INDU1130 International Human Resource Management Assessment Answer
Section A: Theory and knowledge
1. According to Brewster et al (2016), International Human Resource Management (IHRM) can be approached in three ways: cross-cultural, comparative institutional, and IHRM in practice. What is IHRM, and what are these three main approaches to studying it? Illustrate your answer with references to the literature
The international human resource management tends to bear strategic as well as the functional resemblance to the management of the human resource. Functionally, IHRM performs the similar sets of the activities as performed by the management of human resources such as the training, performance appraisal, performance management, selection recruitment, development as well as the trade and industrial relations, management of career and many more. Strategically, the international HRM tends to be linked closely to business strategy of organisation (Reiche et al. 2018).
With reference to increase in the market competition backed by the globalisation in the business environment it, has become necessary as well as challenging for the business entities operating on global scaled to enhance the skills of the talents enjoyed by them in business thereby adopt effective strategies for retaining them into business so that they could provide innovative business ideas for contributing towards effective decision making.
Therefore, IHRM is helpful for the business entities in gaining competitive edge in the market as well as create niche in the competitive market. There are certain approaches associated with the IHRM helping the companies to manage talent on a global basis.
The business entities operation on ad global extent tend to be proper example of the cross culture. They used to carry out business activities; all time they used to enter in latest nation, cross-cultured is likely to happen with it. The cross cultural management considers being procedure of achievement of developed corporate goals by proper organising, planning, directing, controlling and coordinating of resources of the organisational within a cross-cultural setting.
As the management caries at different atmosphere, for the cross-cultural approach, prior to planning manager could understand vividly the similarities with differences of its culture and destination’s culture for giving the potential of overcoming disputes developed from different in cultural backgrounds. Whilst procedure of management, manager too requires learning and promoting ways of managing as per latest knowledge gained from experiences of cross-cultural management.
IHRM in practice approach
The IHRM in practices is concerned with series of interrelated matters such as performance management compensation, training and development as well staffing of the employees. The practice helps HR department of the multinational companies to manage their motivation level along with the interests of the employees working in the organisation on ad global basis. Staffing is done on global basis as multinational companies hire talents from different nations (Kinnie and Swart 2019).
Therefore, is an important elements of the IHRM in practice approach. The MNCs adopt innovative strategies for managing the performance quality through ROI method and rewards of the employees for developing their morale, satisfying their needs and retain them effectively into business. Furthermore, training and development in IHRM in practice is helpful for the companies to improve the skills of employees, maintain effective relations between them, develop cultural diversity thereby motivate them to work effectively with market changes for producing positive results.
Comparative institutional approach
The comparative institutional framework of the IHRM develops proper subject in the distinct stages of the contextual influence such as organisational, national and regional or global, HRM itself along with individual and group. Conceptualisation of the context of the strategy needs describing theoretical angle. In core of the approach is the chain of HRM, comprising of policies and strategy, perception and practices. The chain is completed with perspectives of different internal stakeholders. Usage of “obvious” surface system like the rates of unemployment, educational system quality and others is key; however, has certain limits. There exist 2 prime variants of the institutional approach. The one is derived from the institutional economics and the others is derived from the institutional theory within sociology. The neo-institutional approach focuses over cognitive and to lesser level of normative factors to the institutions whereas economical institution approach focuses over the formal regulative factors of the institutions.
2: “Globalisation and competitive market pressures means that eventually Human Resource policy and practice will converge into a single ‘best practice’ everywhere in the world.” Discuss and evaluate this claim
Some scholars argue that all sides of management containing HRM have become more similar and those who accept that every nation lingers to have its own strategy to management especially in HRM. At the national level, the discussion is focused on divergence or convergence of HRM practice while at the company level it is about localisation versus standardisation of practices. Several convergence versions are there. Studies on comparative HRM have evaluated changes in the embrace of a wide variety of specific techniques and practices throughout the countries and trying related the change patterns to competing theoretical definitions of what is taken place (Brewster et al. 2016).
Directional convergence is when change in HRM activities are compared between two nations and when the trend goes in similar direction. Every nation may begin with a distinctive proportion of firms using that specific practice in two nations may have developed larger. However, in all the cases, a higher number of companies now apply the practice, there is convergence in way. Similarly, the reverse may apply with variation in an adverse direction. Final convergence takes place when changes in the application of HRM practice in two nations occur. It means that the practices of two countries become more similar (the dissimilarities in application of practices between the nations reduce in extent with time) then convergence occurs there to some ultimate point.
It may suggest that the nation with reduced uses grow faster or it increases usage while another reduce it as long as they become nearer there can be final convergence. On the other hand, Brewster et al. (2016) commented that some people consider convergence as an international market-based problem. They make the argument applying the analogy of ‘survival of the fittest’ that the reason of technology and its growing diffusion means that everyone must accept the most effective HRM and management practice for competing.
Here, the fundamental assumption is that the prime model will be the universalist model. A regional institutional perspective is also there that opposes that although, institutional dissimilarities in labour market conditions, trade unions and legal environment can create variances in HRM, similar regulation of the RRU covers several countries that may result into reduction in the dissimilarities between the processes in which nations deal with their HRM. The EU has passed regulations for all its member countries containing employment and social legislation. A free labour market is there in the EU and some organisations now attempt to operate as if the EU was one nation. A growing European HRM model would support the concept of an inclination toward convergence, however as regional convergence instead of global convergence.
A little practical data is there on the problem of divergence versus convergence and that is the hugely the outcome of the challenges of researching the issue. Most of the studies focused on recognising whether national HRM practices are becoming more similar or apply convergence to use just to directional convergence. They found similar trends in various countries but could not found any evidence that proves that the nations are becoming more similar (Gomes et al. 2015). Brewster et al. (2016) stated that some people considered USA, Germany, Australia, Italy, Japan, UK and Sweden for arguing that no such universal kind of employment system is found.
However, several systems are breaking down to make more distinctive systems such as less controlled economies. According to them, while internationalisation and globalisation can be argued for improving a usual converging trend within the HRM system, such evaluations do not enable for managerial activity, manager can carry out various things. Consequently, they oppose that all the societies will develop a variety of work practices gradually. However, it is found that regional differences in HRM are prevailing. No evidence of final convergence is there. The countries commence from various points and grow within their own routes and at various speeds. Therefore, although the trends might be alike, the countries every stay quite different. Thus, it can be stated that non-converging and converging take place concurrently.
Section B: Functions and practice
3. How can Human Resource Management (HRM) be ‘strategic’ in meeting the challenges of contemporary global business? In structuring your answer consider the ‘best practice’, ‘best fit’ and the ‘resource based view’ approaches to Strategic HRM, and the strengths and weaknesses of each. Explain your answer with reference to the literature
Employees are regarded as most important and performing assets of organisation that needs to be effectively managed by HR department of organisations for ensuring smooth functioning of business. HRM especially on international extent undergoes severe challenges such as adherence to laws, developing changes in management, establishing defective leadership, provision of effective workforce training, adapting with innovation, workplace, diversity, retaining productive employees, ensuring effective compensation to the workforce and others. Therefore certain approaches associated with strategies HRM are helpful for the organisations manage HR practices effectively in business thereby ensure sustainable growth.
Best practice approach
This particular approach associated with strategic HRM states that some bundles of the Hr activities occur that specially provide support to the companies in achieving competitive edge independent over the organisational environment or the industry. The approach of best practice include effective relations amidst the HR practices along with the organisational performance thereby are allied habitually with strong commitment management.
The HR policies are exclusively proper for exploitation of the performance independent of the market and the product strategies. The best practice comprises of the activities that are featured as the HR activities that are mutually compatible being counterfeiting high level of the workforce skills, develop motivation thereby introduce effective work design improving employee commitment. Considering the concepts from the expectancy theory developed by Vroom, best practice in HR shall lead to high level of productivity, quality, low wastage and absenteeism rates.
Strengths and weakness:
It is helpful in increasing the productivity and engagement of the employees at the workplace. Increase in the motivation and performance of quality of the employees result in reduction of total costs and development of profitable gains in business. Systems of high commitment control usually are complicated in nature and needs large inputs of planning with commitment of top management. It lacks direct integration with the strategies of organisation
Best fit approach
This approach is gauged as change from the standards models of Michigan, Harvard and York and therefore is named as the Matching Model for HRM. It helps the companies to develop their HRM strategy in line with the business strategy (Iqbal 2019). The strategy consist of developing future course of action, policies and performance objectives towards achievement of strategies aims. HRM strategy shall be developed and used maintain given strategy of business. It explores the universality presumption of best-practice perception.
Strengths and Weaknesses
It is helpful for the HRM department of business enterprises to place right individual at the right job for ensuring effective development in employees’ productivity and organisational profits. The best fit approach helps organisation to align their HR strategies with organisational strategies for improving the operational process In changing business setting, organisations and strategies need developing different contingencies that might be challenging to adjust with HR practices. As organisations move to corporate life-cycle, the HR practices needs alignment that results in alternative employees’ treatment that could create negative impact over workplace culture.
Resourced based view
This specified approach of strategic management of the human resource demonstrates paradigm shift within the SHRM behaviour through emphasising towards internal resources of company, instead of evaluating the performance in forms of external context. The approach is helpful for the HR department of the organisations in interpreting the situations under which the human resources are regarded as scarce, worthy, complex in imitating and organisational specific resource or key strategic assets.
Strengths and weakness:
This approach is helpful in achievement of the resource capability. It is beneficial for the businesses entities in enhancing the productivity of its employees thereby gain maximum profits in business. Ineffective management of the approaches is likely to result in the manipulation of the strategic resources in business that might negative affect the companies’ financial performance. The core logic of the approach comprises with circular reasoning within specification of relationship amongst resources and rents
4. What is the ‘performance management process’? How does national culture and institutions shape performance management policy and practice in different countries? Illustrate your answer with examples from the literature.
Performance management is the procedure of supporting the staffs employed within the organization related to their work, recognize the need for professional development and confirm accountability of the job roles performed by them. Performance management procedure has the purpose to confirm the consistent and fair treatment for every staff. The managers within the organization are provided with the guidance and framework that allows them to clearly communicate related to work standards expected and confirm the services or product quality are fulfilled.
The performance management procedure involves the recognition and implementation of the mechanism that allows staffs to accomplish the demanded performance standards from the management. Additionally, the performance review, supervision, scheduled examination, outlining action plan with closely relative towards the work role and results needed within the organizational objective are also the procedure of performance management. The traditional performance management procedure within the organization was accomplished through monitoring financial outcome or performance.
Conversely, the national institutions and culture have played an important role in shaping the performance administration procedure. With different forms of work rising, specifically with the globalization, development within ICT technologies experienced with foreign multinational functioning with various cultural setting and networks of small corporate collaborating within the international networks (Jwijati 2017).
National culture is defined as the collective programming of the human mind that differentiates the individual of one group to the other. National culture refers to the group of behaviour, customs, beliefs, norms and shared values by the population of the nation. The consideration of the culture within the global context encouraging diversity, teamwork and globalization have played a major role within the organization. The organization require recognizing the emerging cultural challenges with improving practices to fulfil the international flexibility, competitiveness and learning ability of the workforce to sustain the balance of building cultural sensitivity along with performance management capability.
Jwijati (2017) opined that the cultural dimension of performance administration based on belief and attitude of the management is affected by low uncertainty-avoidance, power distance and high individualism that result within adverse influence over performance management. In a different nation, cultural constraints can become a limitation for the effective establishment of performance management. In such a situation, the establishment of the culture of collaboration, the belief of togetherness and supportive superiors are critical for facilitating smooth and creating potential procedure of performance management. The performance management practices and policies in context to different national culture varies in reference to the illustration of the following examples-
Italian culture: The two organizations may have two varying culture with the first corporate having incubator culture deliberately constructed performance management system by middle administration, balanced measures are undertaken to manage strategy, communication, behaviour and learning. The second organization fosters a family culture with a performance management policy designed by superior administration emphasizing on the financial measure. The instance of resistance within the establishment of the performance management may be encountered for legitimization and monitoring.
Chinese culture: The organizations in the Chinese nation have the family culture for performance practices and policies defined by superior administration with some input from the middle-level managers (Jwijati 2017). The performance management process is formal include formal meetings for discussing the outcome. It is used mainly for managing strategies, communication, impacting behaviour, monitoring and not for development as well as learning.
UK culture: The organizations in the UK either promote people culture or culture of the guided-missile having a huge task emphasis. In the organization of people culture, the performance management practice relates to a well-improved group of measures used for every purpose expect legitimization. The performance management is emphasized in improvement and learning of the workforce for increased productivity (Jwijati 2017). Conversely, other organizations promote task culture having poorly developed measured with informally used for communicated, monitoring, impacting behaviour purpose. Improvement and learning are restricted.
It is recognized that national culture influences the performance management practices and policies.
5. What educational and training factors should a Multinational Corporation (MNC) consider when planning to establish subsidiaries in new countries? In structuring your answer, consider how schooling, higher education, and vocational training systems vary between countries, and what impact this may have on staff development planning by MNCs. Illustrate your answer with examples from the literature.
The multinational companies at the time of establishing their subsidiary within the new nation require investing in human capital development for quality performance, high productivity and adequate business growth with economic development. The effective training and education factors offer MNCs with the distinctive and differentiated position towards developing the quality and standard of services to consumers, resulting within the continuous innovation, improved profitability and productivity.
The different emerging nation, for example, the Asian market has offered MNCs with economic to enhance their international business operation, however strategic human resource development programs by the multinational organization to develop and train staffs have remained ineffective. Khanna (2020) argued that irrespective of the developing marketplace of large pollution, MNCs encounter hardship recruiting executives, managers and other skilled staffs due to quality of knowledge or talent remain difficult to ascertain.
In Asia countries, the vocational training, higher education and schooling of the individual is emphasized than the workforce belonging from Europe or the American nation. The MNCs are more likely to have less skilled staffs in the emerging nation like Asia, where talented, skilled workforce with more investment needed of workforce development and training. On the other hand, the MNC is likely to gain a skilled workforce within the Western or European nation with less need for training or employee development aspect. The multination organization investing largely within the physical capital within the new nation need investing simultaneously within human capital to improve the global workforce capability.
The business schools, training institutions and engineering college have proliferated, however, apart from the elite few, it is impossible for the organization to recognize schools producing the skilled managers. For example, the MNCs within the Indian nation has sprung-up training the people for jobs within call-centre businesses, although no corporate outlined the quality of training provided to the staffs. In reference to staff development planning, the vocational training is highly promoted within the developing nation like Brazil, Russia, China or others.
With the FDI or Foreign Direct Investment largely eased within the emerging nation, the MNCs are more likely to have a skilled workforce with vocational training largely offering the long-term advantage of developed mobility, flexibility, lifelong learning and job satisfaction. The multinational companies seeking to implement subsidiary within the new nation require understanding the workforce trends, training and education level of the residence.
In the process of staff improvement planning to have a skilled workforce in multinational organization's subsidiary within the new nation in a highly profitable manner the method coaching, lecture, job rotation and role play become critical. Job rotation helps in better recognition of trainee’s weaknesses and advantages, by knowing it the MNCs can place the right individual within the right place, develop the ability and expect them to offer more productivity in return.
Coaching as training and educational factors would help organization operating subsidiary within the new nation to help the trainee learn from the trainers and apply the similar within respective work. It creates significant influence within solving individual or personal issues. It would be critical that organization aiming to operate on international level emphasise on global training or staff improvement plan that increase staff’s global working skills, performance, ability including better negotiation and communication knowledge. For example, McDonald as an American organization largely outsourcing the supply chain operation as a subsidiary in Russia has comprehensively adapted the business model to the nation's factor market (Khanna 2020).
The MNC has brought within nearly 50 expert managers to train Russian staffs related to quality measurement, operation process and service standards. The MNCs planning to implement subsidiary within new nation need to have assessed clear competitive benefits related to market knowledge, training needs of labour available, schooling, education level, product portfolio, reliable partners and others. The organization need to obtain employees with experience within the foreign marketplace.
6. What is ‘employee relations’? Why should Human Resource departments of Multinational Corporations (MNCs) care about ‘employee relations’ within subsidiaries operating in other countries? Your answer should draw on specific examples and references to the literature
International Human Resource Management is concerned with series of key interrelated activities that used to target the HRM at international extent. It fosters towards fulfilment of the organisation objectives thereby achievement of a competitive edge in the market over the competitors at international together with the national level. It includes necessary functions like performance management, selection, recruitment, workforce training appraisal and others. Employee relations are concerned with efforts made by an organisation in managing relations amongst employees and employers. Companies having sound employee relation program offers consistent and fair treatment to the employees universally. It helps the employees to be committed towards their job thereby be loyal to the organisation. Such programs are aimed at preventing and resolving the problems develop from situations in work. The employee relation program basically form part of HR strategy developed for ensuring most effective usage of the people for accomplishment of mission of the organisation (Heffernan et al. 2016). HR strategies consider being deliberate plans used by the companies for helping them active and preserve competitive advantage in marketplace globally.
Employee relations put much emphasis over issues influencing employees like the pay, benefits, supporting work balanced along with secured working conditions. Employee relations help the employee to avoid disputes (Delery and Roumpi 2017). Employee relations are helpful for the staff to be actively engaged in their job and there be focussed towards producing excellent performance results to the company that successfully leads to job satisfaction amongst employees, development in employment productivity, long term retention of the employees helping companies in manage business operations harmoniously. It encourages companies in enhancing total revenue of the business.
The convergence towards the best-practice could results in adoption of the ‘global best practice’ ER systems at the MNCs. In case if the nation-of-origin is dominant in the best practice effects, there could be complicated portrays in the national institutional approaches in the foreign owned subsidiaries. Most importantly, the ER practices from the home nation of the Multi National company is also going to affect the best practices.
Diversity in such a scenario also has a significant influence over adoption along with evolution of the ER practices within the foreign-owned subsidiaries. For competing in the tough market situations, the MNCs usually undergo strong challenges and pressure for adoption of the systems of global best practice, despite the national institutional issues, which hamper reform of the ER systems. The industry along with organisational cultures could create key influence over ER practices of both kinds adopted with development of the ER systems within foreign-owned subsidiaries. The diversity within the industry and the organisational; culture vividly are key for explanation of multiple company’s and the industry differences within employee relations (ER practices).
For example, the people principles of the Marks and Spencer underpin their vision to be a liable employer thereby develops minimal standards with regard to the recruitment, employee relations, reward, and employment engagement along with the ways of communication amongst employees regarding their viewpoints. It apply around all its operations for direct employs along with the Joint Venture partnership. Same standards are also at place in their franchised operations. Additionally, another example of the strong ER systems or policies is Morrisons. Providing immense support of all its colleagues, the organisation provides effective training and education to its managers for keeping pace with the newest legislation associated with the employment thereby develop as well as monitor its HR policies procedures and the handbooks.
It could be concluded that the different approaches associated with the IHRM such as comparative institutional IHRM in practice and cross-cultural is helpful for the HR department of the multinational organisations in effective management of the motivation and performance quality of the employees on global context. In addition, the different approaches associated with the strategic HRM are most key approaches every multination organisation should undertake in order to ensure proper of satisfaction of job amongst the employees thereby help them to produce effective performance results to the business. Employee relations play a crucial role in managing IHRM.