Human Resource Management in Scandinavian Economy - Research Paper Example

Human resource management Introduction With the advent of globalization in the economy, companies began to operate in the foreign shores. The operation of the companies needed employees to be hired in special positions. In this position, the human resource management has become an important issue. In any company; some key concepts of human resource management has to be fulfilled to become a successful hiring manager. The local and global concept of human resource management is not the same always. The underlying concept of the human resource management is the monitoring policy, which is evident in case of all types of business. The performance of each employee has to be observed under the critical eye of the human resource management team. A customized employee policy is followed through the working atmosphere in a company. Appraisals based on their performance and salary administration is maintained to materialize the objective of profit maximization with affirmative action of the employees. In order to hire some personals for a foreign subsidiary firm, different eligibility criterion and experience are notified for selection of a new manager. (What is global management, n.d) Due to globalization and increasing digitalized marketing technology, the issues regarding the management of abroad business has yielded a revolution. In this assignment, the company has to hire a new manager for its Scandinavian division. In this respect the human resource management team has to consider only those qualification and skills to pursue the goal required in the global market. Before hiring a manager for the foreign firm and setting its mandatory qualifications and experience, knowledge about the specified country has to be under the grip of the human resource management. This will help in understanding market scenarios of the country or the region and any political or social risks associated with it. In order to send a qualified person he/she has to learn about the behavior, the culture and the traditional background of the economy. This will enhance not only his intelligent quotient but also comprehend the emotions and sentiments of the residing people. Let us begin with the description of the political and social nature of the Scandinavian economy. Scandinavian economy and work related issues Three particular countries come under Scandinavian economy. It is a region of Northern Europe incorporating Denmark, Norway, Sweden and frequently Finland and Iceland. Despite of many wars and economical instability in the region, it has been politically sound and culturally valuable. Today, the countries in the region are basically decentralized in major proportion. In spite of the historical background of these countries, the labor relations are very crucial. It pertains no government interference in wage determination. Rather the company itself decides the bargaining structure of the payment. The national or the industry level of wage determining models is not accepted in these regions. The trend even shows that increasing adoption of variable merit-or-performance-related payment in European countries. (Michel and Slomp, 1990). In comparison to this, there has been a low rate of practice of this kind of payment methods in the Scandinavian countries. One aspect of human resource management in addition to hiring of skilled and efficient managers is giving ample time for training and development of the employees. This will give an impetus to the determination and the power to work with maximum effort. In respect to this important determining factor, training, and development, the Scandinavian countries devote only 2-4% of payment towards it. It can be stated that in order to hire a manager for the Scandinavian sector of the company, the qualified personal has to be aware of the above-mentioned risks associated with working environment and the employees’ related issues. (Michel and Slomp, 1990) Qualities in a manager- Scandinavian division In a successful strategy of running a company, it is the responsibility of a manager that should be the most vital and inseparable part of it. The managers are brains in guiding every other employee the direction and executing the existing directions in which the company should operate. With the overseas strategy of a company, the managers hired should be properly allocated, or else a wrong person in the wrong position will lead a catastrophic change in the company. The skills required for an international manager will not only lead growing business but the person in charge will act as the global pituitary. He will serve as the ambassador to the concern economy. Being a manager it will also have to be a leader or the figurehead for the enterprise. The role of a manager requires speaking and communicating with the residents of the country in their local language or any internationally acclaimed foreign language is necessary. A greater strength will be if one has the capability to read and write also. Here, for recruitment of a manager in the Scandinavian division requires a preferential knowledge of reading, writing and speaking of Scandinavian language or the North Germanic language. This will help the hired manager to be coherent of the requirements of the clients as well as the demand of the employees. The aspect of emotional intelligence will be an artifact to take the company to the summit of success. Despite of the linguistic skills, one should have the maturity level of understanding and analyzing through his work and experience. An inspiring level of attitude gained from at least considerable years of experience in the local division of the concerned company or any other international organization is mandatory for an international manager. The personality and the presentation should be appealing to its international clients and the employees of the working place. The core intelligence should be reflected in his emotional intelligence level to adopt a diplomatic approach to understand the relationships in the business scenario. Along with this entertainment is a vital part for client meetings. The international manager should have the inherent potential to combine the cultural and the social feature of the economy concerned. In the Scandinavian region, the culture and the traditional values are important to the people. So, business dealings with the culturally strong people should be dealt in a very diplomatic and social way. The enthusiasm to work in the Scandinavian region should be seen in the functioning of the company under the control of the hiring manager .In Scandinavian division, the monitoring system might not be working at par with the other European countries. So the level of shirking and neglecting one’s work is at an increased level. Even the mechanism of merit-based-payment is not that much pronounced here due to the existence of centralized government. Thus the manager, for this particular region has to take adequate steps in order to prevent the shirking of the employees for the efficient functioning of the firm. (Uthaisangchai, n.d) Qualities in a global manager A person with a strong heart and possessing the quality of company leader and an expert is required for handling the foreign firm. They should be depending on their prior industrial knowledge to navigate the company in a right direction towards the destination of success. With the onset of globalization of the market, the consumerism has also increased worldwide. The demand for a particular commodity bundle is growing and creating new challenges to face any market, inflation, as well as foreign exchange risks. In a global scenario, the most companies have to face the foreign exchange risks in respect of diversification of international portfolio, and the most important to utilize foreign investments for increasing the value of the firm and minimizing the weighted average cost of capital. If there is appreciation of the dollar value then, the number of dollars required to buy a given amount of foreign currency is decreased, thus alternatively leading to a depreciation of the foreign currency value. These are taken into account in order to give proper leverage to the subsidiary firm. The prospects of foreign business incorporate both negative as well as positive sides. (Uthaisangchai, n.d) At one pole, the risks associated with inflation rates, interest rates, and political scenario and foreign exchange risks; there has been a great prospect in bringing in an overall profitable investment by the process of cross-border listing of firms. This not only improves the image of the local firm in the foreign market, the asset price also rises, and the operational and the organizational feature of the firm develop. This lowers the rate of shirkers who for their own benefits have always been concerned with the selfish mean to seek profits. The global market has given a positive feedback in the rising demand for the products among the foreigners. The level of profits is also massive as compared to the local operation of the business. It has also been empirically proved that the firm, which has tradable assets in the foreign firms, is more informative of the market sensitivity and exposure. The base of management also diversifies for the benefit of the local company. A global manager should know the ways to conduct and manage the business activity overseas. Even a manager who has been proved efficient in the home country may not understand the international working environment and do not have the potential to organize the global business. To be an international manager one has to have the strong desire to travel abroad, excellent technical and analytical skills. As mentioned earlier an overall knowledge of the foreign culture, tradition, academic background, and good language power are some of the important prerequisite skills for an international manager. The flexibility in the personality of an international manager is the weapon to grown the foreign business. The ability to connect him to international business environments is the latent talent of a manager. He should have the attribute to solve out problems spontaneously and communicate easily with all people hailing from different cultural backgrounds. The understanding power of unstable political and fiscal systems of Scandinavian division should be properly addressed in executing the business plans. In a foreign country a multicultural human resource or workforce exists which should be inscribed in the brains of manager to have a fair deal with the employees. This requires a new dimension of leadership, organization, goal setting, planning and operational control over the firm. The business planning required for every country is different with each other. (Towers, n.d) Issues and Challenges Even, though the globalization has lead to many prospective challenges, the negative impact percolate in the gradual ownership of the foreign authority of the home country firm. These challenges relating to the market of foreign region should also be handled in a proper manageable way. The different forms of challenges should never be underestimated and the manager appointed for the foreign firm should place himself in the middle of the sea and start a voyage to promote the functioning of the Scandinavian firm. The strategy followed for the home country should not be applied here due to the existence of political, social, and cultural diversity. Every individual of the firm should understand every solution of the problem, so that one person is not blamed for any mishap of the firm. The manager should also have the desire to learn and discover newer ideas and come out with various forms of profitable projects. In Scandinavian region, the place has a historical importance, so major emphasis of new undertaken projects should be on the historical backdrop of the region. The horizon of the Scandinavian region will bring many different forms of business strategies for the company, so the manager should be very focused on the methods adopted to establish a pioneering business growth. One should gain the knowledge of the economic and political history of the Scandinavian region, and apart from that, the manager should be well versed with the understanding and proper judgment of the language, and social environment. (Lane, Maznevski and Distefano, 2006). A manager should not only have an experience in working as an efficient manager, he should also have the knowledge to work in an international arena. With the business and market getting internationalized, the role of the managers has to face a lot of hurdles in the overseas. The skills and qualifications of overseas managers should be quite different from the manager of the home country firm. The human resource management should select managerial personals in such a way that they have the ability to consolidate an already running enterprise and expanding the business in a new environment. So, the human resource management should be very careful in the recruitment process for engagement of overseas managers’. (Barhem and Younies, 2008) Several problems even occur if an experienced but having a poor knowledge of the country specific language manager is hired in the foreign division. A culture shock occurs when the person in charge has to encounter people coming from different diversified culture. A state of confusion, mental agitation, poor concentration in the work, frustration attacks the manager and he fails to prove himself in the international front. So, the most important qualification required while hiring a manager is his capability to manage diversity as well as international business. “Social intelligence”, (Barhem and Younies, 2008) i.e. the ability to observe and differentiate people on the basis of their moods, emotions, reactions, motivations, and also their intentions should also be under the grip of the new manager. For, working in the Scandinavian region, the manager has to understand that people of the concerned country like Denmark, Sweden and Norway are more ultra-fashionable but also sensible in any critical situation. They are politically more nurtured or rather stereotypes with a willingness to empower women for ruling than man. So, the manager should also be politically sound and also at any point of economic crisis he should consult all, the working people of Scandinavian region for their sensible and modest opinion. Swedish people are more effeminate while the Norwegians are rustic by nature. So, an equal importance of men and women should be given in the office and should not be discriminated on the basis of weakness and ineffective characteristics. Usually, people are often shy and reserved, so, while a decision making and goal setting, the manager has to seek their thinking orientation because they are honest, sensible and is also respectful of laws of Scandinavian region. The socialist nature of the Scandinavian people has to be kept in mind as they can easily be over swayed with a revolutionary zeal if not given proper credits for their efficiency. The manager should also have an advanced monitoring system so that the efficiency level of the employees is maximized, as residents are usually inclined towards boozing over day and night. If, properly managed the business environment and the workforce, the inventive, the great thinking power and the self-sufficient Scandinavian people will be of great help to the global manager. This will enhance the all-round development of Company personals as well the lead to a flowering business growth. The environmental change should be taken a global challenge to the international manager. (Towers, n.d) Conclusion We see that the human management team should understand that for international manager, the knowledge of worldwide contacts and social networking is an essential to run a business abroad. Apart from that the managerial skills to tackle cultural dynamics and a multicultural workforce should be instilled in the global manger. He should be having the desire to work abroad and deal with any unexpected social or economic change. The linguistic skills of the foreign language will be as a promoter of international growth. The hired manager should be aware of the globalization effects and prospects in taking the company to the peak level of success and gaining an international image. The minimum requirement for a manger to work abroad is to understand the human resource motives and their intentions, to determine strategic management, production mechanism, financial management, ethics and social responsibility of the company, prospects of international business, corporate governance as well as get accustomed with the laws and legal issues of the foreign country. The job of the human resource management team is one of the most important ones given the importance of the situation and the position of the foreign manager. Selection of the most appropriate candidate is of prime importance for the development of the organization. References: Barhem, B. and Younies, H. (2008). Ranking the Future Global Manager characteristics and knowledge requirements according to UAE Business Managers Opinions. Retrieved on June 18,2010 from: www.gcbe.us/2008.../Belal%20Barhem,%20Hassan%20Younies.doc Lane, H.W, Maznevski, L.M and J.J. Distefano. (2006).International Management Behavior. Oxford, UK: Blackwell Publishing. Michel, A and Slomp, H. (1990). The Role of Government in Collective bargaining: Scandinavian and the Low countries. Scandinavian Political studies.13(1), Retrieved on June 18, 2010 from: http://doc.utwente.nl/58309/1/Michels90role.pdf Towers, B. (n.d). The handbook of human resource management. Oxford (U.K). Blackwell Publishers Limited. Uthaisangchai, P. (n.d). Qualities of successful international manager. Retrieved on June 18, 2010 from : http://www.bangkokbank.com/download/Week%2025%20Qualities%20of%20a%20sucessful%20international%20manager.pdf What is global management? (n.d) .Degree directory. Retrieved on June 18, 2010 from: http://degreedirectory.org/articles/What_is_Global_Management.html Read More