International Staffing - BlueScope Steel - Case Study Example

International Staffing Student’s Name Course Professor Date Executive Summary Most of multinational corporations have launched operations in various countries with the advances of globalization and the need to leverage the benefits that various markets offer. However, the effectiveness of such subsidiaries depends on the firm’s organizational structure and staffing. Communication and coordination are the most significant aspects of any organization and having the right manager in place promote efficient operation and productivity. BlueScope Steel decision to launch its operations in India will open up opportunities in new geographical markets. However, despite having international status, successful operations and productivity will highly be determined by right staffing. The technique adopted to select either an Australian or local Indian manager to lead the subsidiary will be determined by comparison of the benefits and difficulties expected from each options. Introduction BlueScope Steel is an Australian multinational corporation with significant expansion in various counties like Asia, NZ, N. America and Pacific Islands. Faced with the staffing need for a managerial position in a new Indian subsidiary, this report attempts to advice the firm’s executive to settle on the right decision to promote the best of its near-term and long-term operations. The report will highlight the benefits and difficulties for each option: having an Australian manager or a local Indian. Secondly, it will consider the key elements that BlueScope should consider in its international staffing decision. It will finally put up some recommendations in respect to the issue with explanations. The report concludes that BlueScope need to consider the impact of pay packages, promotion of feasible operation and culture and government policies on staffing in India as core factors to reach the right decision on staffing. Benefits Australian National The desire to maintain good communication, tighter control, and coordination and develop a unified corporate culture that is linked with corporate headquarter can easily be reached with an Australian manager. According to Howe-Walsh & Schyns (2010), ethnocentric approach is considered when staffing key positions in the MNC due to the need for maintaining and facilitating organizational coordination and control. There are various assumptions that promote MNCs’ to believe that managers that are capable in their home country will also function well when working in another country. First, there is an assumption that a universal approach to management exist though there is evidence from various research to the contrary (Howe-Walsh & Schyns 2010). Under this assumption, BlueScope may consider transferring its Australian-based work practices into the Indian subsidiary. To some extent, there is some evidence to settle for an Australian manager. Convergence-divergence debate concludes that, work practices have converged to a certain extent. Such convergence result from the current transfer of technology, ‘best practice’ and the global spread of uniform management education programs reflecting dominant Western approaches to management. The need to transfer BlueScope’s core competencies to the Indian subsidiary more expeditiously will be achieved with an Australian manager. According to Ennen & Richter (2010), an MNC should highlight its requirements and particularly the nature of job and the amount of knowledge transfer from the HQ to the subsidiary. BlueScope Steel operations revolve around technical expertise that an Australian manager who have worked with the company inherently have. Such competencies will be of great use in foreign operation. Experienced Australian manager will competently train Indian locals on different areas of steel manufacturing, address quality and realign locals to the overarching firm’s culture. Considering an Australian manager for the position will give international experience to promising managers in BlueScope. High potential managers are constantly ready for transfer from one country to the other. Those managers who consistently show qualities like adaptability, motivation, entrepreneurship and intelligence can easily be successful in a firm’s subsidiary (Popovski, Popovska, & Jovcheska (2014). According to Tham (2011), the assumption that people can adapt and acquire multicultural behaviors will also support the approach for BlueScope to consider getting a qualified senior management talent from Australia. An Australian manager will help BlueScope to be assured that the Indian subsidiary will comply with its objectives. The perception of the market from an Indian manager’s view may limit the way BlueScope intends to leverage the market. However, an Australian manager with a mine of experience can perform better. As Crawford & Nahmias (2010) observes, diverse teams are creative and such a manager will promote wide range perspectives, variety of potential solutions and synergy. Difficulties The adaptation of an Australian manager to new environment, particularly the cultural environment in India will take time. Australian manager might be affected and end up losing self esteem, confidence, and prestige among the subordinates employees and reduced motivation. From Kluckhohn & Strodtbeck cultural orientation framework, culturally different personalities differ in various areas where relationships and in other significant parameters that stands out in this evaluation. Relationships will be an important aspect in BlueScope functions and the orientation of the manager must match to a greater extent to that of the subordinates. An Indian manager will exhibit collective orientation while Australian will exhibit individualistic. An Australian manager considers mastery and control of the world around than work in harmony more important. For an average Indian, mastery and harmony are about the same. An Australian manager will be against hierarchy while and Indian is neutral. The manager might also makepoor decisions during the time and makes it hard to correct them in future. It is always time consuming and expensive to implement due to relocation and training expenses. Obviously, such difficulties will reflect as indirect cost that will in turn affect the organization. BlueScope may risk losing market share in India depending on how they will initiate their operations. Difficulties in dealing with the Indian government officials will be another challenge. Having an Australian manager will limit the promotion opportunities in Indian subsidiary. In turn, there is higher likelihood of reduced productivity or increased turnover to a group with expectation of rising to such a position (Zheng & Lamond, 2010). Other difficulties that arise once employees find it impossible to progress includes participation problems, conflicts and multiple ideas that make it hard to settle for faster decisions. Income packages of an Australian expatriate will obviously be higher than that of a local manager. Income package may rise fourfold due to airfare, training, relocation expenses and salary costs. The problem with remuneration package is also compound by the fact that management staff may have to work for indefinite length of time and high-level deliverables requirements might push them to exorbitant incomes (Tarique & Schuler 2010). Indian Manager According to Lee & Sukoco (2010), polycentric approach highly considers taking into considerations the local factors and considering them critical in determining the firm’s success in operations. In turn, a local Indian manager will eliminate language barriers making it easy for the manager to consult internally and with other external parties that affect the operations of Indian subsidiary with ease. An Indian will navigate the managerial scene due to the ease of mapping and understanding the differences in culture, personality, gender and function. In addition, having a local manager will avoid adjustment problems that face the expatriates, their families and eliminate the need for cultural awareness training. In most cases, reasons for possible failure of an Australian manager can arise from partner dissatisfaction, family concerns, their ability to adapt and quality of life. Having a local manager will be less expensive in terms of remuneration packages. A local manager will only require a basic salary and other allowances reducing the recurring remuneration costs. It will give continuity to management of the subsidiary and help to reduce turnover. An Indian senior manager will collaborate well with the subordinates. The right working environment will easily emerge due to the ability to interact and influence each other, mutually accountability, common objectives and working as a social entity (Stahl 2012). Difficulties The gap between Australian headquarters and the Indian subsidiary will increase. In turn, there will be difficulties in trying to manage the subsidiary. BlueScope will also limit the career opportunities for their managers and benefit from a rich experience developed in their staffs who have worked with it over the years. Key Elements in international staffing decision Expatriate selection can be challenging with main issue being failure of the expatriate. In turn, BlueScope may incur direct and indirect costs to the organization. There are a number of factors that most MNC considers to reach a decision for international staffing and applicable in BlueScope’s decision: General staffing policy more so on key positions like managerial roles in its headquarters and such a subsidiary is an important factor to consider. BlueScope staffing policy may focus on best people for key jobs regardless of nationality; they can then get competent employees not only in Australia but also in India. International experience should be a condition for success in the managerial position regardless of whether the company will settle for an Australian or an Indian manager (Crossman & Clarke 2010). That way, an Australian manager will cope easily with Indian environment while an Indian manager will efficiently work with the seniors from BlueScope HQ. BlueScope need to consider its future need to develop an international executive team. As it is now, BlueScope has operations in Asia, NZ, N. America and Pacific Islands. So far increased global expansion will increase the remuneration costs if in each country they are represented by Australian managers. BlueScope must have known the main challenges that arise with each staffing option. BlueScope’s must consider its ability to attract a right candidate. The firm need to have a selection criteria in place to help reach for the right staff. Usually, the most appropriate candidate must exhibit cross cultural suitability, technical ability, India cultural requirements and other aspects like language and family requirements. With the use of selection tests such as personality and psychological tests, it is possible to get the right manager for the subsidiary (Reiche & Harzing 2011). There are broader external influence like the constraints placed by Indian government on hiring policies which is another important factor to consider and will highly affect the staffing decision. Host government pressurizes most multinational corporations to employ a higher number of host Country nationals. India is amongst the emerging economies countries where the government encourages foreign direct investment. In most cases, the government expects the company to have its managers for certain duration of time after which they promote local skills and management and leave the positions to local managers who later help in trickling skills down to the firm. Recommendations BlueScope would better deal with the difficulties resulting from having a local Indian manager compared to those from an Australian one. From the above evaluation, there are a number of factors that make staffing in such a subsidiary a complex undertaking. First, an Australian manager will have to deploy more HR activities that do not necessarily apply in their domestic market. Secondly, a manager must have a broader perspective to face some different problems among the Indian nationals. Thirdly, the manager will be expected to change to align with varying values, the needs of locals and contribution to their personal lives. Fourthly, the company must guard against the risks of human and financial consequences that might result from such a failure. Lastly, considering the broader external influences, the policies and procedures applicable in India will affect various levels of its staffing. In turn, it will not be possible to have other critical managerial functions headed by Australians. Having a singer manager might hinder the extent to which BlueScope culture will be adopted in this new subsidiary (Du Plessis, 2010). BlueScope need to carry preliminary research and have explicit sum up factors that determine the right staffing and efficient operation in Indian market. The company should consult other similar foreign companies operating in India to understand how employment aspects, customs, traditions and local culture work in harmony with each option of staffing. Learning from experienced companies in the market help to gain practical information to guide in concrete decision. According to Abdullah, Boyle & Joham (2013), employees expect to have a better working environment even when working with MNC’s subsidiaries. Work environment revolves around the interaction between the managers and employees. Consequently, employees who will perceive strong culture in BlueScope’s subsidiary will tend to reveal a strong sense of belonging. BlueScope must consider the implication and significance of having a local Indian for the managerial position. As Monis & Sreedhara (2011) observes, most employees working for MNC consider the long-term career options, the importance the organization show to career development and promote workers to higher positions. Having a dynamic career path will help to retain outstanding and highly performing employees. When considering their self-advancement goals, they will also help the company to achieve its objectives in India. Lastly, BlueScope preference for a local Indian may result from the direct and indirect costs involved with expatriates. Unless it is a short-term position for an Australian manager with a primary reason, it may mean that the company will have to meet very high costs to sustain such a manager for long. The issue can be compounded if the assigned Australian manager had no prior international experience. Conclusion There are many aspects of managing that differ from the domestic market and subsidiary. There are wider issues that a manager needs to be aware of to function efficiently and effectively. Most aspects considered by companies includes the culture of the locals, the policy and laws of the country on staffing, pay expectations and other conditions of work for a local and an expatriate staff. 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