International HRM and Organizational Behavior - Essay Example

International Human Resource Management and organisational behaviour Introduction Any organized human activity, which is done in-group, will be most times constituted into structure called organization. So, organization is a structure with a ‘collage’ of humans or workers doing their allocated work under the supervision of a leader, for the benefit of the organization as well as them. So, the workers only form the crucial ‘cog’ in the running of the organization. And, only if these crucial workers are recruited or staffed optimally through an effective staffing process and Human Resource Management, the organization can achieve optimum success. In the case of running an enterprise or organization, the staffing function is a continuous process, and so the leader or the manager particularly the Human Resource Manager should perform the staffing function at all times. It is necessary that the management must ensure a constant availability of sufficient number of efficient employees from managers, executives, technical persons to labourers, for the efficient functioning of the enterprise. Overall, the selected personnel should be physically, mentally, emotionally and temperamentally fit for the job. This can be achieved by adopting or by having an optimal staffing process. According to Koontz and O’Donnell, “The managerial function of staffing involves managing the organization structure through proper and effective selection, appraisal and development of personnel to fill the roles designed into the structure”. This optimal staffing process and the resultant optimal performance of the organization will differ according to the nature or the type of the organization. That is, organizations may be divided into national firms and Multinational firms. National or indigenous firms are normally started or established by the ‘sons’ and ‘daughters’, or citizens of a particular nation, while Multinational companies (MNC) will be established in particular nations by foreigners, with the native people only playing a secondary role. Due to this difference in origination, the staffing process for these two types of organization will differ. So, this paper will discuss the perspective that staffing a Multinational Company is fundamentally different from staffing a national firm, by analyzing it through case studies. Analysis Recruitment forms the first and the main part of the staffing process, whatever is the type of the organization. The HRM perspective stresses that each activity including Staffing should form part of the whole process of people management. (Price 2002) Normally, organizations or its management or its leader in the initial stages will recruit or build a working group of employees, by associating individuals who came from the same ‘stable’ like friends, work mates, family members, etc. This mainly happens at the start of the organization. Then, as the organization continues to function, setting different targets, it will give rise to different needs, necessitating recruitment of new employees. These employees will be recruited based on their education, skill level, knowledge, experience, attitude, etc. That is, as Schein (2004, p.261) said, “... best way to build an organization was to hire very smart, articulate, tough, independent people and then give them lots of responsibility and autonomy”. So, recruitment particularly recruitment of apt employees forms a key part of the organization’s functioning or even its survival. Thus, recruitment is the discovery of the staff member for the present and future jobs in an organization. The success of any recruitment depends upon the procedure followed by the company, so that apt employees are recruited. This applies to the Multinational as well as national companies, but the crucial difference is the background of the employees recruited. In a multinational company, the workforce recruited as part of the staffing process will show a lot of diversity. That is, as MNC’s are organizations which are established on foreign shores, it would have ‘collage’ of workers. As mentioned above Organization is a ‘structure’ where ‘collage’ of workers will do their allocated work. This team of workers like the five different fingers in one’s hand; will be different from one another having different characters, attitudes, education, background and importantly ethnicity, thereby bringing in the diversity element. So, in case of MNCs, staffing of these diverse workers under the concepts of International Human Resource management (IHRM) will be the common feature. That is, MNC will be composed of workers from three national or country categories, when they are recruited to fulfil the various needs of the MNC. The employees from the parent country where the firm is usually headquartered or based (or came from) are called Parent Country nationals (PCNs). The employees from the host country where a subsidiary or MNC may be located are called host country nationals (HCNs). Finally, there will be third or other countries which may be the source of labour, finance, research and development, and the employees from these countries are called third country nationals (TCNs) (Scullion & Collings 2006). These all three groups of workers or at least the first two groups of workers will normally be recruited by MNCs, to fulfil certain needs and also as a form of necessity. MNC are some times forced or duty bound to recruit employees from the host country. That is, MNCs mainly set up their subsidiaries or units in other countries, to tap the resources of the host country and thereby earn benefits from it, and so it is normal or necessary for those MNC to give a share of their benefits, back to the people of the host country. The benefits for the HCNs will be mainly given by the MNC, through maximum recruitment of them. That is, HCNs according to their skill, knowledge, experience, attitude, etc will be recruited by the MNC and HRMs for various positions, thereby fulfilling the necessity. Apart from fulfilling the unwritten rule of giving employment to the locals, this recruitment procedure will also benefit the MNC in other ways by providing them surplus and some times cheap labour. So, MNC by recruiting HCNs can strike two blows with a single stone. But, some times, MNCs stationed in foreign countries will discriminate the HCNs on the basis of religion, race, caste, sex, etc. In host countries, there will be different religions or cultures or castes, etc, and if the MNCs without understanding their uniqueness and importance, ignore workers from these backgrounds, it will lead to the failure of the staffing process, as the whole organization will come under fire. So, the IHRM policies of MNCs should be optimized to include HCNs in their functioning, so that discrimination charges are nullified and also appropriate employees are recruited. According to Harzing & Ruysseveldt (2004), MNCs while staffing its organization will follow three management approaches, based on the place from where the employees are recruited. Firstly, they may follow the polycentric approach and recruit the locals to the top management team, so that the host country’s management techniques, concepts, etc, are imbued in the functioning of the MNCs. MNCs that adopt a polycentric approach explicitly recognizes differences between countries and believes in local managers and employees. So, the MNC which follows this approach will fill the important management posts with local nationals to ensure easy assimilation and integration on the part of the managers as well as workers, While, MNCs with an ethnocentric approach fill all top management positions with home or parent country nationals, as they think that their own management style, knowledge, evaluation criteria, and managers are superior. MNCs also follow this approach to ensure that their own successful practices are replicated in the subsidiaries as well. Apart from these two approaches, Multinational companies sometimes adopt a geocentric approach. Through this approach, the best manager is drawn from a worldwide pool of managers, irrespective of their nationality, to ensure that effective performance is provided by him/her. Under this approach, managers can be appointed at headquarters or subsidiaries regardless of their nationality. After the local or appropriate employees and managers are recruited and apportioned, according to the needs of the MNCs, the MNCs will start to work. And when the role of these local managers and employees are analyzed from the perspective of decision making and autonomy, there are three theories. “They are: limited autonomy, variable autonomy and negotiated autonomy. According to the theory of limited autonomy, the degree of autonomy will depend on the MNCs approach to globalization. The theory of variable autonomy states that the degree of autonomy varies with the degree of internationalization of the company. Companies that adopt an negotiated strategy can afford to have centralized decision-making. (icmrindia.org).Then, in course of their functioning, MNC can also recruit more staffs to “develop local talent through in-house Management Development Programs (MDP). These programs will help improve the coordination between employees with diverse cultural, religious and educational backgrounds”. So, in case of the MNCs, the recruitment part of the Staffing processes, will follow certain rules or path and it will be quite different from the staffing process in the Domestic or national firms. In the case of national firms, the need to incorporate ‘pan-nationality’ may not arise all the time. That is, national firms are not required to recruit employees from foreign or different countries, and so they can fill the various posts with prospective and importantly qualified job seekers from their own country. There will be qualified and equipped individuals in the vicinity of the firm or in the nearby cities or states, and recruiting them will bring a uniform culture to the organization. Even though, staffing the entire organization with employees from the home country will bring in uniformity, many organizations in contrast to uniformity intentionally may bring in or will be duty bound to bring in the diverse elements. Diverse elements in the sense, employees recruited by the national firms will come from diverse groups within the country, thereby integrating the diversity aspect. When organizations did not have this diversity aspect, totally or not up to recognizable levels, they will introduce recruitment programs or strategies in liaison with HRM, to recruit and assemble ‘collage’ of workers. This incorporation of diversity will bring in many benefits and could also raise the image of the organization among diverse group of people. This aspect of staffing a national firm, which is quite different from staffing a MNC, will be analyzed by case studying the American company, Nike. Nike, the leader in manufacturing and supply of athletic shoes, apparel and sports equipment, carried out a diversity program as part of its national operations. Even though, Nike is a global company functioning in more than 500 locations in 45 countries all over the world, it functions as a national firm in its base in United States of America. While recruiting the employees for its national operations, Nike incorporated diversity element by recruiting employees from different diverse groups. They started this practice in 2005. “Two years ago, Nike set out on a five-year journey to make the company an Employer of Choice. We said diversity could be a competitive advantage. … Our commitment to diversity is an integral part of Nike’s identity as a company” (nike.com) Initially, Nike and its HRM introduced diversity programs into its functioning in co-operation with six employee networks, which were established by Nike themselves in 1990’s. These networks, consisting of the main minority segments of the population, liaised with the officials of the HRM department of Nike and introduced as much people from their segments into the organization. The six Nike networks each containing a minority group are Networks of African-American, Asia Pacific, Disabled Employees & Friends, Gay, Lesbian, Bisexual, Transgender, Latino & Friends and finally Native American (nike.com). Through this diversity programs, Nike intended to recruit some of the brightest and talented individuals from the groups or sections of population, who are not given adequate opportunities due to their allegiance to particular group and its way of living. Nike is also hoping that these diversity programs will bring in many dynamic people from different backgrounds, who can enrich the creativity and innovation part of their business. Apart from these employee centric outcomes, Nike through this initiative mainly intends to build a positive image about the company in the minds of the customers, all over the world. This positive image will bring in many benefits to Nike and its HRD (Human Resource Department), like elevating its brand image, easier identification of Nike’s products particularly among the ‘minority’ groups (who will be happy with Nike for recruiting one of their kind or group members). “Diversity heightens the stature and belief in the brand and within our culturally diverse consumer base. “ (nike.com). So, Nike introduced this diversity program to recruit talented group of workers from diverse population and thereby improve its brand image. While implementing this diversity program and recruiting employees, Nike’s leader does set or follow any set criteria. That is, employees are mainly recruited based on skill and capabilities with individuals from certain groups, given little more importance than his/her competitors. So, there are no quotas allocated to the minority groups, only the opportunities for them will be more than others. So, Nike and HRM recruit employees on the basis, whether they will be productive to the company. “We need to be aware of what every person is about, what they think, what they like, and what they don’t like. It’s not enough just to hire for a diversity of gender and color. We need to hire a diverse workforce that thinks differently.” (Hoke qtd in nikebiz.com). After the introduction of diversity programs, Nike was able to increase the staffing or proportion of people from ‘minority’ groups to recognizable levels. For example, among the persons who hold Executive and Senior manager positions in Nike, 14% belong to the people of color, consisting of the main minority groups of U.S. Apart from the recruited employees, there is also a good number of suppliers coming from the minority groups. Due to this appreciable staffing process and its success, Nike was awarded honours by many organizations. Nike was added in the list of Worlds Most Ethical companies (2007), released by the Ethisphere Magazine. “…analyzes companies that go beyond making statements about doing business ‘ethically’, to translate those words into action." (nikebiz.com). Also, Nike was able to achieve 100 percent ratings in the Human Rights Campaign’s Corporate Equality Index Survey, due this staffing process, which is based on recruiting employees from diverse groups within the country. So, the main difference in the staffing process between the MNCs and the national firms is that, in MNCs employees will be recruited from three or two different national categories, while in the case of national firms like Nike, the employees will be mainly recruited from a single national category, but from different diverse groups After recruiting the new staffs, organizations should also train the recruited staffs and also the old employees as part of the staffing process. That is, when the recruited and the existing employees fall short in their performance, mainly due to lack of skill and knowledge about the process, they can be trained. In competitive environments, every organization including MNCs and National firms should keep on upgrading its product and services, and for that, the employees have to be upgraded first. Likewise, before the ‘greenhorns’ are placed in highly responsible positions, they need to be given necessary training. Actually, after the recruitment and apportionment is done, a major part of the staffing process will be over, with the employees in both the MNCs and the national firms prepared to start the work as soon as possible. But, sometimes or most times, the recruited employees should need to be given training to integrate or assimilate with the working environment and importantly fulfill the work needs. In times of training, employees of the MNC will be trained in both the host country as well as in the parent country of the organization. That is, the work practices, work culture and ethics of MNC will be imbibed in the newly recruited workers by taking them to the parent companies and training them there, based on the International Human Resources practices. In the case of National firms, the training will be mainly done in the home country itself, with the aid of experienced staffs, particularly from the HRM. That is, as part of the staffing process, the employees will be trained in the local language itself, by the company’s staff and HRD in a proactive manner, thereby optimizing their skill and knowledge level. Sparrow (1999) argues that HR managers must be proactive, willing to take risks, able to train, delegate and trust staff, etc (qtd. by Joynt and Morton, 1999). An wholesome in-house training will do a world of good for the employees, as they will become equipped skill wise and knowledge wise, and will be able to undertake theirs allocated work with renewed confidence. “Good management consists in showing average people how to do the work of superior people” (Rockefeller). Conclusion Unison of humans into a team, with an urge to usher the organization into a successful ‘territory’ will actualize, only if the workers show optimum functionality. But, as a kind of cycle, only if apt, qualified, equipped workers are recruited, they could exhibit optimum functionality. For that, as discussed in this paper, the staffing process of the organizations has to be optimum. And when it comes to Multinational companies stationed or located in foreign lands, the staffing process will have to be implemented in a different manner, due to the nationality or demography or the background of the prospective employees. And, when it comes to National companies, the staffing process will be based on the diversity of the country or the society. Reference: Harzing, A.W & Ruysseveldt, J.V. (2004). International Human Resource Management. SAGE icmrindia.org. Management of Multinational Corporations ( MNCS ). Retrieved March 11, 2008 from http://www.icmrindia.org/courseware/Management%20of%20Multinational%20Corporations/MNCs-DS10.htm Joynt, P, and Morton, B. (1999), The Global HR Manager – Creating the Seamless Organisation, CIPD, London Koontz, H & O’Donnell, C. (1972). Management. McGraw-Hill nikebiz.com. Awards & Recognition. Retrieved March 7, 2008 from http://nikebiz.com/company_overview/awards_recognition.html nikebiz.com. Diversity. Retrieved March 7, 2008 from http://nikebiz.com/company_overview/diversity/learn_more.html nike.com. Employees and Diversity. Retrieved March 7, 2008 from http://www.nike.com/nikebiz/gc/r/fy04/docs/employees_diversity.pdf Price, A (2002), Principles of Human Resource Management: An Active Learning Approach, Blackwell Publishing Rockefeller, J. D. (2001). Church Champions Update Schein, E. H. (2004). Organizational Culture and Leadership, 3rd. ed. Jossey-Bass Scullion, H & Collings, D. G. (2006). Global Staffing. Routledge Read More