Term Paper on "Global Human Resources Management"

Term Paper 6 pages (1765 words) Sources: 6

[EXCERPT] . . . .

Global Human Resources Management

More and more companies are competing in an increasingly globalized marketplace, and these multinationals are confronted with some challenges that must be overcome in order to achieve a competitive advantage. To provide some insights concerning how this can be accomplished, this paper provides a review of the relevant literature to identify the factors that most strongly influence HRM in international markets, how differences among countries affect HR planning at organizations with international operations, how companies select and train human resources in a global labor market and the challenges that are related to compensating employees from other countries. A discussion concerning how employers prepare managers for international assignments and for their return home is followed by a summary of the research and important findings in the conclusion.

Review and Discussion

Factors that most strongly influence HRM in international markets

There has been an increasing amount of attention paid to effective human resource management (HRM) practices in international markets in recent years due in large part to what Clark, Grant and Heijtjes (1999) describe as "the intensification of competition in national and international markets, to the advent of supranational organizations such as the European Union, and to an unprecedented level of corporate restructuring" (p. 6). Some of the more salient factors identified in the relevant literature that influence HRM in international markets include the need for multinational organizations to become and remain nimble in response to changes in an increasingly competitive and globalized marketplace, to take important cross-cultural factors into account in their HRM practices and to evaluate the so-called "psychic distance" that is involved between different countries. For example, Brewster, Mayrhofer and Morley (2000) report that, "Against the background of turbulent and competitive international markets it is more and more important that the workforce be able to change along with product or production method changes by redeploying between activities and tasks" (p. 58). A concomitant outcome of these factors is the enhanced ability of organizations to recruit talented and qualified candidates (Brewster et al., 2000). This means that as organizations improve the pool of skills possessed by their employees, there will be a corresponding increase in their flexibility which can reduce the overall costs of labor while improving organizational efficiency and productivity (Brewster et al., 2000). In addition, as the process continues, the need for supervisory personnel will be diminished which can also provide reductions in labor costs (Brewster et al., 2000). There are also some desirable outcomes for employees as well. According to Brewster and his associates, "On the employees' side there is the presumption that flexibility gives rise to an increase in the humanization of work, greater security of employment, and more interesting and varied work" (2000, p. 58). Because of the high costs involved and their unique situation, each company must determine the types of jobs that are most amenable to such initiatives and resources allocated to these areas (Brewster et al., 2000).

Beyond the foregoing, there are some powerful cross-cultural factors involved in HRM practice in international markets that must be considered (Murphy, Gordon & Anderson, 2004). As these authorities point out, "Many managers are still trying to motivate employees at the national level instead of focusing on the regional, local and individual levels to explore other constructs like cross-cultural differences in values because of their subsequent impact on attitudes and behavior" (Murphy et al., 2004, p. 22). Likewise, Yang (2007) emphasizes that, "At the firm level, human resource management plays a strategically important role in international staffing and in developing culturally appropriate polices and assistant programs to support and sustain international business operations" (p. 2).

Finally, the psychic distance that differentiates countries represents an important consideration in HRM practices. According to Pitelis and Sugden, "Psychic distance is defined as factors preventing or disturbing the flows of information between firms and market. Examples of such factors are differences in language, culture, political systems, level of education, level of industrial development, etc." (1999, p. 153). The degree of psychic distance that is involved will therefore influence HRM in international markets. In this regard, Pitelis and Sugden point out that, "Firms tend to prefer to move first into markets with lower psychic distance relative to their home market; they tend to move into psychically distant markets only later in the internationalization process" (1999, p. 153).

How differences among countries affect HR planning at organizations with international operations.

Perhaps the most well-known researcher who has investigated how cultural differences among countries influence human resource practices is Geert Hofstede, whose five cultural dimensions clearly demonstrate how these cross-cultural dimensions affect HR planning for organizations with international operations (Carraher, 2003). Although Hofstede's methodology and findings are not without their detractors, there is widespread agreement that these five cultural dimensions can provide valuable insights for HR planning purposes. According to Couto and Veira, "Altogether, these indicators seem suitable to classify and distinguish national cultures" (2004, p. 19). Therefore, by taking such cross-cultural differences into account during the planning stages for expatriate deployment, preparatory training can be specifically tailored to manager and organizational needs.

How companies select and train human resources in a global labor market

The appropriate selection and training of managers for overseas assignments represents the first step in successful deployments, but it is also the most challenging. For instance, according to Harrison (1999), "One of the greatest challenges facing multinational corporations is developing expatriate managers who can function successfully within other cultures" (p. 18). The selection and training process should consider factors such as whether the expatriate candidate possesses the requisite language skills, if applicable. There are some mixed findings in the research concerning this requirement. For example, Andreason notes that, "A lack of language skills has long been recognized as a major barrier to effective cross-cultural communication, yet many multinationals place language fluency relatively low on the list of desirable attributes for selection" (2008, p. 382). The research to date, though, does indicate that being fluent in the language of the host country is an important consideration in the success of expatriate managers during their overseas assignments (Andreason, 2008).

Challenges related to compensating employees from other countries

One mistake that many human resource managers can make is attempting to apply a "one-size-fits-all" approach to the development of compensation packages for employees in different countries where individual values may place a higher regard on other factors (Brewster et al., 2000). According to these authorities, compensation practices will invariably differ according to the host country and the organizations that are involved, making the need to tailor compensation packages that take these differences into account an essential element in formulating and sustaining effective HRM practices (Brewster et al., 2000). Notwithstanding these fundamental differences between cultures, there remains a need to link compensation levels with performance. In this regard, White and Druker (2000) note that, "Even at the beginning of the 1990s, organisations (especially MNCs, but also large domestic organisations) around the world could be seen to be converging managerial attention around the need to improve the link between pay and performance" (p. 196). Beyond this commonality, though, exists a wide range of culture-specific factors that must be taken into account in formulating compensation practices in foreign countries. As White and Druker point out, "Research on cultural value orientations, distributional justice and pay differentials suggests that MNCs attempting to harmonize rewards systems will face predictable patterns of resistance across different countries" (p. 210).

How employers prepare managers for international assignments and for their return home

It just makes good business sense to adequately prepare managers for international assignments (Andreason, 2008). While every organization's needs are unique in this area, besides country-specific information, some of the other major areas that should be covered during the pre-deployment phase include the following:

1. How to recognizing opportunities and risks within and across national and functional boundaries;

2. How to coordinating activities and linking capabilities within and across national and functional boundaries;

3. How to manage tradeoffs between competing interests and using discretion in choosing when to be locally responsive and when to emphasize global integration;

4. How to manage worldwide information-sharing by collaborating with partners globally and transferring acquired knowledge throughout the network of worldwide operations;

5. How to facilitate organizational learning so that the organization can enhance its capability to respond and adapt to global change and uncertainty;

6. How to build effective teams across related business lines, as well as across national and functional lines; and,

7. How to effectively work with people of other cultures as equals, with no privileged areas for a home nationality (Harrison, 1999, p. 18).

Following their return from overseas assignments, expatriate managers should be debriefed concerning their experiences to develop lessons learned that can be shared with other managers as part of the pre-deployment training (Andreason, 2008). In addition, the debriefing can help determine whether the expatriate managers had accurate expectations concerning their expatriate experiences so future training can be fine tuned (Andreason, 2008).

Conclusion

The research showed that a growing number of… READ MORE

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