The Major International Human Resource Management Challenges - Assignment Example

Academic Essay Name Institution Date Question 2: The Major International Human Resource Management Challenges faced by organizations when engaging in cross-border mergers and acquisitions Introduction Studies on acquisitions and mergers show that challenges during integration occasion outcomes that are negative for firms and employees especially when it involves cross-border mergers and acquisitions. The main challenge entails employees in the new merged organization or company have to learn how they are going to work together in achievement of goals that are common and keep away from conflict. However, there is absence of connectivity in relation human side of mergers and acquisitions. An important step is to devise ways of socializing workers before the merging or acquisition. Workers have to be prepared in advance before mergers or acquisitions occur (Mendenhall, Oddou & Stahl, 2006). Organizational socialization is important step of making employees to harness social skills and knowledge which are required in assuming roles in the new merged organization. International human resource management plays an integral role in organizations that engage in cross-border mergers and acquisitions. Acquisitions and mergers have turned to be a central portion of the majority of corporate strategies for growth, and many of them entail cross-border mergers and acquisitions. Many mergers and acquisitions can be referred to as being cross border since a merger between to American corporation like EDS and HP will involve integration plan that affect operations in many other countries. However, managing strategic alliances successfully is a difficult task (Briscoe, Schuler & Tarique, 2012). An illustration of this is the 1998 cross-border merger of DaimerChrysler depicts the challenges in management that accompany cross-border alliances. Forces of competition in the auto industry globally made it necessary for the two companies to merger. On paper, the combination looked superb, but differences in culture interfered with the ability of management to expediently to realize the economic gains they had expected to reap. Confrontations owing to differences in cultures of countries involved and cultures of the companies nearly led to the collapse of the hitherto envisioned success. It took a long time for the management to focus on a common vision and chose a single culture that is unifying. Human resource challenges brought about by the differences in culture led to delaying of the success of the new corporation. This demonstrates that cultural differences play a major role in cross-border acquisitions and mergers. Cross-border mergers and acquisitions are characterized by distinct national cultures that offer opportunities for investment, but can also be a source of increased risk of failure from outside and within the organization (Ferraro, 2010). Misaligned behaviors, expectations, processes, practices, reward schemes and structures can occasion employ disengagement, general frustration, and finally loss of main talent in the organization (Sanz-Valle, Sabater-Sanchez & Aragon-Sanchez, 1999). International human resource management ha the challenge of ensuring that a unique and common culture of the companies involved is identified and promoted throughout. It will be frustrating to see employees who are not sure what they should do owing to the confusion brought about by the merger or acquisition. Differences in national cultures remain a big challenge in the face of acquisitions and mergers. If an Australian company was to merge with a Chinese company, or a Chinese company acquire an Australian company, or vice versa, there will be frustrating moments that are brought about by their differences in culture of employees or managers from two distinct cultures. Employees have to be prepared psychologically to successfully tackle the challenge that comes with acquisitions and merger that are cross-border (Sorge, 1991). Making employees understand and appreciate a new culture has to be the role of the international human resource management. Identifying common attributes in the different cultures and highlighting to the workers can ignite a unifying bond between the different camps. Integration of cultures in case of cross-border mergers and acquisition is a process of coordinating diverse cultures with the aim of making them mutual develop and exist within an organization. Nevertheless, the act of cultural integration is not a simple task of merging different cultures into a single culture; it is a process of coming up with a new mode of multinational corporate by selecting, integrating, and absorbing cultures. Management of cross cultures is an efficient method of attaining cultural integration among cross-border mergers and acquisitions successfully (Poole, 1990). Cross-cultural management is a system that is used to form an adaptive pattern that an organization uses in case of cross-border mergers and acquisitions. Unfavorable influences and conflicts have to be overcome. The negative factors have to be turned into positive factors. Major principles of cross-border cultural management is embedded in understanding and respecting the other people culture, emphasizing the role of communication, and implementing changes that are adaptive. People are the main cross-cultural management. Culture is demonstrated in the behavior and thinking of people (Child, Chung & Davies, 2003). Management concerns attainment of the best performance from people which are the key resource of the organization. The company acquiring another has to respect the culture of the targeted company and strive to comprehend the culture. An organization should not apply fixed principles in judgment of the culture of other company, but has to synthesize the strategic significance of the company in respect to its culture. National cultures are not the only challenge of international human resource management, the corporate culture that identifies the company creates another challenge that has to be tackled expediently. There is the unique culture that differentiates one organization from the other; this culture has to be aligned to go hand in hand with the expectations of the merger or the acquisition (Faulkner, Pitkethly & Child, 2002). International human resource management has to identify what should be retained in the old cultures of individual organization prior to the merging or acquisition. Differences in corporate culture also bring disharmony in the operations of the new organization through unshared practices. Developing a common corporate culture has to be the responsibility of every international human resource management department (Apfelthaler, Muller & Rehder, 2002). Multinational company’s practices and policies should incorporate the human resource system from ‘home’ integrated with the factors in the host country. Contradictions have to be minimized to make sure the merged organization achieves its organizational goals and objectives within the shortest time possible. Corporate finance world involve corporate restructuring where there are mergers and acquisitions. Corporate structures have to be re-organized to align with the new vision and objective of the corporation formed after a merger or acquisition (Harzing & Van Ruysseveldt, 2011). Acquiring the right skills and knowledge to handle cross-border transaction has to be among the main goals of international human resource management. External challenges like differences in attitudes like corporate governance, social responsibility, litigation, intellectual property rights, and ethics need to be pointed out and tackled early before they develop into a major challenge of the formed corporation. These issues bring about pertinent challenges that can derail the vision and organizational goals of the company. Increased trends such as corporate structuring, privatization, increased deregulation have spurred a surge that is unprecedented in activities involving cross-border mergers and acquisitions. Cross-border acquisitions and mergers are a part that is imperative that has led to accelerated economic globalization (Birkinshaw & Bresman, 2000). The international human resource management has to deal with the change of complex legal issues that come with cross-border acquisitions and mergers. Volume of cross-border transaction account for close to a third of global acquisitions and mergers and the volume are anticipated to increase as business is anticipated to expand. Regional trading blocs like the European Union forms a big challenge since one has to meet stringent rules that have been enacted. International management has to understanding international laws and regulation before venturing into any country. Google Inc. faced many legal setbacks that saw it pay a lot of money in legal litigation when it was found guilty of copy rights infringement for advertising counterfeit third party advertisement on its search engine. Understanding intellectual property and copy rights laws and regulation in a given target country is the role of human resource management (Briscoe & Schuler, 2004). There should be incidents that would results in successful law suits that would lead to loss of company’s funds in litigation. Legal complex issues which are tackled in cross-border mergers and acquisitions involve coordinating difference concepts concerning capital market regulations and corporate governance in laws that come with them. The European Union has elicited a hot debate concerning mergers and acquisition law. An organization has to engage the services of an experienced lawyer to offer advice concerning cross-border acquisitions and mergers. Mergers and acquisition integration may be faced with new values, standards, and rules that may be unfamiliar. Mergers and acquisition failure has been occasioned unsuccessful integration that results into many conflicts that are unresolved. Unfamiliarity of new laws and regulations can cause confusion in the international management of human resource (Capron, 1999). Labor laws and trade union regulation conformity poses another challenge to international human resource management. Trade union activities and labor laws are not universal in the whole world. A practice that is upheld in Asia can be suicidal in Europe. International human resource management has to study and understand deeply the trade union regulations and the labor laws governing employment in a particular country. Unfair dismissal and victimization of workers is taken very serious in many countries and if a company is not careful, it can incur losses in term of payment for damages. Cross-border mergers and acquisitions come with a fair share of legal complexities that have to be keenly and deeply understood by the international human resource management. Political influence of the host country has to be thoroughly understood before venturing into other countries. There are countries which are hostile owing to differences in ideological perspectives and cross-border acquisitions and mergers in such countries are dangerous. There have been cases where the state has seized property of private foreign companies from a country they consider to be an enemy. Political affiliations have to be well understood since they can lead to catastrophic losses (Dowling, Festing & Engle, 2008). Same political ideologies offer a stepping stone to engaging in cross-border acquisitions and mergers. There are cases whereby the government of a country engages in activities that jeopardize investments made by private firms from a rival country. The compliance of workers within the organization will highly be determined by their perception held towards the home country of the company. Political interference can jeopardize the changes of a merger or acquisition being successful. National pride and prestige has to be understood. Consumers may avoid good of a particular company since they consider the home country to be inferior to their own culture. Successful acquisitions and mergers involve understanding the intricate parts that entails international transactions and differences in cultures (Harzing & Van Ruysseveldt, 2011). To understand the whole process of mergers and acquisitions is not an easy process and careful international management has to be undertaken. Same country acquisitions and mergers are easy to handle due to familiar laws, regulations, and cultures as compared to cross-border mergers and acquisitions. Differences in the level of technology advancement can cause a major challenge since training of workers has to be conducted. Workshops and trade fairs have to be organized to ensure that workers get enough training on their new roles in the merged or acquired organization. International human resource management has to come with training programs that will ensure integration of workers from various camps that have integrated (Cartwright & Cooper, 1993). Effecting communication will build cohesion within the organization and lead to successful integration of people from different cultures. Through communication, many things are learnt between different cultures. Conclusion International Human resource has many challenges to deal with where cross-border acquisitions and mergers are involved. Cultural, corporate, labor, trade union, and legal are just among the many challenges that they have to deal with. Successful integration of different cultures depends on the level of communication that is embraced by the conflicting parties. Understanding international laws and labor regulation will help international human resource to avoid conflicts in the new corporation. The various challenges can be understood if effective ways of communication are implemented. Political interferences can thwart the efforts of international human resource management in integrating its operations to achieve success in the target country. Legal complexities have to be comprehended to ensure that the company does not run into collision with existing laws of the land. References Apfelthaler, G., Muller, H. J. & Rehder, R.R. (2002). Corporate global culture as competive advantage: Learning from Germany and Japan in Alabama and Austria? Journal of World Business, 37, 108-118. Briscoe, D.R. & Schuler, R.S. (2004). International human resource management: policies & practices for the global enterprise (2nd) . New York: Routledge. Briscoe; D., Schuler, R. & Tarique, I. (2012). 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