International human resource management due to globalization

Essay add: 27-11-2017, 16:28   /   Views: 19

As the globalisation trend advanced, IHRM (International Human Resource Management) plays a critical role in helping companies evaluate the human resource skills /capabilities and possibilities involved in moving to different regions of the world (Luthans, Marsnik and Luthans,1997).

The HR (Human Resource) function is to help manage the organisation's people as effective as possible based on the organisation business objectives for competitive advantage (Porter, 1990).

To be successful in the global marketplace, a need for "global mindset" is the key source for long-term competitive advantage. The current HR issues faced by P&C is illustrated in Appendix A.

The HR management in P&C HQ did not consult the local HR representative information on local culture, employment aspects, safety, customs and traditions in order to operate in harmony with a local company's procedures which is the root cause of the HR dilemma faced by P&C.

Looking at the current HR issues that P&C is facing, the complexities of operating in different countries and employing people of different nationalities are challenges arising from the internationalisation of business. Also the challenge P&C requires to undertake its HR strategies, policies, practices to global level for multinational ventures (Scullion & Linehan, 2005).

Company characteristic, business strategy and organisational structure are important elements in policy choice for the Flexibility and HRM strategies (Delery and Doty, 1996; Tsui et al., 1995; Mayne et al., 1996; Doorewaard and Meihuizen, 2000).

According to Philip Condit (Financial Times 1997), as the era move towards globalisation, it is advantageous global companies, workforce, management transform into a global enterprise.

A standardized approach to IHRM may put an organisation to disadvantage because cultural differences are ignored rather than built upon. (Adler,1991).

Competing demands of global integration and local differentiation are important elements which give rise the need to develop human resources as a source of competitive advantage (Caligiuri and Stroh,1995;Schuler et al.,1993;Taylor et al.,1996).

P&C required adopting a geocentric approach to IHRM integration to balance between the conflicting priorities of global integration and local responsiveness (Caligiuri and Stroh (1995). GLOBE research confirmed that selected cultural differences strongly influence important ways in which people think about leaders and norms.

According to Spence Hayden (1990), the most critical HRM issue for going international is to select and train local managers (see Appendix B) as people is the main source for competitive advantage in international business.

It is critical that P&C focus on the first seven points of the HRM issues listed in Appendix B to enhance its current HR issues in Germany, France and India for the business expansion. The overall twelve HRM issues are for P&C to apply for its going international plan to other Asia countries to build long term business success.

The key challenge for P&C is to capitalise on the diversity of global workforce without suppressing each other nation's desire to maintain their own cultural heritage.

Although it is tough, P&C have to build, maintain and develop its corporate identity by managing its people on a worldwide basis, local responsiveness by adapting and conforming to the norms and customs of different societies in which P&C operate (Laurent, 1986). This will enhance worldwide competitiveness, innovation combined with achievement, consistent across MNE units (Bartlett and Ghoshal, 1989).

According to Schuler and Florkowski (1994), for control purpose, flexible HRM policies and practices at the local level must be balanced with the requirement of MNE to maintain its global set of IHRM policies.

Deeper Analysis-HRM issuesa) Training and Development

As noted in P&C case, there is no formal training to consultants after recruited. Failure to train employees can affect the values, beliefs, and assumptions shared by employees to the organisational culture (Bunch, 2007, p. 157). Au and Chong (1993) conclude that failing to incorporate organisational culture in training programmes might lead to total failure in building a successful organisation.

Listed below are the ways to determine employees taining needs:

In today's highly competitive global business environment, human resources play an important role in developing and sustaining organisation competitive advantage (Brewster, 2002).

IHRM has enforced common methods of acquisition of knowledge through hiring and training, distribution of knowledge via training and development, and utilization of knowledge via performance management in an organisation.

Training Assessment is used to determine if and what type of training is necessary to acquire skills, knowledge, and improvement in order to perform well for the organisation growth and success. (see Appendix C -General Systems Model of Training and Development). Cross cultural training is also critical for international assignments, for managers to be acculturated to other societies value, norms and behaviour.

Training is also recognised as an important means for socialisation (Child, 1984; De Meyer, 1991; Derr and Oddou, 1993; Ondrack, 1985). Orientation is where new employee learns the organisational goals, corporate culture, job and to develop realistic expectations. Formal training on the other hand promotes shared values and facilitates network building between headquarters and subsidiaries.

Only successful organisation (example: Accenture) will believe/continue to train, develop their employees in order to adapt to the constant change in the dynamic working environment as new technologies develop and emergence of global assignments. (see Appendix D - Diagnostic steps in Development Programmes)

According to Bramley, 2003, extensive training, learning and development are important. Learning organisations (example: Xerox, General Electric) have applied three stages of learning perspective.

P&C needs to ensure that outstanding talent remain at the forefront of its field in terms of professional expertise and product knowledge gained through training which facilitates learning so that employees can become more effective in carrying out their task.

It is essential as people, technology, jobs, and organisations are always evolving. Technology is advancing at a staggering pace. Therefore, it is vital that employees be trained and developed to utilise the latest technology so as to attain the highest levels of productivity.

b) International Managers

As International business continues to grow intensely, P&C must understand the need for highly qualified international managers, a crucial factor in implementing global strategies for business success (Gregersen, Morrison, & Black, 1998).

Overall International managers need to have effective cross cultural communication, non-judgemental capability, flexibility, empathy (Berrell et al.2002:92).


A successful expatriate manager must have sound knowledge of technical, functional, cultural, social, and political skills (Bartlett, 1986; Bartlett & Ghoshal, 1994; Ghoshal & Barlett,1997).

The most common factors that determine the expatriates' success or failure is illustrated in Appendix E. Expatriate managers that possess an "acculturation" characteristic will be able to adapt/adopt themselves to any region for international assignment.

The key point for international transfer is to initiate, expand and control international operations to ensure various organisational units strive towards achieving organisation common goals which is linked to HQ control aspects. (Edström and Galbraith,1977). Appendix F described why transfer of international managers happen.

According to Roessel (1988), the benefits of various functions of international transfers can enhance internationalisation of the MNE, which make it more sustainable in international market.


The value of managers with unique local market knowledge can develop a dynamic capability for global assignments. In this manner, inpatriate manager is another option envisioned to build managerial talents which organisations can develop distinct competitive advantage in the market they entered.

The inpatriation process is positively related to the global HRM for organisations' development of organisational capabilities: quality, low-cost operations, speed learning, innovation and customer focus (Lawler, 1996; Urlich & Lake, 1990).

The criteria and characteristic of the right candidate for inpatriate managers are similar to the expatriate factors which illustrated in Appendix D.

Although HQ prefers the expatriate managers contribution in multicultural management on the stabilisation control aspect

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