Using Local Employees to Staff the International Operations - Coursework Example

INTERNATIONAL HUMAN RESOURCE MANAGEMENT Name: Course Instructor’s name Institution Date INTERNATIONAL HUMAN RESOURCE MANAGEMENT Question 1 Introduction For an organization to carry out its business in the international environment, it will encounter above those faced by its domestic businesses.With the current rapid growth in internationalization and globalization organizations are increasingly spreading their operation to the foreign markets. However this proven to be quite sensitive especially inline to these organizations staffing. On the other hand, this also calls for more complex business structures in order for these organizations operation in the foreign markets to succeed. There is no doubt that managing employees in the global environment can be quite difficult and time-consuming for these organizations (Mezias and Guth 1998). This might require looking for employees best fit for to work for the organization, train them and ensure they relate to the organizations culture in order for them to start working fully for the organization. This paper, therefore, highlights on the importance of an organization using local employees to staff its international operations. Organizing and staffing an organization's operation is one of the constant challenges facing the organization. This problem has proven much bigger for the organizations which have expanded their operations across the national borders. Due to lack of direct touch, supervision and proper allocation of tasks to employees it might be difficult for these organizations to reciprocate their local productivity in its operations abroad. On the other hand the difference in the local market and that in the foreign country might pose to be a huge hindrance to the organizations operations (Yamazaki 2014). For instance, a company may need to build it reputation in its new market, however, due to language barrier this course might be slowed down. Secondly, the company may have to surpass the cultural barriers in the new market for its operations to flow smoothly. For an organization’s workforce to adapt to the changing environment an organization will need to invest a lot of time and finances which in the long end does not guarantee any success. Therefore, an organization is likely to go for the easiest option which is using employees from its new markets to staff its operations. This will enable the organizations to adapt to the changing environment through globalizing its Human Resource system and functions (Mahajan and De Silva 2012). Some of the significant challenges this HR system is bound to face are compliance with the internationals laws, training, and development and cultural diversity. Literature review (Pigors 1973: 690) Emphasizes that one significant problem facing multinationals is the geographical distance where there is the lack of day- to-day relationship with an organization’s headquarters and its staffs in the foreign market. Pigors goes on to emphasize that it is essential for an organization to give its overseas staffing practice special attention. He also goes on to break down the different sources of employee’s who can be staffed in an international company. They include; employees from the organization’s place of origin he refers to these types of employees as expatriates or home country nationals (Bowblis 2011). Secondly, he claims that host country nationals which are the natives from the host country it has expanded its business to. Thirdly Pigros claims that an organization would also use third country nationals; these comprise of natives from neither another different country who are neither from the host country nor the organization’s country of origin (Mezias and Guth 1998). (Francesco, Gold, 1998) On the other hand, seconded pigrors claims my revelling three distinct approaches which a country can use in staffing and managing its subsidiaries. These approaches include; Ethnocentric, this is where the home country practice prevails, in this approach major decisions are made by employees from the organisation's home country that hold higher job roles compared to the other organisation's staff on the other hand in this approach the key decisions are also made by the headquarters from the organisation's home country (Bruning, Sonpar and Wang 2012). The other approach as revealed by (Francesco, Gold, 1998) is the polycentric approach; this is where management is done on a local basis by each subsidiary (Bruning, Sonpar and Wang 2012). Due to lack of knowledge on the local market in the foreign business environment, local employees are therefore tasked with heading the subsidiaries. Human resource management practices are therefore derived locally by these subsidiaries. The last approach according to (Francesco, Gold 1998) geocentric approach this is where global integrated business strategies are used by a company in managing and staffing employees. This is therefore done on a global basis. In this case, an organisation develops a pool of senior international who are comprised of individuals with international experience. However (Francesco, Gold 1998) are keen to mention that this approach is quite a sophisticated to embrace therefore it might be time-consuming and expensive for an organisation (Yamazaki 2014). (Briscoe 1995) advocated for the host country staffing approach by cautioning that using expatriates is more complex, time-consuming and expensive for an organisation. He is also keen to claim that an organisation intention to employ expatriates can be summaries as ‘so much to do, so little time.' (Briscoe 1995) Claims that through employing host country nationals an organisation will e eliminating language barrier issue for its staffing, therefore, ensuring that its operation in the foreign environment picks up on commenting (Mezias and Guth 1998). He also goes further to emphasise that through choosing the host country national employees an organisation will save on the relocation benefit it would have incurred if it used home country national. (Briscoe 1995) Also claims that host-country nationals being used in staffing the organisation operations are better placed to understand the rules and laws, therefore, saving the organisation time it would have spent on educating its expatriate employees on the same (Cavusgil et al. n.d.). However (Briscoe1995) cautions that the host country nationals used is staffing the organisation operation might not understand the organisations fundamental objective and culture without detailed training.He also cautions that this approach might also create negative competition within the organization through the creation of an ”us “versus “them” perception (Mahajan and De Silva 2012). Analysis Therefore, the host-country national approach is a significant consideration for an organization expanding into foreign territories as its staffing strategy. To back up this analogy, a recent expatriate survey conducted in China revealed that the foreign companies expanding into China, which used China citizen as employees to staff their operation recorded a much quicker turn around in operation compared to those who use expatriates (Hill n.d.). The report further reveals that the companies using expatriates had to invest heavily in language classes, and cultural classes for their staff where they also faced some setbacks since some of these individuals dropped out of these classes terming them too difficult. This reveals that expatriate staffing should either be a last resort for a company intending to venture into a new market or either part of the company’s long-term goal due to the time consumption of this approach and how expensive it can be (Mezias and Guth 1998). In another expatriate survey in Russia, it was reported that 42 per cent of the respondents claimed that most foreign companies in operation there which had started with the expatriate staffing approach have turned to the local host nationals as staffs for their companies. This is blamed on the cost of training and their time consumption which meant that a company operation would commence fully after a year. The same survey revealed that the companies using expatriates as their staffing made up of 10 per cent of the total number of companies in Russia (Hildisch, Froese and Peltokorpi 2013) . In the early stages of globalization, it was common that expatriates however over the year most companies are now contented with the abilities, skills and knowledge of existing in the labour pool in these new territories where they expand their business to. Hiring of host country nationals is not a preferred option for these companies due to the minimal training time and less cost it poses for these companies (Gong 2002) s. The other immerging advantage of using host national staffing is the connection that these employees have for instance a CEO from a particular host country will influence policies and regulation better that an expatriate from a foreign country. This has led to more organisation’s consider going for locally talented employees as opposed to the foreign talent that has little knowledge and influence in these foreign territories. Conclusion Due to these significant advantages use of expatriate staffing by the organization is increasing faced out with organization opting for the much easier and many convenient options for its companies as the look to reduce their risk in the foreign markets (Dekocker 2015). References Bowblis, J. 2011. Staffing Ratios and Quality: An Analysis of Minimum Direct Care Staffing Requirements for Nursing Homes. Health Services Research, 465, pp.1495-1516. Bruning, N., Sonpar, K. and Wang, X. 2012. Host-country national networks and expatriate effectiveness: A mixed-methods study. Journal of International Business Studies, 434, pp.444-450. Cavusgil, S., Knight, G., Riesenberger, J., Rammal, H. and Rose, E. n.d.. International business. Dekocker, V. 2015. Variation within the host country: How do complementary sub-national levels affect subsidiary discretion on vocational training policies within multinationals?. Journal of Industrial Relations, 572, pp.250-270. Gong, Y. 2002. Staffing subsidiaries of multinational firms. Hildisch, K., Froese, F. and Peltokorpi, V. 2013. Foreign Company Attractiveness to Host Country National Professionals: An Integrated Model. Academy of Management Proceedings, 20131, pp.14163-14163. Hill, C. n.d.. International business. Mahajan, A. and De Silva, S. 2012. Unmet role expectations of expatriates, host-country national support, and expatriate adjustment. International Journal of Cross Cultural Management, 123, pp.349-360. Mezias, J. and Guth, W. 1998. Labor lawsuits: A source of disadvantage for foreign subsidiaries in the United States. Yamazaki, Y. 2014. Using a competency approach to understand host-country national managers in Asia. The International Journal of Human Resource Management, 2515, pp.2103-2128. Read More