International Human Resource Management - Winch-It industries Pty - Case Study Example

PORTFOLIO REPORT Evaluate and experience both the theory and practice of international human resource management within the global context. Student’s Name: Student number: Name of the unit: Unit Code: Unit coordinator: Executive Summary This portfolio report develops recommendations for Winch-It industries Pty in what to do in its endeavors to expand beyond the domestic market. The report recommendations that Winch-It adopt the functional departmentalization organizational structure incorporating the geographical departmentalization organizational structure. This ensures the company appeals to the local community in which it is based. It also ensures that experts undertake specific operations where they have specialized in hence efficient performance of tasks. The decision making process should be centralized with major decisions emanating from the headquarters. This promises coherence in the firm’s activities and objectives. This also helps the new subsidiaries to gain ground in their new settings before decision making is decentralized. As for staffing options it is recommended that host country nationals to be part of the management as this make the company appeal to the host community as it portrays trust in the local talent. But it is also recommended that the same host country nationals receive technical training as well as corporate strategy training. Training can also be extended to expatriates in order to prepare them for foreign assignments. Winch-It also need to familiarize themselves with the political, economic and social orientations of the host region. Understanding of such aspects as taxation regimes in the host country as well as the financial reporting requirements is necessary. Contents Executive Summary 2 Contents 3 Introduction 4 The organizational structure that Winch-It should adopt for its overseas operations 4 Staffing options for Winch-It Industries Pty 6 Winch-It Industries and the cultural context 7 Winch-It Industries and international training and development 7 Conclusion 8 References 9 Introduction The globalization of business is inevitable for any business enterprise aiming at expanding its market base as this comes with the promise of increased profits for the organization (Keillor, 2012, p. 3). The economic, political, cultural factors and other relevant factors come in handy in guiding the international entry. Higher profit margins, growth of the business, the attainment of a competitive advantage and the urge for an international reputation drives organizations into opening subsidiaries overseas (Harrison, Dalkiran & Elsey 2000, p. 255 & 256). This report aims to provide recommendations to the Winch-It Industries Pty on the type of organizational structure they should adopt should they decide to expand its business overseas. It will also highlight the staffing options for the new international subsidiary and how the organization will navigate the cultural differences in the global arena as well as the necessary international training and development that will be relevant and beneficial for the Winch-It employees in staying relent in the international front. The organizational structure that Winch-It should adopt for its overseas operations Organizational structure is the drawing up of the specifications of the jobs to be carried out within the organization and how those jobs link to one another (Ebert & Griffin 2003, p. 174). Hill (2013, p. 186) describes organizational structure as the formal splitting of an organization into subunits, deciding on the place within the organization where the decision making responsibilities lie and coming up with ways of controlling t and marrying the activities of the subunits into a coherent single function. For the Winch-It Industries Pty by the fact that it is the first time that they are plunging into the international market it is recommended that for the splitting of organization into subunits the geographical departmentalization to be adopted. This is splitting an organization based on their areas of operation be it within the same country or around the world (Ebert & Griffin 2003, p. 179). For instance Winch-It Industries Pty will be geographically departmentalized as the London plant, California Plant, Florida plant, Havana Plant, Rio de Janeiro Plant, Cairo plant depending on the region where it is operating with each region having a manager in charge of plant operations. Winch-It Industries Pty apart from being segmented in terms of geographical areas it will also need functional segmentation for its overseas operations. In this case the organization is broken down into production, marketing, human resources and finance departments. Functional departmentalization is the segmentation of the organization according to the functions of the various groups that make up the organization. Geographical departmentalization is essential for Winch-It industries because there is substantial saving in terms of travelling expenses, time and effort. It also affords each geographical department the chance of quickly fitting in and adjusting into the local environment. It also makes it to track the performance of individual territorial markets (French et al. 2011, p. 309). Incorporating the functional structure into the organizational structure for Winch-It Industries is also important since the company deals with a single product. This structural approach will also help Winch-It to enjoy economies of scale. It is also highly efficient since individuals with similar skills are grouped together leading to specialization (French et al. 2011, p. 309). In terms of positioning the decision making process it is recommended that Winch-It industries stick to the centralized structure. This is where the decision making authority is retained by the management at the headquarters and in this case that is Australia. Decisions that are made by plant and functional managers based in various regions have to be vetted by the top management at the headquarters. This is beneficial since Winch-It is just getting started in overseas operations. This will also ensure that there is no replication of activities and that the same quality is guaranteed across the globe. It also enhances coordination and makes sure that decisions do not deviate from the company’s objectives (Ebert & Griffin 2003, p. 180). Staffing options for Winch-It Industries Pty The idea of Winch-It industries wanting to take one of their own to man their overseas operations won’t be advisable. It is recommended that Winch-It Industries employ the host country national to oversee it operations. It can have somebody from the host country first trained before taking up the responsibility. In staffing its overseas operations Winch-It industries has to go with the polycentric approach at the moment where a national from the host country heads a company subsidiary and human resources are sourced locally (Treven 2001, p. 178). With continued growth the company will have to adopt the geocentric or global approach in staffing where employees are recruited from across the globe and developed into global managers through training hence forming a pool of global managers within the organization who are utilized whenever the need arises (Treven 2001, p. 178). Using a national of the host country as the manager and sourcing human resources locally is advisable because the company stands to benefit from cheap labour costs, the company will receive a positive reception since by using local employees it demonstrates trust in the local citizens and the company is accepted as participating in the local economy (Treven 2001, p.179). A national of the host country has the understanding of the local business, legal and culture climate. They also understand the management practices that are most effective in that region and blend well with the local customers. Communication is also enhanced as they understand the local language (Colakoglu & Caligiuri 2008, pp. 233 & 234). Winch-It Industries and the cultural context In order to make sure that the cultural context is taken into account in the overseas operation Winch-It industries need to understand the tax structure of the region they want to venture into. It is also important to have at its finger tips facts on how the region requires them to report their financial gains. Understanding the religion, political situation, economic, and social orientations of the region will come in handy (Pfoertsch 2014, pp. 60-73). Winch-It can take care of this by having some of its overseas operations in form of joint ventures or franchise. The use of joint ventures or strategic alliances in entering foreign markets buys the organization time to learn the local culture (Ebert & Griffin 2003, p. 196). Social capital building can also go along in ensuring that the social context is catered for in the attempt of exploring overseas markets. It entails forming trust based relationships with the host country customers, suppliers and employees. The company should embrace the diversities in culture in the markets they plunge into. Winch-It Industries and international training and development The international training and development that Winch-it should develop for its employees include training the host country nationals and third country nationals on issues relating to the culture and strategy specific to corporations. Technical training is also necessary (Shen 2005, p. 657). This training ensures better understanding of the corporate strategy and erects a corporate entity as well as meeting specific training needs of such individuals. This training is also important as it facilitates firm specific training. It also goes a long way in ensuring that quality in subsidiary branches does not deviate from the required specifications as it ensures that there is uniformity in the quality of the products throughout the globe ruling out the probabilities of comparison.Expatriate training in such areas as cultural awareness, language, religion, customs and values of the host country becomes necessary (Shen 2005, p. 657). This is in ensuring that whenever employees are required to undertake a foreign assignment they ready and prepared to do so. Cross cultural training for expatriates enhances their performance in foreign assignments as it equips them with a global mindset. This prepares them to quickly fit in to their new cultural setting appreciating the diversity in culture. Language training will ensure that they are not left out in communicating the company objectives to the potential market. Conclusion It is wise for Winch-It Industries to plunge into the international arena of business but cautiously and wisely putting in place a functional departmentalization structure embedding a geographical departmentalization within it ranks. A centralized decision making process is important at the moment for well-coordinated and consistent company objectives. Employees for the Winch-It subsidiaries need to come from the host country as this will make the subsidiaries to easily cut a niche for themselves in the foreign markets as they will be deemed as playing a very important role as far as the local economy is concerned. Training of the local employees as well as the expatriates will ensure that products of standard quality are produced. It will also communicate trust to the locals hence encouraging them to invest in the company. Training will also make available global managers with a global exposure from which the organization can select from if need arises. References Colakoglu, S & Caligiuri, P 2008. ‘Cultural distance, expatriate staffing and subsidiary performance’, The International Journal of Human Resource Management, vol. 19, no. 2, pp. 223-239. Ebert, R J & Griffin, R W 2003, ‘Business essentials’, 4th edn, Prentice Hall, Upper Saddle River, NJ. French, R, Rayner, C, Rees, G & Rumbles, S 2011, ‘Organizational behaviour’, 2nd edn, John Wiley & Sons, West Sussex. Harrison, A L, Dalkiran, E & Elsey, E 2000, ‘International business’, Oxford University Press, New York. Hill, C W L 2013, ‘International business’, 9th edn, McGraw Hill, New York Keillor, B D 2012, ‘Winning in the global market: A practical guide to international success’, ABC-CLIO, LLC, California. Pfoertsch, W A (ed.) 2014, ‘Going abroad: How to understand foreign markets and do business around the globe’, Pforzheim University Press, Germany. Shen, J 2005, ‘International training and management development: Theory and reality’, Journal of Management Development, vol. 24, no. 7, pp. 656-666. Treven, S 2001, ‘Human resource management in international organizations’, Management, vol. 6, pp. 177-178. Read More