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Globalization has affected and caused changes in multinational companies strategies (MNEs) and other large corporations operating in different countries. Globalization is described as a continuous process through the integration, global communication, and trade network of regional economies, societies, and cultures. While developed nations internationalization has been long pursued by multinational companies (MNCs), in the past 25 years, companies from developing countries have also become global giants. They add value to the productive and efficient use of earths resources, boost power and economic prosperity, have a beneficial impact on the economy of developed countries and those of developing countries. Today, MNCs live in a dynamic and uncertain context, which calls on them to focus on intercontinental human resources management (IHRM) and international professional development. IHRM is interested in problems with HRM that go beyond national borders or outside the home countries headquarter.
Understanding countries contextual variation is essential to work in international organizations. Managers entrusted with the human resources recruit, motivate, and encourage reliable, target-oriented workers; each nation does have its semantic variances, ethnic disputes, and institutional dissimilarities. Specifically, IHRM has three distinct components: cross-cultural management, comparative HRM, and international HRM, with the successful human resource managers integrating them to guarantee that they realize their short-term and long-term aims.
Cross-Cultural Management
As the inventory of background data heightens, identity awareness also increases at intercultural and cross-social meetings. Adler and Ghadar (1990, p. 12) claim that culture plays a crucial role in determining a companys successful entry into new countries. These meetings can help entrepreneurs quickly notice and act accordingly on traditional alterations (Chaudhuri and Perepu, 2019, p. 5). In addition, the globalization world of the 20th century has two crucial pillars for the survival of an economy: multiethnic and international companies. The knowledge of other indigenous backgrounds gives people a competitive edge over domestic borders. Based on the artifact level of the Schein framework, cross-culture affects whether a multinational firm succeeds (Schein, 1990, p. 31). Although such companies risk failing because of the conflicting languages, successful corporates consider employing persons that understand the various universal languages such as Swahili, French, and English to ensure that the entrusted stakeholders interact well.
Implementing a geocentric staffing method will ensure that the syndicate takes advantage of a globally integrated business approach to ensure that they develop new culture would counter the specific cultural variables. Additionally, applying the universal business strategy will make it easier for the entrusted stakeholders to address the underlying conflicting beliefs that might undermine the productivity of the entrusted key workers (Schein, 1990, p. 31). Notably, successful firms consider applying the Change Tracking Survey (CTS) to determine how wage earners perceive the specific organizational changes that might have a direct or indirect influence on its success (Kirsch, Chelliah, and Parry, 2012, p. 171). Thus, knowledge about the heritage also helps make international business more trustworthy and offers user experience.
Comparative HRM
Different countries have conflicting traditional beliefs and political standpoints, making it difficult for transnational corporations to uphold diversity and recommend business initiatives that value them. HR managers should also choose the right personnel policy approach according to the objectives of the company (Brewster et al., 2016, p. 31). Usually, foreign expatriate staff fill the higher positions with expatriate staff in the mother country. With the policies guiding businesses in the United States, Non-native American workers need to apply for work visas before the human resource manager therein considers employing them. Thus, the recruitment approach for Standard Chartered employees varies in Europe and the United States.
The ethnocentric strategys main justification is that the parent nations team would balance its aspirations and be well connected to the parent company. In this procedure, the recruitment process consists of four stages: self-selection, creation of a candidates pool, assessment of technical skills, and decision making. The worker database is formulated for international activities in the next phase based on its member of staff requirements. Finally, with their consent, the ideal person will be identified and sent abroad. The ethnocentric model promotes people in a companys home country and overseas in critical positions.
Alternatively, some global syndicates might consider a polycentric employment model to ensure that they acknowledge the diversity of the people residing in the various international countries. When a firm buys the strategy of restricting recruitment to host country nationals (local citizens), the approach is called polycentric. The companies adopting this method typically have an HR department located in the region that controls its human resources. This style is mainly adopted by many global firms operating in developed countries such as UK and Japan to recruit managers. Additionally, Al Ariss and Sidani (2016, p. 356) add that the diversity of the HR activities is influenced in varying degrees by the authorities expectations according to the institutional model lens. Brewster et al. (2016, p. 39) argue that legislation and regulations implemented by these prerogatives will force an entity to pursue its HR practices depending on the country they are located. This way they will fit well in their regions and serve the employees rightfully.
International HRM
Two somewhat contradictory strategic objectives must be achieved by global human resources managers. First, it needs to incorporate policies and practices on human resources through a range of subsidiaries in several countries to achieve overall corporate goals. The effective operation of worldwide employees is a key factor in international companies success or failure (Rosenzweig and Nohria, 1994, p. 234). Specifically, HR management takes into account when and where eviction takes place in international business. Expatriate personnel in foreign operations are often delegated to crucial posts. The payment issue also needs to be decided by human resources managers. Differences in pay levels have a significant impact on stakeholders success, export ownership, and corporate performance (Hofstede, 1980, p. 45). For instance, the workers working for HSBC in Europe receive higher pay than their counterparts in the United States because of the mandatory value-added tax for businesses in the European countries.
IHRM aims to ensure the multinational companys global success (MNE) (Schuler, and Tarique, 2007, p. 718). HR managers must also tackle the repatriation problem that might undermine their efforts. Repatriation occurs when the worker must return to the country and typically continue to work for the company (Mikhaeil and Marescaux, 2020, p. 3). These concerns have essential effects on the prospects, performance, and HR departments usefulness in hiring for ex-pat residents and local workers. An international company has subsidiaries outside its home country that rely on the parent companys business expertise or production capabilities (Brewster et al., 2016, p. 40). Thus, an MNC is considered but managed by the head office in a country to have a number of companies in different countries.
In conclusion, when a company has an adequate pool of workers, it gains a competitive edge. Furthermore, with the globalization ideology, many companies operate across national borders, calling for the need for global workman management. The achievement of international companies depends mainly on the efficient management of large staff bodies. This uncertainty has become a challenge for global organizations to acquire, develop and retain workforces. Thus, successful multinational firms consider the three components of IHRM: comparative HRM, International IHRM, and multiethnic management.
Reference List
Adler, N. J. and Ghadar, F. (1990) Strategic human resource management: a global perspective, in Pieper, R. (ed.) Human resource management: an international comparison. Berlin: Waiter de Gruter, pp. 235-260
Al Ariss, A. and Sidani, Y. (2016) Comparative international human resource management: future research directions, Human Resource Management Review, 26(4), pp. 352-358.
Brewster, C. et al. (2016) International human resource management. Kogan Page Publishers.
Chaudhuri, R. and Perepu, I. (2019) Hilton hotels: HR practices, IBS Center for Management Research.
Hofstede, G. (1980) Motivation, leadership, and organization: do American theories apply abroad? Organizational Dynamics, 9(1), 42-63.
Kirsch et al. (2012) The impact of cross-cultural dynamics on change management, Cross Cultural Management: An International Journal, 19(2).
Mikhaeil, C. A. and Marescaux, E. (2020) Building power stations in the UK: a case of expatriate training and development, IESEG School of Management.
Rosenzweig, P. M. and Nohria, N. (1994) Influences on human resource management practices in multinational corporations, Journal of International Business Studies, 25(2), pp. 229-251.
Schein, E. H. (1990) Organizational culture. American Psychological Association, 45(2), p. 109.
Schuler, R. S. and Tarique, I. (2007) International human resource management: a North American perspective, a thematic update and suggestions for future research, The International Journal of Human Resource Management, 18(5), pp.717-744.
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