The Essential Strategic Management Roles in the Contemporary Organizations - Case Study Example

Running head: IHRM- UK International Human Resource Management – IHRM Insert Insert Grade Insert 7 March International Human Resource Management - IHRM Introduction Human capital is one of the resources necessary for the smooth running of any organization. At its infancy, the primary goal of international human resource management is to solve a multidimensional puzzle located at the crossroad of national and organizational cultures (Laurent 1986 p. 101). The top managers at the organizations get the operations executed by mobilizing the employees of the organization to perform the actual functions on their behalf. The management of this important resource is one of the essential strategic management roles in the contemporary organizations and it will affect corporate performance in the organization (Guest et al, 2003; Huselid et al, 1997; Costencu, et al., 2009). International human resource management (IHRM) encompasses all issues related to the management of people in an international context [including] human resource issues facing MNCS in different parts of their organizations [and] comparative analyses of HRM in different countries (Stahl and Bjorkman, 2006; p1). The human resource department is responsible for the recruitment and selection of employees, employee training and development, employee appraisal, their promotion or firing. These tasks are quite manageable if the employees are selected from a less heterogeneous population in terms of culture and other values. International human resource management then involves the management of the employees of an organization in the global context (Briscoe et al, 2009). IHRM cuts across different labour markets, education systems, employment laws, trade unions, and cultural expectations; it involves all the functions performed by HRM at the international level. Due to its complexity, the task requires additional management of global skills and expatriates from different regions across the globe. This function is essential in the operations of multinational corporations. As the organizations encounter individuals from across cultures, development of a uniform organizational culture to absorb all the employees becomes rather difficult. The human resource managers at different subsidiaries and outlets will often be forced to understand the organizational culture that is appropriate in a given region. This is necessary as many business failures in the international arena can be as a result of poor management of human resources (Desatnick & Bennett, 1978). It is then essential for HR managers at corporate headquarters and in regional headquarters need to consider cultural practices while hiring, promoting, and firing personnel. This paper digs deeper into the issues of international human resource management, the necessity in proper relationship with the employees and the difficulties that are often faced with a focus in human resource management in UK. It further provides recommendations on the considerations that can be made in improving international human resource management in the country. Importance Of Good Relationships With The Employees The employees are key stakeholders in an organization as they affect greatly the productivity of an organization and its relations with other stakeholders like the customers (The Loyalty Research Center, 1988). The relationship between a company and its employees is far much multifaceted as compared to the relationship with the other stakeholders like the customers of the company (Pieterse, 2008). Unlike the customers who are encountered once after some period, the employees experience the relationship with the company on a daily basis from the time they are absorbed into the organization. The managers get all the operations of an organization running through the lower-level employees. The low-level employees become the “tools” that get things done. A good relationship involves a state of mutual understanding between the parties. In such a relationship, there is a defined mechanism for interaction, reporting, and communication so that each of the parties feels close to the other (Pieterse, 2008). One of the partners must be sympathetic, empathetic with the other, and ready to understand and respond to the needs of the other. As such, a good relationship with the employees will be evident in an organization if there is an emergence of psychological contract (some unwritten and reciprocal expectations) between the employer and the employees (Gennard & Judge, 2005; Rousseau, 1988, p.390; Tung, 1993). On one hand, this occurs if the employees are satisfied with their job, they are positive with their identities, and they feel part of the business organization (Management Study guide, 2012). The relationship will exist if the employees feel that they are respected and their needs are considered by the management of the organization. Employees subjected to good treatment will most likely commit themselves to the organization. On the other hand, the employees have to meet the expectation of the employer in terms of behavior and performance. Good relationship with the employees is important as it contributes to improved performance of the organization in a number of ways. Firstly, good relationship will boost the morale of employees (Pieterse, 2008), who will be more willing to work. Employees will perform their best if they are motivated and feel part of the organization. They will be motivated to perform better if there is high level of job satisfaction. The output of each satisfied employee will be improved thereby increasing the total output in the organization. Secondly, good relationship also improves the productivity of an organization by promoting employee loyalty (Pieterse, 2008). For the jobs that require skills that are in high demand, the employers are under pressure to attract and retain employees, who can easily be lured away by the competing organizations (Markkula Center for Applied Ethics, 2010). Customers who are loyal to a given company will tend to be attached to the organization and they will use more of its products and services. The loyalty of employees is even more pronounced. It is defined as the ‘employees being committed to the success of the organization and believing that working for the organization is their best option’ (The Loyalty Research Center, 1990). In most cases, employees will be out in search for ‘greener pastures’ that are characterized by a number of incentives put in place by the organizations. They will be attracted to organizations with these incentives. A loyal employee would always want to remain in the organization. Such employees are not actively looking for alternative employments and neither do they respond to offers that may be provided by competing companies (The Loyalty Research Center, 1990). Developing good relationship with the employees will bar them from being attracted to other companies despite the competitive packages that may be offered by the competitors. In the above light, good relationship with the employees will also help reduce employee turnaround (Pieterse, 2008). This reduces operation costs and massive losses that organizations can incur. The process of recruitment, selection, and training of employees is often expensive and significant expense is incurred in replacing a single employee of an organization who has decided to leave for an alternative employment (The Loyalty Research Center, 1990). Besides, the organization may also lose some of its productive workers who would help the organization progress towards achieving its goals and objectives. A good relationship with the employees is also necessary in the management of organizational change. Change in the operations of an organization is inevitable in the current business industry owing to the dynamics that are experienced in the markets (American Productivity and Quality Center, 1997). The employees of the organization are often responsible for putting these changes into action and their reception of the change will affect the achievement of intended objectives. Good relations with the employees will help prepare them for the changes that are likely to occur so that they are received positively (Pieterse, 2008). The relationship will be characterized by timely communication of the changing trends recorded in the market that the organization would want to address. The employees may also be involved to provide their observations on the appropriate course of action. By involving the employees in such process, they tend to develop some stake in the organization. The UK: Background and context The UK is a relatively stable country in terms of her economy and the political environment. The government shows concern with various policies that affect different industries including labor. There are legal provisions on the rights of employees such as minimum wages; number of hours worked in a day, and the general condition of the work environment. The country also exhibits the western culture that is shared with the US and some European countries. A common characteristic of culture in the region is individualism, the notion that individuals should be self-reliant, pursue their self-interest and be able to make their independent decisions on lifestyles to be adopted (Wetherly, n.d). Internal factors affecting HRM in the UK Context An MNC operating in the UK will be managing three different categories of the employees. These include the home country employees (drawn from the home country of the MNC), the host country employees (drawn from the UK), and the third country employees drawn from outside the UK and not from the home country of the MNC. The management has to understand the factors affecting employment relationship in the UK, and adapt the two foreign categories of employees to the system. The local employees have understanding of these factors. Political and economic factors The economy and the political system in a given country will affect the operations of an organization including its management of human resources. The economic environment is mainly concerned with the process of production and the individuals exist as buyers and sellers or producers and consumers of the products (Wetherly, n.d). On the other hand, the political system describes how the individuals in a given country relate with each other as citizens of an independent country. The system is concerned with making rules and regulations that govern the operations and other decision-making processes within the country (Wetherly, n.d). The economic life and the political systems in a given country will influence the relationship between an employer and the employee. In the current global market, the customers attach more value to the quality of products. This prompts the employers to ensure that the employees perform and deliver effectively (Singh, 2011, p.128). This is observed in the UK market. Much attention has shifted to evaluation of performance. Besides, the level of economy will affect the kind of salary that is appropriate and recommended for a given category of workers in a given economy. The UK is a developed economy and an organization needs to offer relatively better packages than those offered in the developing nations. Similarly, the policies and regulation will dictate factors such as the recruitment and firing criterion of employees, the minimum wages, the working conditions (like the working hours), and the employee safety. The combination of these systems will be different across countries and a multinational corporation managing a diverse workforce needs to understand the factors in a given country. In the UK, there is high level of democratic socialism with the employees enjoying collective bargaining power (Singh, 2011, p.128). There is high level of trade union membership in the country (Stewart et al, 2001, p.342). Unlike the other European nations, the UK government has little intervention in this. The HR managers of MNCs in the country have to understand and respect these positions of the employees. Cultural factors Just like the political and economic factors, the socio-cultural environment will also affect employer-employee relationship. It covers different population attributes such as the language, gender, race, age, ethnicity and social class, the values beliefs and attitudes among the population, and their lifestyles (Wetherly, n.d). Large multinational organizations currently operate in global environment characterized by different cultures and the management of the organizations is challenged with managing culturally diverse employees from nations with different laws (Briscoe et al, 2009, p.16). The culture of a group of people can be defined in terms of the structural rules in the whole country population (i.e. the national culture) (Pot, 2000) or a consideration of the culture of some sub-group within the country (Wetherly, n.d). Similarly, the culture can be considered of groups of societies, nations, or regions on the globe (Wetherly, n.d), so that one can talk of the African culture, European culture, or the western culture. This members of a group or society share a distinct way of life with similar values, attitudes and behaviors that are learned over a period of time in a gradual yet dynamic process (Phatak ,1995). The culture in a particular country or region will influence the employees’ perceived obligations of the organizations in those regions. These refer to their expectation of the organization as well as what they feel the organization owe them. When the employees feel that the employer has failed to meet the obligations, they often reciprocate in patterns that may be harmful to the organization (Coyle-Shapiro, 2002). The UK culture has implications on human resource management approach. Britain’s culture is individualist characterized by value of individual competition and material gain. What implications could this have on human resource management in the UK? Individualism leads to greed, selfishness, and insularity (Joseph Rowntree Foundation, 2008). In a region with high levels of individualism, the primary concern of the people is to promote their well-being and that of their immediate family a practice entrenched in highly developed countries where performance pegs the pay of the individuals (Hofstede, 2001). There are weak bonds in the relationships that individuals form in such a society and the social groups like families have lighter weight. It then implies that the individuals will not show inclination towards collective responsibility common in developing countries (Hofstede, 2001). They are more concerned with personal than collective achievements. The management of teams and groups will be quite hard, as individuals in each team will strive to pursue his or her interest and chosen lifestyle. The other aspect of UK culture is their attitude to reserve. Unlike in the US culture where individuals are frankly outspoken and without reserve, the British citizens often reserve their thoughts and ideas (Wetherly, n.d). The individuals need to be engaged in deep interaction in order to get their views. Similarly, the UK citizens value fair treatment by the organizations. They also attach value to the differences recorded in the social classes. This may lead to employees from other countries experiencing a severe cultural shock. Culture shock can lead to negative perception of the host country and its people and bring a desire of the employees to return home (Harris & Moran, 1979). This may impede their output in their respective organizations External factors affecting HRM in UK International HRM in the UK will involve the ordinary HRM and additional considerations specific to the country. A number of factors that are not necessarily confined to the UK context can contribute to poor relationship between company and employees include failure by the management to meet the expectation of the employees (Management study guide, 2012). This can be manifested in several circumstances including poor work environment, delayed payments, error in the paid salaries, poor or no employee training, poorly programmed leave for the employees, lack of incentives like employee appraisal based on performance evaluation, and poor communication with the employees (Pieterse, 2008). The relationship can also be poor if the employee does not behave, act, or perform according the stipulated norms and the expectations of the management of an organization (Management study guide, 2012). The employees may fail to perform effectively or achieve their personal and career goals while executing their duties to the organization. The other factor stems from the difference in culture of the expatriates that an organization employs that are not natives of the UK. The expatriates could be from the home country of the MNC or from a different country, with distinct cultures. These considerations have to be made in determining the appropriate organizational cultures to be adopted. Other factors like technological differences between the home country and the UK can also influence human resource management. This includes applications such as communication technologies applied by the HRM departments to ease communication with the employees. Steps to effective Human Resource Management Generally the management of relationship problem will entail conflict resolution; identification of the factors that may break the relationship and fixing them accordingly. To manage these issues organizations have attempted to use modern technology. The organizations use HR systems for information management, communication, payment of employees, performance evaluation, coordination of workflow, or providing training among many others (Pieterse, 2008). Nonetheless, the use of these technology systems may not succeed in develop good relationships if an organizational culture is not developed that can accommodate all the employees’ cultures. The organization should first develop a culture that understands the significance of employees and their cultural diversity before technology can aid in improving the relationship (Pieterse, 2008). Rules and regulations need to be established that will guide the use of these technologies in human resource management. The conflict resolution through organizational culture can be broken down and managed in several ways. Firstly, it has been stated that the employees have their expectations of the organization. The [UK] employees expect that there will be justice and fairness while performing all organizational operations like assignment of duties or allocation of resources (Management study guide, 2012). The management of the organizations should strive to treat all the employees on the same level without any level of prejudice. The same culture of equality should also be developed among the employees whereby none should feel elevated above the others. Another important component of organizational culture is employee appraisal. The organizations set target to be achieved by their employees. It is appropriate for the management of such organizations to reward the employees who have met and/or exceeded these targets (Management study guide, 2012). In most instances, the employees understand when they are getting things wrong at the work place and the same employees understand when they are doing the right thing. Nonetheless, the management is often concerned with condemning the wrong acts as opposed to appreciating the positive achievements. Appreciation and rewards boost the morale of the employees who will then work collectively towards organizational success. Consistent and effective communication between the employees and the top management is also necessary in promoting the relationship. The management should develop good rapport with the employees at the onset of this engagement and ensure that they interact continuously with the employees (Management study guide, 2012). The employees need to be informed at the correct time, on the changes that may have been made in the organization or the changes that are expected t occur. This will enable the employees to make informed decisions. The management should also be concerned with the employees’ evaluation of the organization through encouraging feedback from the employees (Management study guide, 2012). Through the feedbacks, the employees can express their concerns to the employers who will then be challenged to respond to these observations in order to maintain the relationship. The other important aspect entails employee training to cultivate and improve their skills. Researches have shown that organizations that promote employee participation outperform the others that practice the traditional systems where research is restricted to a given department (Ichniowski & Shaw, 1999). Employees are often disheartened when they are subjected to the same job assignment continuously (Management study guide, 2012). The employees need to be challenged through being assigned jobs that require more expertise. The training programs will enable the employees build on their talents. Concluding remarks and recommendations Human resource management is very crucial for the success of an organization due to the central role played by the employees in the execution of the operations of the organization. This management becomes complex at the international level where different national policies, political factors, economic atmospheres, and cultures are encountered. An organization that is to survive should provide a differential approach by identifying the factors that are relevant to a given country. Smooth employer-employee relationship at the national and international level can be achieved through conflict resolution that involves identification of factors that can break the relationship and making the necessary adjustments. On top of the above approaches to human resource management, the organization should consider the strategies employed by the competitors. Companies will retain employees through competitive salary packages. It has been pointed out that employees are often in search of better employment opportunities in terms of payment owing to the current economic mayhems. The organizations need to pay salaries that are proportional to the skills and competencies of the employees to bar the employees from being attracted by other organizations. Similarly, an international business organization recruiting its employees should ensure that it would be a long-term commitment through effective scrutiny of the applicants. The process should not be carried as though the organization was desperate to have the positions field, by anybody. The organizations also need to promote employee training that is gaining popularity in practically everywhere on the globe. References American Productivity and Quality Center. 1997. Organizational Change: Managing the Human side [Online]. Available at: http://www.exinfm.com/pdffiles/change_apqc.pdf [Accessed March 7, 2012] Briscoe, D. et al. 2009. 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