-product, as important employees acquire a wider perspective (Briscoe & Schuler, 2004). Moreover, as mentioned earlier, Altomi’s representatives are mediators of socialisation and control mechanisms, and facilitate skill and knowledge transfer. The global assignment usually is the ‘training ground’ for the global workforce. Global teams can be created from people who have had global experience, although the global assignment itself could build global team, or an assignment to a global team (Steers, 2006). Altomi Associates would gain from using global teams as a way of encouraging innovation, knowledge transfer, and organisational learning; and, as a way of surpassing national borders, improving the process of information dissemination and communication. International assignments are also a way of building collective ideals, hence facilitating the exercise of informal control via socialisation; a way of building a global approach; and a way of transforming varied outcomes into strategic evaluations, problem solving, and decisions (Terjesen, 2005). Altomi Associates should be capable of providing the support and resources for their local employees and global teams. For instance, Altomi managers directing global teams should have to gain broad knowledge of group dynamics, particularly how cultural differences influence group performance. There are several developing and progressing trends in global development and training that will definitely challenge Altomi’s internationalisation efforts. Above all, even though the demands of globalisation keep on pushing multinational companies towards a consolidated model of development and training, there is a persistent demand from numerous countries for localisation of development and training programmes of which Altomi should be aware of (Dowling et al., 2008). Moreover, there is an increasing awareness that even though globalisation is having a serious effect on corporate activities and related development and training attempts in multinational companies, there is proof that for competence training and development, it remains vital to take into account the effect and significance of national institutions and culture on these attempts (Roberts et al., 1998). Furthermore, with the emergence of China as a powerful economy, there is growing concern for all facets of development and training with an emphasis on China. Lastly, there is an increasing awareness that international human resource management should deal with national and global contexts (Stehle & Erwee, 2007). All of these challenges should be thoroughly taken into consideration by Altomi Associates, especially if they want to succeed in their internationalisation attempts. Conclusions There are numerous IHRM strategies that are available to Altomi Associates in order to succeed in their efforts to expand their operations in Brazil, Russia, India, and China. The most appropriate business strategy for the company is acquisition of local training service providers due to the considerable cultural differences between the UK—the home country—and the proposed host countries—BRIC. The IHRM strategy of Altomi has three domains, namely, short-term, medium-term, and long-term aims. Short-term aims refer to the cultural control mechanisms that Altomi can use to develop the cultural competence of their local employees and global team of expatriates. Medium-term aims refer to the IHRM strategy of establishing a stable global presence by acquiring local training service providers. This strategy involves selection, recruitment, and bureaucratic control. The long-term aims refer specifically to selection, training, and development of local employees and the global team. This strategy includes international assignments as the most effective training and development approach for Altomi. But besides formulating these aims, Altomi should also take into consideration the various challenges posed by globalisation in order to fully survive or succeed in the global arena. References Briscoe, D. & Schuler, R. (2004) International Human Resource Management: Policy and Practice for the Global Enterprise. London: Routledge. Doving, E. & Nordhaug, O. (2010) ‘Investing in Human Resource Planning: An International Study’, Management Revue 21(3), 292+ Dowling, P., Festing, M., & Engle, A. (2008) International Human Resource Management: Managing People in a Multinational Context. Mason, OH: Cengage Learning. Hall, E.T. & Hall, M.R. (1990) Understanding Cultural Differences. Yarmouth, Maine: Intercultural Press. Harvey, M., Speier, C., & Novecevic, M. (2001) ‘A theory-based framework for strategic global human resource staffing policies and practices’, The International Journal of Human Resource Management 12(6), 898-915. Paul, J. (2008) International Business. New Delhi: PHI Learning Pvt. Ltd. Regis, R. (2008) Strategic Human Resource Management and Development. New Delhi: Excel Books India. Roberts, K., Kossek, E., & Ozeki, C. (1998) ‘Managing the Global Workforce: Challenges and Strategies’, Academic Management Perspective 12(4), 93-106. Steers, R. (2006) Managing in the Global Economy. New York: M.E. Sharpe. Stehle, W. & Erwee, R. (2007) ‘Transfer of Human Resource Practices from German Multinational Enterprise to Asian Subsidiaries’, Research and Practice in Human Resource Management 15(1), 1+ Tayeb, M.H. (1988) Organisations and National Culture: A Comparative Analysis. London: Sage Publications. Tayeb, M. (2005) International Human Resource Management: A Multinational Company Perspective. Oxford, England: Oxford University Press. Terjesen, S. (2005) ‘International Human Resource Management: A Review of Three Texts/ International Human Resource Management/ International Human Resource Management: Managing People in a Multinational Context/ Human Resource Management in Europe: Evidence of Convergence?’ Management Revue 16(1), 140+ Read More