International Human Resource Management
International Business HR: Vital and Pivotal
During the 20th century, the human resources (HR) function has become quite skilled at managing human capital which is frequently defined as the skills, knowledge and experience of individual workers within a company. Human resources management has never been more vital to organizations than it is today as more and more businesses are going global. For globalizing companies, experienced, informed and effective Human Resource people skills are becoming a strategic asset. In order to maximize the competitive potential of employees across global markets many multinational companies will need to revise their HR policies and programs.
Table of Contents
Background and Significance
Discussion and Implications
During the 20th century, the human resources (HR) function has become quite skilled at managing human capital which is frequently defined as the skills, knowledge and experience of individual workers within a company. But just as HR was gaining competencies in this arena, the new economy came along and moved the objectives. It is no longer sufficient to administer individual assets. The HR professional of the 21st century must manage inter-related assets of a company in order to be triumphant (Krebs, 2008).
Human resources management has never been more vital to organizations than it is today as more and more businesses are going global. According to the journal Economic Studies, the intense nature of the globalization process requires companies to analyze and understand the way in which management know-how should be transferred. It should also be able to provide management solutions in the HR field to avoid dysfunctions that may be encountered. The article suggests that HR departments to develop strategies based on workable models, including those that involve the company analyzing the best way to transfer know-how from the parent company to all companies that will be set up internationally (Serafinceanu, 2010).
For globalizing companies, experienced, informed and effective Human Resource people skills are becoming a strategic asset. In order to maximize the competitive potential of employees across global markets many multinational companies will need to revise their HR policies and programs. They will need to do so not from an exclusively local management view, but from a corporate-wide perspective. And finding a balance between local market, cultural HR issues, and broader strategic corporate objectives, this balance will be key to turning sometimes rigid, back-office HR departments into strategic global assets (Berger, 2012).
Global HR careers are demanding in nature, and job seekers of these positions must be well-formed people who can take a lot of pressure at work. It may entail moving, and job seekers should be willing to travel to other regions where the environment may not be favorable and the inhabitants may be unfriendly. Some of the issues that Global HR professionals face comprise searching of labor by way of outsourcing. Companies may necessitate cheap labor offered by the local population and it is the work of the global HR professional to source for this labor. Getting the right people who are competent in the job may be a big issue due to language or cultural barriers (Rioux, Bernthal & Wellins, n.d.).
In todays environment social capital is becoming vitally important when a company is entertaining the idea of going international. Human relations practices have become aspects in determining social capital (Baughn, 2011). In order to make the changeover from regional to global this article points to a joint venture in Vietnam. The authors mention that “a key practical implication” from this joint venture is that there can be a huge return on investment when: a) there is a transfer of technical and management skills from the U.S. To the foreign market; b) there are well-thought out “written objectives and plans” for the venture; c) joint venture personnel are thoroughly trained in necessary skills; d) there is a cross-cultural understanding between the venture and the parent company; and e) local personnel are making solid contributions” (Baughn, 1017).
The new advantage in global human resources is context, which is how internal and external content is interpreted, combined, made sense of, and converted to new products and services. Creating competitive context requires social capital or the aptitude to find, utilize and combine the skills, knowledge and experience of others, inside and outside of the organization. Social capital is resultant from employees professional and business networks. Human Resources used to focus only on within-employee factors. The new competitive landscape requires centering on between-employee factors, the connections that unite to create new processes, products and services.
Social capital encompasses communities of practice, knowledge exchanges, information flows, interest groups, social networks and other emergent connections between employees, suppliers, regulators, partners and customers. Social capital is what connects various forms of human capital. It is these patterns of connections that produce advantage for one group, and constraint for another. In the networked economy, the one with the best connections wins (Krebs, 2008).
Background and Significance
In order to meet the challenges that are sure to arise when going global, organizations have to think about how the HR job is not just an administrative service but is a strategic business partner. Companies should entail the human resources department in developing and putting into practice both business and people approaches. This kind of affiliation is essential if a company wants to transform potentially imprecise perceptions of HR and repeat the HR functions purpose and significance throughout its global environment. Organizations will also find out that HR can be important in making possible the development of a uniting corporate culture and finding and cultivating much needed leadership talent around the world. The process of globalizing resources, both human and otherwise, is challenging for any company. Organizations should comprehend that their global HR function can help them use their existing human talent from across numerous geographic and cultural boundaries. “International organizations need to assist and incorporate their HR function to meet the challenges they face if they want to create a truly global workforce” (Rioux, Bernthal & Wellins, n.d.).
It is likely that in any shift towards global operations, some significant changes will be required in the way the organization is structured, operates and behaves. The nature and priority of these changes will be determined by the precise make-up of the strategy adopted by the organization. The HR strategy that will enable delivery of the business strategy must be clearly defined before work can commence on any specific interventions. However, it is probable that the contribution of HR will be integral in a number of areas:
Recruitment — At its most basic level, HR may be required to staff up new territories and markets rapidly in support of organizational expansion. New alternatives may need to be sought as high quality staff become a scarce commodity in emerging markets.
At a more complex level, although significant change can be delivered through effective learning and development interventions, often the fastest way to engender a shift in the workforce is through changes to the recruitment process and policy.
Talent development — Many organizations now provide specialist courses in other countries, offering employees language and cross-cultural training, before undertaking a short sabbatical of up to a year in the relevant country. The provision of expatriate assignments for key talent also represents a good way to foster cross-regional and global linkages.
Establishing core values — Organizations, for example professional services firms; deliberately develop a strong culture and set of core values to build one firm approach. This can be a good way of overcoming the risk of parochialism, without overriding the strong contribution that local and regional variations make to the organization as a whole.
Fostering cross-border activity — HR can perform a key role in maintaining an organization-wide view of skills and capabilities, and channeling this information to support participation in regional and global teams and projects. The delivery of key conferences from different locations, and the geographical dispersion of business unit HQs and Centers of Excellence also provides a strong visible indicator of the organizations priorities and strategy.
Development — The HR teams of most global organizations now deliver a significant portion of their learning and development activities through some form of regional or global academy or university. Activities, whether involving classroom interaction or other media, provide a strong cohesive influence, and again the balance between locally, regionally and globally designed and delivered interventions is very important (Rickard, Baker & Crew, n.d.).
Talent management is far more than salaries, wages and bonuses. How companies develop people, how they promote them and how they measure performance, these functions define talent management. Different cultures interpret these functions differently. In some cultures, for example, seasoned and aged managers advance, in others clever and ambitious individuals succeed the fastest (Berger, 2012).
A general worldwide lessening of employee and company loyalty has also complicated recruitment. Difficulties adapting a strongly centralized headquarters to changing global employment patterns and retaining people are not restricted to Western companies. For instance, a leading Asian electronics company now employs more.