How HRM Can Help Address the Issues Encountered in Internationalization - Coursework Example

How HRM can help address the issues encountered in Internationalization by The of the The of the School (University) The City and State where it is located The Date Introduction Internationalisation is the process that enables an organization to operate in foreign markets besides its domestic markets. When in such markets, a company faces a number of challenges and issues that are associated with internationalisation such as analysation. In this sense, a company is required to analyse its attractiveness in target markets which depend on the growth potential of the company, level of operational risk, competition as well as the size of the enterprise (Becker 2007). Through the dispersion of industries and globalisation, a fierce debate that has been sparked discusses the best ways of enforcing standards of labour as well as improving the conditions of work of individuals in international companies and their centers of production (Lerpold 2007). Excessive working hours, child labour as well as hazardous working conditions are among the issues that continue to plague factories that are located in developing nations and end up creating an embarrassing and scandalous image for these companies and factories (Brewster & Harris 1999). In this paper, the researcher seeks to address how HRM can help in addressing issues that are associated with internationalisation by taking Nike as a case study. In this respect, the researcher will address some of these issues and challenges and provide solutions. Challenges For the greater part of the previous century, national governments were responsible for regulating labour standards through company policies, union-management negotiations as well as a mixture of laws (Cooke 2005). In the international scene, the conventional and technical services provided by the International Labour Organization were responsible for the additional source of advice and moral authority (Price 2004). However, this body lacked significant enforcement power. In the fast changing world, the industry witnessed worldwide supply chains emergency that made the national along with international strategies insufficient as influence was spread across national governments as well as amongst the myriad of suppliers and global buyers (Egan 1995). It is due to these contexts that business codes of conduct came out that was usually set up to respond to the pressures of consumer groups, trade unions as well as NGOs (Locke et al. 2007). The workplace regulation model induced heated debates (Cavusgil, Ghauri, & Agarwal 2002). This was over the actual efforts particularities and codes of securing conformity in such aspects as whom, how and for what purpose are inspections conducted. Moreover, the debates were also centered on the relationship of the model to other forms of state regulation. Critics of the model argued that the model displaced the more thorough union and government intervention and that it was designed not to improve working conditions or rights of labour, but rather restrict the legal responsibility of products and further avoid damage to the repute of these global brands. Nike, an MNC, has had an evolving code of conduct and compliance program. The company’s factory audits according to Locke et al. (2007) show that disparities in the conditions of work for suppliers is the result of not only company policy, but also a result of wider factors such as the national strength, regulatory and legal institutions as well as the existing connection between international suppliers and buyers. Varying working conditions and labour rights are responsible for reflecting differing production patterns, organization of work and practices of human resource managing. Internationalization Challenges Faced by Nike Global companies such as Nike face a number of challenges. An instance is the criticism of sourcing merchandises in factories along with countries where individuals are paid low earnings as well as bad working setting (Chryssochoidis, Millar, & Clegg 1997). Nike faced such criticism in the 90s which was fed by a succession of public relation frightening that involved the underpaying of its employees in Indonesia, bad working surroundings for workers in China, as well as child employment in Pakistan and Cambodia to mention but a few (Locke et al. 2007). All these tarnished the company’s brand image. In the onset, Nike did not take responsibility for any of the said allegations on the premise that the employees were not Nike’s but factory employees. However, by 1992, the company changed its hands-off approach and formulated a code of conduct that necessitated its suppliers to observe much fundamental health and environmental values (Locke et al. 2007). Internationalisation is also associated with market risks that can be political, economic or operational (Golz 2005). In the event of unstable political and economic situations in target markets, risks increase that decreases the attractiveness of the said markets. According to Locke et al. (2007), economical situations greatly depend on global trends as well as the rate of unemployment, GDP among other indicators used in assessing economic risks. A company that is global can thus face challenges in production and distribution of its products in foreign markets due to such economic risk. Political instability due to varying degrees of social unrest in foreign markets, ethnicity and relationship between various groups in a country are also responsible for impacting an internal brand negatively (IDGD & Aykin 2009). Financing in internationalization is also a challenge that companies face when going global (Marinov & Marinova 2013). This challenge mainly depends on the resources of the company. Big multinational corporations also face challenges associated with finance when going global. The entry mode, market conditions as well as a company’s code of conduct and ethics all affect the financing needed in internationalisation. A company may require additional funds in undertaking research, dealing with logistics of shipment, as well as training workers in supplier factories on various standards. Solutions to challenges In order to ensure that a company has smooth internationalisation, the company’s management needs to manage the internationalisation process. Taking Nike as an example, an organization when faced with a scandalous allegation in regard to its work ethics needs to investigate the issue and improve the same. Such scandalous allegations, if ignored, can negatively impact the brand image and reputation of a company. The HRM competencies at the head office of Nike and at subsidiaries in producing nations needs to ensure that the issues facing the company such as child labor, poor working conditions as well as excessive working hours are dealt with. A strategy that can be used by the HRM is the extensive training of managers in the overseas production facilities of the company. Training employees on cultural sensitivity, language and communication ensures that the individuals will have meaningful and deeper interactions with one another. Through communication, employees can air their views, grievances and ideas to the HRM, who can in turn provide solutions to challenges in the workplace. Political and economic risks may be quite challenging to deal with as a result of these being external challenges and forces that affect a company (Hesse, Grotz, & Toonen 2007). However, through research and proper planning, a Nike can successfully deal with these risks that are great challenges for its brands. In addition, the company can further research on the economic atmosphere in global and foreign markets to establish the best regions of investment. By successfully addressing the associated market risks, Nike can have a seamless internationalization experience. Lastly, companies need to ensure that they have adequate financing to support their plans for internationalization (Jones 2009). Solid finances are important in implementing strategies as well as nurturing a solid workforce that is well aware of a company’s objectives. The HRM plays an important role in the implementation of solid work ethics in individuals working in outsourced and supplier companies. This is important to the success of a company (OHagan & Ashworth 2002). A change of attitude by Nike’s employees through the HRM is important in improving the general labor practices within its global workforce. By providing guidance to factory managers, working conditions can be improved within the factories. Challenges such as poor working condition, child labor and poor wages will be a thing of the past. How human resource address key issues in Nike NIKE, Inc. has sought to make better labour conditions in their apparel, footwear, as well as supply chains of equipment for at least five years. Main that they have engaged are; the health as well as safety of the employees, extreme overtime, the capability of employees to without restraint, forced and child labor (Ramaswamy 2008). The footwear, apparel, and equipment companies have stayed quite a low tech, using low-skilled labor in up-and-coming markets. Nevertheless, this model is being confronted to its center. One of the legacies of this model is undeveloped system of local management for suppliers, with policies of human resources that put a low value on employees. At the moment, that view is going through an elemental shift, and the supply chain of Nike is leading to this change. They work with contract manufacturers to realize lean manufacturing, a strategy that produces the highest-quality brand while eradicating all sorts of waste, including material and lost time. Nikes advance to learn incorporates employee empowerment. It gives factory employees the abilities and skills needed to control production and straight away handle issues as they come up, such as process or quality improvements. The changes move decisions closer to the employee and need a high support level to guarantee they have the skills as well as confidence to produce products of quality constantly. The company believes lean holds great secure for employee empowerment and offers chances for employees to raise their skills as well as add to incessant improvement (Ramaswamy 2008). Conclusion In the past century, national governments have been responsible for the regulation of labour standards through company policies, union-management negotiations as well as a mixture of laws. In the international scene, the Conventional as well as technological services provided by the ILO have been responsible for providing an extra source of advice and ethical authority. The said workplace model of regulation induced hot arguments over the years. An evolving code of conduct is pertinent in dealing with challenges and issues associated with internationalisation. The HRM is at the centre of this, and this department is responsible for coming up with a multidimensional model for enhancing the conditions of work for individuals in worldwide supply companies. Taking Nike as an example, the company audits show that disparities in the suppliers conditions of work is the result of not only company policy, but also a result of wider factors such as the national strength, regulatory and legal institutions as well as the existing association between global suppliers and buyers. 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