Contribution of International Resourcing and Talent Management Strategies - Assignment Example

International Resourcing and Talent Management Table of Contents Introduction 2 Culture 3 Cultural Dimensions 4 International Selection 5 Training 9 Political and Legal Environments 12 Economic Environments 13 Conclusion 13 Reference 15 Bibliography 18 Introduction Extensive debates have been based around the context of comparative analysis of human resource systems. It is needful to combine the different insights with work activities in the field of international human resource management on the firm level motivation to standardize, optimise and export human resource models of overseas countries where the firm operates. A wide variety of changes have been wrought on the various IHRM functions in the context of recruitment, international resourcing, careers and management development and even rewards systems through the process of globalization highlighting particularly on the differences between the globally optimised, standardised and localised human resource processes. Thus it is importance of have an understanding of the diverse cultures in which the multinational corporations operate. Considering only the national culture and designing HR activities pertaining to the same is no longer considered a suitable option for organizations. Competitors considering a diverse and multiple cultures are more likely to have an extra edge over them in the global market. One of the major objectives of the HRM function is the mobilization of a workforce which comes from different cultural backgrounds and environments. Organizations have been increasingly building international resourcing and talent management strategies which shifts from the conventional management of expatriation towards providing supplementary services to businesses which are aimed to enhancing the process of globalization (Francesco, 2005, p.156). This necessarily means that firms have to capitalize on the fragmentation of the international employees coming from diverse backgrounds and cultures. Since HR strategies have close alignment with globalization such as generating new alliances with functions like marketing, the new activities which are created along with the new skills and roles of HR functions carry crucial implications for the study of international resourcing in HRM. The purpose of this assignment is to bring forth the critical understanding of the contribution of international resourcing and talent management strategies towards attainment and accomplishment of strategic goals of the organization in the international business operations. The different processes, techniques and practices underpinning international resourcing and talent management for workforce coming from diverse cultural backgrounds and backdrops are explored extensively in the project. This is coupled with elaboration of the different implications of the practices. A critical analysis of the subject is provided with regards to their effectiveness in organizations and prospects in future to emerge as necessary resourcing and talent management strategies (Sparrow, 2006, p.1). Culture Culture has been defined by Stacey (1996) as the set of practices beliefs and customs which are shared among working together, and the basic assumptions they admit to. Similarly, Schein (2010) has put forth the definition of culture as being a pattern of shared basic assumptions adopted by a group after applying to problems encountered and consider them as being tested and authoritative and so can be transferred upon the new members of the group as being the correct way of dealing with the problems. Organizations primarily design strategies considering cultural dimensions put forth by Hoftsede. Hofstede’s (1983), proposed a systematic framework for differentiating and assessing national cultures in comparison to the organizational culture which other words called as the cultural dimensions theory. Organizations particularly consider the cultural dimensions put forth by Hofstede since they operate in multiple and diverse locations across the world having varying extent of these dimensions. Cultural Dimensions The main dimensions proposed by Hofstede are power distance, individualism and collectivism, uncertainly avoidance index, masculinity and femininity, long term and short term orientation and finally indulgence and restraint. Power distance is an indication of the extent to which societies accept unequal distribution of power in their organizations. Low power distance indicates that employees at all levels participate in decision making of the organization and their views are given importance. The western nations such as USA have low power distance unlike the eastern countries like India, Japan accept hierarchical structures in their organizations. Individualism and collectivism pertains to the extent to which people are interdependent, self oriented and have clear leadership roles. While European countries reflect collective cultures, china reflects the opposite, i.e. individualistic culture. There is a typical difference between the western countries and eastern countries with regards to masculinity and femininity. While eastern countries like India value relationship more than material success they reflect feminine culture while western countries placing greater value on money and material success reflect masculine culture. High uncertainty index means that culture is keeps away from taking risks and feels threatened by the presence of uncertainly. This is predominant of cultures in nations like India and China. On the other hand western countries like USA have a culture in which people are willing to take risks, have greater comfort level and lack proper structure. The Asian countries are also more short term oriented unlike the western and European countries where people attach more importance to the future. Finally Societies with high indulgence allow riotous behaviours where individuals can freely satisfy their needs and wants. On the opposite side, restraint societies are such societies which are guided by strict social norms and where gratification of drives remains regulated and suppressed. Thus these cultural differences have implications for organizations designing organizational strategies and must be according to the needs of place where they are located. International Selection Cultures have considerable impact on the different approaches to manage people in organizations. Thus cultural differences call for differences in the management practices in these organizations too. According to the views of Briscoe et al., (2009), human resource management practices are the most vulnerable to such cultural differences. The wide variety of perspectives in international human resource management proposes that cultural differences are the root cause of differences in individual preferences and perceptions which consequently shape the organizational behaviours including motivation at work, communications, conflicts, decision making, performance appraisals, goal setting and even management styles (Milikic, 2009, p.94). All across the world organizations witnessed an imbalance between the required skills and the available skills from different countries having different cultures. This has made recruitment and hiring all the more difficult for them. While a study conducted by SHRM in 2010 revealed that most college graduates in the western cultures such as USA have excellent skills while a smaller of university graduates have such skills; on another hand a research conducted by Accenture revealed that college graduates in India are devoid of adequate technical and managerial skills to enter the workforce. The young generation are seen to be less prepared for entering into the workforce of white collar jobs in the country. Thus employers increasingly resort to training strategies, apprenticeship programs, on-the-job training programs etc to building their skills. Because of tremendous imbalance in the talent pool across the world MNCs have been trying to create a truly global mindset and global operation with regards to HR. They have referred this as being ‘globally local’ or ‘glocal’ (Bersin, 2011, p.10). The multinational organizations located in different countries are primarily dominated by local cultures and run by local operations and remain under local control. Though some countries have excellent on boarding programs and training programs, some countries lack them. For example groups in China are recruited with little rigor and assessment while teams recruited in the European countries are done through extensive and advanced techniques in HRM. Most of the large organizations in the world have been dealing with organizational silos and have been seeking to build a globally federated model for their employees (Goldsmith & Carter, 2009, p.xviii). That is why organizations have been increasingly seeking to use and implement different recruitment, selection, resourcing and HR strategies in different countries where they are operating. The multinational organizations have also been trying to integrate various talent management strategies for better recruitment and retention of diverse cultural talents in their companies (Silzer, Israel & Dowell, 2009, p.”Integrate the Talent Strategy”). They have also been seeking to employ agency workers and employment agencies, consultants and subcontractors, or even outsourcing arrangements to other countries. In order to mobilise the culturally diverse workforce they are recruiting people from employment markets which makes it compulsory for them to compete with competitors whenever the demand for skills fall excess to the supply. Thus effective organizations have been more and more seeking to develop strategic approaches towards the attraction and retention of candidates, identifying and analysing the crucial employment trends, and gaining greater understanding of the labour market dynamics such as compete more effectively in the present and in future. Thus they have been focussing more on proactive diversity management, work life balance initiatives, employer branding strategies and innovative approaches towards designing jobs, describing, and analysis (Bersin, 2011, p.10). One answer that researchers have sought to find out is whether the talent management and resourcing processes on account of cultural diversities are inherited from the parent company or are they a mixture of regional and locally adjusted resourcing practices. Lu and Bjorkman (1997) have put forth that multinational organizations generally implement local or regional strategies and not global strategies. This reflects a lack of global approach towards the management of talent. Semi globalization has necessarily implied a demonstration of neither complete geographic fragmentation of the world into national markets nor entire integration of the same (Scullion & Collings, 2010, p.49). However, the question is whether organizations must implement the transnational HRM strategies with the creation of cross regional and intra-regional flow of labour. Integration of the resourcing and talent management strategies has necessarily slowed down because of the inherent challenges of the country’s cultural and institutional idiosyncrasies (Ehnert, 2009, p.120). Research conducted on some of the Japanese MNCs show that there were strong influences on the agglomeration benefits such as social ties, regional knowledge spill-over, transfer of organizational practices ad knowledge and other arbitrage decisions between the countries within the same region. The observation clearly depicts lack of attention provided to the regional dimensions of the international resourcing and talent management processes (Scullion & Collings, 2010, p.49). Research on global staffing and talent management has remained restricted to some of the key positions in the multinational organizations and their top management team positions in the headquarters and subsidiary locations so far, which are generally with idiosyncratic combination of strategies without having any rational progression of focus towards the process of globalization. The study of previous literature provides demonstration of great attention and focus on recruitment and selection of international managers and expatriates; resourcing and talent management in the local and headquarter level and the generally more flexible structure of global business travellers, inpatriates and virtual teams. The convention of regarding all international employees as being expatriates and international assignees falls short of the requirement of global HR practitioners for understanding the available options and apply them to the emerging and international business strategies (Scullion & Collings, 2010, p.50). In this regard, the concept of international resourcing and talent management now include a fragmented group of individuals diversifying from the conventional contract expatriates, permanent global managers and the intermediate or short term foreign posted assignees. These also include employees on long term trips for businesses, international transferees, the virtual and global employees working on cross borders projects, skilled workforce working in regionally remote locations on global operations, self initiated employees who are willing to exist in a third world nation but work for a multinational organization and finally immigrants who are actively or even passively attracted towards the national labour market (Sparrow, 2006, p.4). Training Arising from the imbalances accounting from cultural diversities in organizations they have increasingly resorting to training programs to remove these hurdles. Thus employers increasingly resort to training strategies, apprenticeship programs, on-the-job training programs etc to building their skills. Because of tremendous imbalance in the talent pool across the world MNCs have been trying to create a truly global mindset and global operation with regards to HR. They have referred this as being ‘globally local’ or ‘glocal’ (Bersin, 2011, p.10). In one of the surveys conducted by the Economic Intelligence Unit (EIU) in 2006, 153 numbers of responses were generated from the senior executives mainly from the regions Asia, Europe, North America, Middle East, Africa and Latin America. Some of the findings with regards to global resourcing are as follows. Technology companies across the world have been becoming more and more sophisticated in their approaches towards managing and resourcing talent, such as identification, recruitment, retention and development of talent. They are particularly focussing on training and personnel development through inference of the new recruits and existing personnel. Over a third of such multinational companies are of the opinion that training is one important component of their resourcing and talent management strategies. One of the critical sources of talent they have heavily relying on is recruiting from competitors, recruiting from top B-Schools, outsourcing for particular specialized skills, entering into partnerships with the other technology firms and recruiting from other industries. More than one-third of companies also admitted that currently they were pursuing off-shoring to a significant extent. But the figure is expected to rise substantially to nearly half of all of the technology companies in the world by the next 3 years. More than half of the executives believe that the management of global talent is one of the most serious challenges they have been facing. This means that the technology companies must continue to expand their international pool of skill and expertise. This is the reason why majority of them have been pursuing off-shoring activities as their main endeavours. Executives’ perceptions with regards to the scarcity of resources do not remain restricted to the developing markets only. Nearly 50% of all technological companies are of the opinion that they find difficulty in getting the right technical talent and expertise in the emerging markets. Retention of these people is also an important concern for them in the eyes of industry executives (Pricewaterhouse Coopers, 2006, p.5). Some of the findings from the research and their interpretation are provided below. Considering the examples of the Western countries and China reveal that these two regions are distinctly different in terms of their cultures and values. Western managers are almost like blind managers when they visit China. Thus western multinationals having bases in China must provide all means of facilitating the adjustment process of the western expatriates in China. Some of the HR aspects include cross-cultural training, language training, cautious selection of candidates for expatriate assignments, etc. Studies reveal that the maximum effectiveness of training takes place when trainees remain motivated. Thus it is crucial for multinationals to select candidates with travelling experiences who considers the benefits of training before their departure because they have experienced associations with people of other cultures. It is also important that expatriate managers constantly keep reporting to their headquarters. Other HR strategies could include mentoring and coaching, greater interaction between expatriate predecessor and successor in order to facilitate exchange of information, providing greater exposure through visits to China to increase awareness and knowledge about its culture and norms (Wang, 2009, p.112). The analysis also reveals that global organizations need to improve their capabilities in managing international talent pool significantly. It is true that they have been working on the same and must evaluate their chase of off-shoring and evaluation of people management strategies in the emerging markets. It is seen that organizations are yet to improve their operations in different parts of the world so as to attract talents easily. They are significantly reliant on moving and locating their talents in places where there is existence of capital, operations and opportunities. The movement of capital to places where there is existence of talented people is still rare and uncommon strategy (Pricewaterhouse Coopers, 2006, p.40). The coordination of global talent management strategies in the highly decentralized multinational organizations is even more difficult. This is because of the tensions and challenges between the short terms requirements of the operating firms and the long term needs of the company’s businesses. An example can be cited on this context. A new system was implemented group wide in the French company EDF for better management of expatriation. However because the MNC was highly decentralized the system was primarily reliant on the major informal influencing capabilities of its corporate human resource management department (McCray, 2008, p.7). On the other hand the corporate human resource management department was insistent upon and increasingly influential on persuading the operating companies to encourage and support such initiatives which were strategic and helped in the attainment of long term business objectives of the firm. Researchers have also questioned on whether the HRM integration processes must be through the implementation of the parent company HR practices or with a combination of regionally adjusted worldwide HR practices. According to the findings of Rugman and Verbeke, (2004), MNCs are more commonly seen to practice regional strategies which reflected an inadequate approach towards global resource and talent management (Scullion & Collings, 2010, p.49). However it is also seen that MNCs following regional strategies might fall victim into the silo mentality under which each of the regions might want to protect their management talent pool inside their regional silo. This has the chance that critical and key managerial talent would not be able to attain their full potential beyond their own regional boundaries. “Regiocentric” strategies can also have the disadvantage of disallowing MNCs to source talents outside their home region (Scullion & Collings, 2010, p.50). Thus Collings (2008) have suggested that multinational companies must reconsider the disadvantages associated with regional strategies with regards to exploitation of regional talents by silo mentality and failure of these strategies at the corporate levels to completely identify or even such talents at the regional level (Scullion & Collings, 2010, p.50). Political and Legal Environments It is essential for organizations to understand the political and legal environment of the place where they are operating. For example when firms operate in a democratic political environment decision making is primarily done in groups, however, in a communist community decisions are dominated by the views and suggestions of a single person. Mathur, (2010) has out forth the fact that such differences are effective in shaping government rules and policies and the way they interfere or deal with businesses in multinational organizations. Economic Environments Economic Environments account for another crucial factor as development stages of nations vary from each other. Depending on their stage of development, such as underdeveloped, developing or advanced category firms design their strategic decisions. Different companies make different decisions based on the development stage of the place where they are located (Mathur, 2010). The combined effect of these multiple factors along with national culture determines the success or failure of an international assignment. Conclusion Global talent management accounts for one of the major concern and challenge faced by organizations today. There has been extensive research on the correct and optimum measures that organizations could undertake for resourcing and managing global and culturally diverse talents across the world. With globalization they are faced with a whole pool of international talent, skills and expertise that they would like to explore and use to their benefit, however managing this pool is not easy as they are shaped by different backgrounds and cultures and associated with different organization behaviours and cultures. Business and labour market conditions in different countries are different and in such a condition the application of a single, unified and integrated strategy is not without challenges. It must consider both business objectives as well local conditions prevailing at those places. It must consider both business objectives as well local conditions prevailing at those places. It is seen that workforce imbalances exists in different countries. The potential of graduate kevel worker in Europe is distinctly different from the potential of a university level candidate in China. Organizations have to consider such differences while devising strategies for the two countries. That is why resourcing and talent management strategies remain restricted to local operations rather than influenced by strategies of the parent organization. Large organizations have been increasingly dealing with organization silos and trying to create and generate a globally federated model for their employees. Compensation structures, training and development programs, benefits programs, motivation, retention and developmental strategies are some of the areas in which organizations are increasingly working on to remove barriers in global resourcing. Researchers have particularly focussed on the cultural variations of human resource management practices with regards to Hofstede’s cultural dimensions. A great deal of international research on HRM practices reveals that approaches to deal with cultural diversities and their impacts on HRM practices vary within MNCs and countries. One conclusion that practitioners have rightly come up with is that globalization requires successful management of diversity. Thus the multinational companies having subsidiaries across the world need to appreciate and recognise the fact that culture impacts on organization values and practices for being able to successfully transfer management know how to the various local units (Milikic, 2009, p.111). Reference Bersin, J. (2011). Strategic Human Resources and Talent Management: Predictions for 2012. [Pdf]. Available at: http://marketing.bersin.com/rs/bersin/images/Predictions2012_Final.pdf. [Accessed on March 12, 2012]. Burke, R. J. & Cooper, C. L. (2003). The Peak Performing Organization. Taylor & Francis. Ehnert, I. (2009). Sustainable Human Resource Management: A Conceptual and Exploratory Analysis from a Paradox Perspective. Springer. Francesco, A. M. (2005). International Organizational Behavior, 2/e. Pearson Education India. Goldsmith, M. & Carter, L. (2009). 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