Multinational Companies and Global Human Resource Strategies - Case Study Example

INTERNATIONAL HUMAN RESOURCE MANAGEMENT ISSUES: NO NAME CASE STUDY Institution’s name Author’s name INTERNATIONAL HUMAN RESOURCE MANAGEMENT ISSUES: NO NAME CASE STUDY Introduction The operation of human resource management across international boundaries as in the case of No Name Aircraft has often been a difficult task for many organizations. Brewster et al., (2011) define International Human Resource Management as a branch of management that deals with the design and impacts of organizational human resource in the various cultures or in various international market environments. There as some important International Human resource issues that need careful consideration for the success of any organization. No Name Aircraft has its operations in Australia, Vietnam, China, and Singapore. The company builds and sells aircraft across 50 nations in the world thus its classification as a global organization. Most of the production process of the Aircraft parts are in China and Vietnam with designing done in Singapore. The Assembly of the aircraft is done in Australia and Singapore. The main International Human Resource issues that the company is dealing with include organizational culture, diversity management, training and development, and International performance management (Sengupta & Bhattacharya 2007). International Human Resource Issues. Organizational Culture Organizational culture is different across the different nations in which No Name Aircraft operates. The difference in culture has led to the communication breakdown between the different management teams. International relationships quality becomes an important issue when dealing with culture management since the people are the main components of organizational culture (Evans & Bjorkman, 2011). For most organizations, recent emphasis on culture shows that culture is essential as a basis for performance and organizational values. At No Name, there has been a breakdown of communication and production of low-quality products due to the poor culture management associated with the organization. There is no integration of teams in the assembly of the aircraft, which was once a priority at the company. I believe that since the production of parts, designing, and assembly of the aircraft are done in different parts of the world the culture of the organization is not the same in these countries and that is the major issue. There is no proper communication due to this diverse organizational culture especially between the headquarters and the other subsidiaries. The organizational culture at the headquarters is different from the subsidiaries and without proper management of this culture as is the case for No Name there will be issues. Culture difference, therefore, becomes the main social issue that affects international human resource management of international organizations (In Machado, 2015). Diversity Management Diversity management is another critical IHRM issue that affects No Name Aircraft. Global companies have to be diverse in the employment of employees since different employees local employees are needed for the different subsidiaries. Management of diversity across the whole organization is a major issue since employees are of different age, race, gender, sexual orientation, religious beliefs, ethnicity, physical abilities, and many other demographic features (Festing, 2008). The policy for No Name is that all employees need to be respectful of these aspects which have not been the case. Because of failure to follow the policy, there has been intolerance issue regarding employees of different generations working together, therefore, straining the relationships between the younger and older generations. Many aspects including international competition, composition change concerning the labor force, increased knowledge on human resource management have affected human resource management of diversity. Another issue that has been reported on the company includes lack of recruitment of the disabled in China even those that have qualified skills and experience. The company also lacks clearly defined policies and regulations to aid the employees in having a better understanding of each other and thus enhance relationships and communication. Diversity management is an IHRM issue that No Name is clearly finding difficulty in dealing with. International Performance Management International Performance Management is all about dealing with International performances of the different employees, departments, and subsidiaries, especially concerning performance appraisals. International Performance Management is an integral part of IHRM as it is essential in the management of organizational resources to meet the requirements of the global market. For the case of No Name Air Craft, issues such as performance reviews, which are important for performance management, are only conducted at the headquarters in Australia and not in the subsidiaries. There is no proper communication between the headquarters and the subsidiaries, which is a major, issue considering that all the parts need to be functioning as one to ensure that the organization is successful. One manager, Frank Collins stated that “we are under so much pressure in Australia because of high costs and even higher expectations.” There are simply no performance measures and policies as O’Meara the CEO of the company was quoted telling the company’s human resource Manager, “It's time we had better performance measures…..we need to measure to manage. Someone will need to travel to China, Singapore, and Vietnam and make sure we have consistency…..of course, we need to take into consideration culture and local practices.” Training and Development Training and development Is a critical Human Resource issue and it extends to IHRM. As an important HR function, training and development are concerned with all activities related to the organization since it deals directly with the employees. Training involves a planned provision that is aimed at modification of skill, knowledge, behavior, and attitude using learning experiences that result in effective performances (Brown et al., 2008). Companies train in order to develop the abilities of individual employees to meet the current and future demands of the company. Training at No Name is poorly managed as the expatriate training provided to the employees do not provide a platform for the employees to give their feedback on the techniques used in training. One employee of the company even commented that "there is no training available to help you integrate into your new surroundings once you arrive. People do things differently here and it took me a long time to get used to with no training." Lack of planning and development programs in the company is a clear indication that HR management does not take training and development seriously considering that it is an essential HR process, which ensures an organization, gains a competitive advantage over its rivals. Dealing with the IHRM Issues To ensure that No Name Aircraft does not deal with these issues anymore, several strategies need to be employed in dealing with them. The strategies will be discussed below. Organizations should ensure that they recruit a diverse workforce and put in place policies that govern diversity management; the human resource department should do this task. Effective diversity management ensures that the organization is able to meet some of its important objectives and therefore gain a competitive advantage over its competitors. Legal regulations need to be met and therefore as an objective, the company should ensure that it meets all requirements and regulations of the Equal Employment Opportunity (EEO) and Affirmative Action (AA). Other important objectives that the company will be able to meet is attracting more employees to the company, better marketing, flexibility, creativity and employee retention. Diverse global organizations will always have a competitive edge over homogenous organizations through high creativity and innovation levels. Kossek et al (2007) explain that effective set of policies and practices on diversity management promotes understanding between employees and therefore creates a good working environment for all employees. Diversity management in organizations should aim at ensuring that employees appreciate others and there exists no discrimination of any kind. Through preparing for the future and locally identifying talent and skill, the organization can deal with the challenge of cultural differences across its subsidiaries (Tung, 2013). Education of future managers and leaders through the provision of knowledge on how to take advantage of the cultural differences is a major way international organizations including No Name Aircraft can overcome this challenge (Dowling et al., 2008). Organizational cultural diversity is advantageous for global organizations through the improvement of the decision-making and problem-solving processes because every individual brings unique experiences and ideas. International organizations should also look to identify extra skills that are not presented by the employees in their CV’s when entering new global markets and this will go a long way in providing the organization with a competitive advantage over its competitors. It is critical that the company ensures that management of culture is effective, which will allow communication in the company to be also effective, and thus the organization will be able to achieve its set objectives. Effective communication measures will ensure that communication between the headquarters and the subsidiaries is not a problem anymore. With communication strategies that are effective, both lateral and horizontal communication will harmonize organizational culture and create a good working environment for the employees. Training and development are needed in the company to ensure that the employees have their skills and knowledge improved. Training and development are one of the essential HR processes and thus the company should focus on it to ensure that it gains an advantage competitively over its competitors in the aircraft production industry. One important learning technique that the company can employ is the provision of language classes to allow employees to work in different nations without any difficulties. Language classes important because communication barrier is a major problem in the company. Communication is an important part of the human resource department of the organization since without effective communication it would be difficult to achieve or fulfill the desired organizational or personal objectives. According to Gomez et al., (2012), proper choices regarding training techniques by organizations ensure that employees are well equipped with the right skills and knowledge. Effective training and development lead to an increase in profits and levels of quality of production and this has compelled many organizations to perform training and development. Effective policies and strategies need to be developed by No Name to ensure that international performance management issues affecting it are dealt with completely. No Name Aircraft can reach effective international performance management through multiculturalism and geographical dispersion (Schuler, 2013). The two dimensions are balanced by using centralized and decentralized approaches. The decentralized approach is important in the process of developing strategies for evaluating performances based on the host country whereas the centralized approach ensures that the headquarters has complete control over other branches, therefore, ensuring that there are effective communication and management in achieving the set objectives. International organizations including No Name Aircraft are affected with high-pressure levels concerning how both the international and local markets respond thus creating the need for evaluating performances to deal with both local and international performance issues. It, therefore, means that the effectiveness and success of International performance management and appraisal depend on expatriates performances. Recommendations The company needs a solid plan and effective techniques to deal with these IHRM issues and some that the company can employ will be explained. The company could use several approaches in the process of training and development of employees. Wang & Wang (2012) present the three approaches that include reactive approach, proactive approach, and active learning. The proactive approach involves the process of developing competencies by including all the techniques of learning with corporate business techniques. On the other hand, the reactive approach is the traditional methods where technical knowledge and skills are delivered tactically and training is considered an event oriented activity. Active learning is an approach that trainees take a commanding role in the process by exploring problems and issues under the supervision of their facilitators. Several important steps are required to achieve effective training and development. First, it is critical to identify the need for training and development. Secondly, it is important to ensure that there are training and development internally. Finally, the organization should ensure that it sends its employees to external training sessions (Gardiner et al, 2010). The company through the efficient use of the centralized approach can perform international performance management effectively. The centralized approach which is already being used by the company but not effectively will ensure that effective communication exists between the company headquarters in Australia and its subsidiaries in the different countries thus the set objectives will be achieved. Organizational culture management techniques that can deal with the issues that the organization faces include awareness creation on culture quality, development of good company values and mission, and effective leadership. Besides, the company can also deal with the main contributors of organizational culture, which include power distance, uncertainty avoidance, individualism, and masculinity (Gordon, 2007). Diversity management issues can be dealt with by ensuring that policies and laws to govern diversity are put in place and enacted (Cooke, 2012). The company laws and policies in relation to diversity then need to be followed to the later with stiff penalties put in place to deal with employees that break them. Conclusion In conclusion, it is difficult to manage International Human Resource for any organization and therefore companies have to put in more effort in terms of organizational resources. The effort is aimed at avoiding issues such as those faced by No Name Aircraft which included issues on diversity management, organizational culture, training and development, and international performance management. All these issues can, however, be avoided by ensuring that resources put into human resource department are used in creating effective strategies which some were discussed above. Effective training and development measures and effective management of diversity and organizational culture are essential in ensuring that organizations achieve their goals and gain an advantage competitively over its competitors in the same market industry. References Brewster, C., Sparrow, P., & Vernon, G. (2011). International human resource management. 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(2012). Training practices and organizational learning capability: Relationship and implications. Journal of European Industrial Training, 28(2-3): 234-256. Gordon, A. (2007). The work of corporate culture: Diversity management. Social Text, 44: 3-30. In Machado, C. (2015). International human resources management: Challenges and changes. Kossek, E.E., Lobel, S.A., & Brown, A.J. (2007). Human Resource Strategies to Manage Workforce Diversity, Handbook of Workplace Diversity, 54–74. Schuler, R.S., Dowling, P.J., & DeCieri, H. (2013). An Integrative Framework of Strategic International Human Resource Management, International Journal of Human Resource Management, 5 (3): 717–764. Sengupta, N., & Bhattacharya, M. S., (2007). International human resource management. New Delhi: Excel Books. Tung, R. (2013). Managing Cross-National and Intra-National Diversity, Human Resource Management, 32: 461–477. Wang, G. G., & Wang, J. (2012). Toward a theory of human resource development learning participation. Human Resource Development Review, 3(4): 326-353. Read More