Contemporary Issues with International Human Resource Management - Coursework Example

CONTEMPORARY ISSUES WITH INTERNATIONAL HUMAN RESOURCE MANAGEMENT By Location Introduction The success of cross-border business operations is much attributed to the reduction in trade barriers, and this explains why developed countries pursue marketing opportunities overseas (Teerikangas, Stahl, Björkman, & Mendenhall, 2014). Amidst the increased interests in foreign direct investments through cross-border mergers and acquisitions, the success of multinational corporations depends on their effectiveness and competency in international human resource management. Human resource management issues at the international level are typically contemporary issues with the management of the workforce at the domestic level though there are some areas in IHRM that require special focus (Stahl, Björkman, & Morris, 2012). The changing face of business competition at the global level is forcing companies to change their approach to managing human resource at home and abroad. The changes are occurring due to many factors including technological advances, short product life, and high-speed communications (Teerikangas, Stahl, Björkman, & Mendenhall, 2014). In this case, management approach at the international level, for instance, focuses on developing communication systems that ensure that there is a high level of involvement among the employees. Moreover, organisational structures must be flexible to adapt to the ever-changing global economic market (Teerikangas, Stahl, Björkman, & Mendenhall, 2014). The changes in organisational functions compel international human resource managers to possess skills that will enable them meet the goals and objectives of their organisations. Therefore, the changes brought about by globalisation imply that traditional human resource management roles must focus on developing policies to help manage the diverse workforce in terms of culture, race, ethnicity, political affiliations, and religious beliefs (Weber, & Yedidia Tarba, 2012). By definition, international human resource management refers to the set of activities that helps in managing human resources at the international level in order to achieve objectives of an organisation especially gaining competitive advantage over industry competitors both nationally and internationally (Teerikangas, Stahl, GK, Björkman, & Mendenhall, 2014). Therefore, the focus of this paper is to discuss why it is important for international human resource managers to be flexible, good at communicating ideas, problem solvers, and adequately prepared to handle diverse workforce in different environments. Literature review Functions of International Human Resource Managers Planning is a human resource management function that changes at the international level. In this case, planning requires the human resource manager decide on the way best to go about business globally where he or she has developed comprehensive plans for implementing objectives of the business entity (Stahl, Björkman, & Morris, 2012). A good plan allows the human resource manager to develop a strategy for organising various activities, a function that also gets more complicated with international tasks (Shah, Yusaff, Hussain, & Hussain, 2012). Coordinating the human resource at the international level require firms to ensure that all their plans align with the existing culture of the host country (Stahl, Björkman, & Morris, 2012). Human resource management has the role of recruiting employees, a function that requires the human resource manager to ensure that the staffing activities are in line with the goals and objectives of operating at the international level (Shah, Yusaff, Hussain, & Hussain, 2012). Stahl, Björkman and Morris (2012) confirms that good staffing is very crucial to the success of an organisation operating at the international level that requires proper hiring and development of the employees. The international economic market is culturally diverse, and this makes the directing function of the human resource manager a bit complex (Shah, Yusaff, Hussain, & Hussain, 2012). On the other hand, an international human resource manager should have knowledge on how attitudes towards work differ with employees from various countries implying that he or she must be flexible in problem-solving. For instance in Germany and France, informal relationships with the employees are highly prohibited but countries like Japan and Sweden permits employer-employee relationships thus participatory leadership is the most suitable for such situations (Stahl, Björkman, & Morris, 2012). Therefore, international human resource manager should be able to identify the incentives that various cultures use to direct employees. Stahl, Björkman, & Morri (2012) also postulate that an International human resource manager is in charge of controlling activities within the organisation by communicating commands for undertaking various job tasks. However, language barrier, geographical distance and dispersion as well as legal constraints pose tremendous challenges to extent to which an international human resource manager controls all activities within the organisation (Shah, Yusaff, Hussain, & Hussain, 2012). At the international level reporting, meetings and inspections are part of a firm’s international control system thus the IHRM manager must be in a position to carry out these functions correctly (Stahl, Björkman, & Morris, 2012). Expatriates Management Bonache and Noethen (2014) identify a significant problem with the selection and recruitment of employees at the international level is expatriate failure that has always become a crisis for the Multinational Corporations. Several literatures explain the reasons behind the failures. For instance, failure to adjust to cross-cultural differences, as well as problems from the families or spouses and poor performance, may be responsible for the failed international assignments (Kyvik, 2013). Other literary works attribute expatriate failure to error in the selection process stating that in most cases, international human resource managers select expatriates based on their technical capability or competence (McEvoy, & Buller, 2013). In fact, most IHRM managers ignore other factors like the interpersonal skills of the expatriate. According to McEvoy and Buller (2013), interpersonal skills assist expatriates in cultural adjustment. Different literatures recommend various approaches to managing expatriate crises and these measures can help the multinational corporations to improve their capabilities in IHRM. Some of the initiatives for effective management of human resource include features like the length and nature of the planning for training and selection of expatriates to handle overseas assignments (McEvoy, & Buller, 2013). Also important, as an aspect of expatriate management, is the return of the particular workforce. Moreover, the expatriate management plan should include subsequently assigned jobs for the expatriates as they return to their home countries (Bonache and Noethen, 2014). Therefore, international human resource managers must develop comprehensive plans for addressing the effects of expatriate failure that must also involve accounting for both direct and indirect costs (Bonache and Noethen, 2014). Direct costs in this context include training costs, salary, relocation and travel expenses (McEvoy, & Buller, 2013). On the contrary, indirect costs include loss of the market share, problems with the host government and the always burdening demand that the citizens of the host country should replace the returning expatriates. (Bonache and Noethen, 2014) recommend that it is necessary for human resource managers who are assigned international duties to use certain selection traits or characters that are predictors of the success of the expatriates. Some of the characteristics include cultural empathy, technical ability, diplomacy, adaptability, positive attitude, language proficiency, family adaptability, maturity, and emotional stability (McEvoy, & Buller, 2013). Other literatures identify some of the factors behind the success of expatriates including their technical competence on the particular job, personality traits, environmental variables, and family situation. Managing a Culturally Diverse Workforce International business operations especially mergers and acquisitions have always brought different cultures together thus human resource management at the international level must focus on how to harness these various aspects cultures to create an organisational environment that values mutual understanding between different cultures (Kyvik, 2013). Cultural difference is a crucial factor to consider during cross-cultural communications since it is a critical determinant of international negotiation (Ting-Toomey, 2012). Culture, in this case, refers to various elements of the particular society or market economy like language, religion, political affiliations, and social structures. Communication is a crucial function of human resource management and it becomes more complicated as the operations go beyond the domestic levels. The implication is that international human resource management has the task of initiating effective communication with the business partners both in the home country and abroad (Ting-Toomey, 2012). Nonetheless, IHRM managers must put strong emphasis on cross-cultural communication since it is the basis for the organisation’s success (Teerikangas, Stahl, Björkman, & Mendenhall, 2014). A point to note for managers of MNCs is that most business entities operating at the international level fail because they barely make efforts to understand common cultures and this becomes a big challenge during communication (Teerikangas, Stahl, Björkman, & Mendenhall, 2014). According to Bariscoe, Schuler, & Tarique (2012) good communication promotes employee motivation, lays the foundation for integrative decision-making, improves employee attitudes, and plays a significant role in the manner in which people socialise in the entire organisation. Without cross-cultural communication incentives, operations at international levels may not run smooth because they will be negative implications on the employee performance as well as overall productivity of the firm (Banutu-Gomez, 2014). Another issue of great importance when operating at the international level is cross-cultural negotiations. In fact, intercultural negotiation is one of the specialised areas of the cross-cultural communications that international human resource managers must give much of their attention (Wilken, Jacob & Prime, 2013). To gain competitive advantage in the international market, the IHRM manager must first develop programs for training employees and the executive management in cross-cultural negotiations especially on the strategic functions like sales representation (Yagi, & Kleinberg, 2011). Personality traits of international human resource managers According to Stahl, Björkman, and Morris (2012), international human resource management involves dealing a diverse market in terms culture especially in language, ethnicity, race, religion thus the human resource manager to adapt to this variability in culture. On the other hand, the manager should be flexible as changes are always eminent in the international economic market with new technologies changing process of manufacturing goods and services. Due to the dynamism of global economy, human resource managers should also be responsive to market changes by being keen enough to identify opportunities in the market (Teerikangas, Stahl, Björkman, & Mendenhall, 2014). Besides, the human resource manager should be able to speak a couple of foreign languages as this overcomes the problem of the language barrier. For example, economic markets like Singapore are thriving because they encourage their workforce to be multi-lingual (Stahl, Björkman & Morris, 2012). There is a strong emphasis on cultural competence of international human resource managers; thus they embrace cultural diversity in all decision-making processes. Discussion After the literature research, this essay comes up with the following discussion: Functions of international human resource managers Although international human resource management involves the same duties as the domestic management functions, there is a need adjust to the variable environments at the global level (Stahl, Björkman, & Morris, 2012). In this case, international human resource managers should take note of the changing roles at the international levels since their functions are transferred to foreign markets. When undertaking the typical planning functions, for instance, the IHRM decides whether, for example, to export, enter joint ventures and operate as an MNC within a foreign country. The planning function also involves developing forecasts, plans, and goals for international activities where the human resource manager conducts close monitoring of the entire market. The manager should identify factors in the foreign markets like political stability, domestic competition, currency stability, trademark, and patent protection (Teerikangas, Stahl, Björkman, & Mendenhall, 2014). Organising as a function of traditional human resource management also requires close attention from the international human resource manager protection (Teerikangas, Stahl, Björkman, & Mendenhall, 2014). In the US, for example, the predominant culture is that long-term plans should take at least five years though other countries may prefer shorter periods, an important factor to consider when organising activities at the international level. On the other hand, organisation at the international level enables the firm to adapt to the environmental and cultural differences. Therefore, an international human resource manager should be aware that his or her function involves organising the activities so that the firm can respond to the needs of foreign customers, suppliers, and employees (Stahl, Björkman, & Morris, 2012). International human resource manager must also consider the structural changes that organisations operating at the international level undergo. Staffing or employee recruitment is where the IHRM make decision on the number of managers as well as personnel that the company will require from the domestic labour force and also involves the decision on whether to transfer the firm’s home-based human resource (Stahl, Björkman, & Morris, 2012). For instance, the US companies find it very convenient hiring the local workforce with a few expatriates because it is costly to assign the US based employees to overseas positions. Besides, the human resource manager should consider other factors such as extra expenditure of expatriates like higher pay, moving expenses, education benefits, housing allowance, taxes, and company car (Shah, Yusaff, Hussain, & Hussain, 2012). In this case, the international human resource manager must consider the cost of exporting expatriates where the focus is to ensure that expenses on hiring expatriates do not overshadow the revenue the company accrues from the international operations. Directing is also a human resource management function that requires close attention from the IHRM manager though it is quite a challenge directing employees with diverse cultural backgrounds (Shah, Yusaff, Hussain, & Hussain, 2012). However, the best way to minimize cultural difference problem is by training the human resource managers in cross-cultural management. In this case, such training involves encouraging the manager to interact with various cultures and also able to value workforce diversity in terms of ethnicity, race, religion, and political affiliation. Moreover, the human resource manager should take note of the changing leadership style as operations move from one country to another Controlling as a human resource management functions become a significant challenge if an organisation engages in a larger scope of business operations especially in diverse environments (Shah, Yusaff, Hussain, & Hussain, 2012). When undertaking the controlling functions, a point for the human resource managers to take is that many countries emphasise on worker’s benefits like pensions, holidays, bonuses, and vacation. Besides, most countries legally mandate these benefits thus they become fundamental rights of the employees. On the other hand, international human resource managers while executing their controlling functions must wary of the powerful unions in most parts of the world whose demands restrict the efficient functioning and freedom of IHRM. Expatriates Management As globalisation drives companies to international markets, the Multinational corporations are increasingly using expatriates to handle strategically critical international assignments (Bonache, & Noethen, 2014). In this case, the role of IHRM should not only use expatriates for expertise reasons and corporate control but also utilize them in facilitating entry into new markets and also take advantage of the unique skills to develop competencies of the international business management. On the other hand, it is vital for the international human resource managers to use these expatriates for effective coordination of business operations. However, poor expatriate management has plunged some MNCs into crises. For instance, MNCs face the challenge of failed assignments when there is premature return of their expatriates and also face the problem of losing the returned expatriates because of poor repatriation (McEvoy, & Buller, 2013). The problems occur because most International human resource managers engage in poor management of the expatriates that eventually threatens the performance of the organisation as well as its capability at the global economic market. To avoid challenges with expatriate management, managers should plan effectively for human resource especially when selecting expatriates to handle overseas assignments (McEvoy, & Buller, 2013). The IHRM resource must also attend the return of all the expatriates and should ensure that there are subsequent jobs for the returned expatriates. Expatriate management requires the human resource managers to acquire and develop skills of being a custodian, good communicator, team membership, and also have the ability to develop good emergency response plan. For instance, expatriate crisis management requires international human resource managers to possess or develop capabilities of providing professional counselling especially in evacuation or hostage situations (Bonache, & Noethen, 2014). Furthermore, management of expatriates requires knowledge on legal issues, security matters, health, and all worked related problems in the foreign countries. Managing culturally diverse workforce When managing a culturally diverse workforce, the function of IHRM manager should involve developing policies for managing the different aspects of culture because the sensitivity of the issue sometimes hinder international business operations if not handled with much care. The implication is that culture is a crucial determinant of employee behaviour thus the international human resource managers should develop cultural policies that are integrative of all the values if their organisations to achieve competitive advantage at the international or global scope (Yagi, & Kleinberg, 2011). International human resource managers should also play close attention to the importance of cross-cultural communication as evident from the strong emphasis that modern businesses accord this human resource function as they believe that it is very essential in improving their performance and manoeuvring challenges. Banutu-Gomez (2014) suggests that IHRM communication functions should involve a deeper understanding of the various cultures so as prepare effective strategies for overcoming challenges like the language barrier. Therefore, the role of international human resource managers is to develop effective cross-cultural communication strategies where respect to ones culture is given priority, and there is an emphasis on using cultural tolerance language. It is also important for the international human resource managers to understand that cross-cultural negotiations involve identifying factors that influence the entire process of business negotiation (Moran, Harris, & Moran, 2011). For example, cultures of Europe and the USA presume that eye contacts show sincerity and confidence while, on the contrary; South Americans believe that eye contact shows trustworthiness during negotiation. During negotiations, cultures may differ on the concept of time during business meetings or negotiations thus time is very crucial during cross-cultural business negotiations (MacKenzie, 2013). For example, western culture value time and oblige all business partners to Respect time consciousness while Asian and Middle East regions are more relaxed about keeping time and punctuality. Recommendations It is evident from the literature search and discussion that international human resource management functions involve managing a diverse workforce in terms of culture and organisational environment. Therefore, international human resource managers must first ensure that their personality traits are requirements of management functions at the international level. In these case, it is still imperative to maintain that they must be flexible, adaptable, culturally competent in managing a diverse workforce and open-minded. On the other hand, functions of human resource management at the international level as there is more organisations, planning, controlling and directing of all activities in the organisation. Staffing is a major function that always receives much attention at the international level where the human resource managers have to select the best expertise to handle the international duties. In this case, it is highly recommendable to carry out effective management of the expatriates which involves selecting expatriates based on their technical competencies but also considering other factors like personality traits that will help them handle the international duties (Bonache, & Noethen, 2014). Bibliography Bonache, J, & Noethen, D 2014, ‘The impact of individual performance on organizational success and its implications for the management of expatriates’, The International Journal of Human Resource Management, vol. 25, no. 14, pp. 1960-1977. Kyvik, O 2013, Cultural Complexities in Cross-Border Mergers & Acquisitions, GRIN Verlag, London. MacKenzie, I 2013, Intercultural Negotiations, Routledge, London. 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