Global Impact on HRM
GLOBAL IMPACT ON HRM 12
GlobalImpact on HRM
GlobalImpact on HRM
Internationalbusiness has presented both benefits and challenges as part of thecontinued impact on the global business environment. Among thedepartments in a typical organization impacted international businessis the human resource management. In light with this impact, thispaper explores the effects of international business on the humanresource management. This analysis will explore cultural, social,economic and political diversities that impact on the human resourceof a business organization engaging in international trade. Inaddition, this paper seeks to explore the challenges faced by suchorganizations in managing the human resources at the internationalcontext. Through this understanding, this paper will proposepreparations that such organizations should take when venturing ininternational business.
InternationalBusiness and HRM
Internationalbusiness entails business operations in more than one countryespecially countries with diverse macro and micro environmentaldynamics. Business environment presented in the internationalbusiness presents both opportunities and challenges for the humanresource function of the company (Briscoe et al. 2012). Throughengagement in international business, a company is able to establishnew business frontiers that develop its growth and profitability(Amason, 2011). These bring new opportunities of expanding the humanresource function from local level to external level.
Dueto the engagement in international business, the human resourcefunction of the organization will have to expand and grow in size.Due to such developments, the expanded human resource functionpresents new challenges as the company works to manage thediversified staff (Briscoe et al. 2012). The challenge is felt bythe human resource managers as they try to solve the problems thatemployees face in the new countries problems that managers may notbe familiar with.
Theimpact of global business is further magnified by the geographicallocations of the countries that the company operates into. Briscoe etal (2012) argues that it becomes a larger task to manage the samenumber of employees but located in different countries. In a furtherincrease of the size of the HR team in different countries lead tofurther challenges on the side of the management (Cascio, 2006).Moreover, the diversities in the location come along with culturaldiversities based on these countries (Lawrence & Weber, 2005).This makes the management of human resource a diversified functionthat has to handle dynamics of social, economic and politicaldiversities in the countries that the company has businessoperations.
Establishmentof international business has led to the adoption of different levelsof business IT applications to enhance management. These managementsystems have forced the human resource function to embrace thetechnological systems to manage the employees and staffing functions(Collings & Wood).For instance, IT and social media has been instrumental inintroducing new channels for the management to engage with theemployees (Isaacson & Peacey, 2012). Many organizations haveinstalled instant messaging in their computer systems forcommunication both in-house and outdoor communication. This has ledto the closure of the gap between the management and the employees(Isaacson & Peacey, 2012). However, not many managers arefamiliar with the new technology communication platforms.
GlobalDiversities on HRM
Cultureand Cultural Diversities
Cultureaffects communication by creating cultural diversities that lead todifferent understanding of the same message by different people.According to Foreyand Lockwood (2011), thishappens because the communication process is vulnerable to culturaland social differences among people. In particular, culturaldifferences affect the communication due to different methods used toencode and decode the message by different social and culturalcontexts.
Forinstance, a manager in a different country may face challenges incommunicating new behavioral policies to foreign employees that arenot part of their culture. The communication process is affected byculture because it is a process that has to be contextualized for thesender and receiver to interact. Foreyand Lockwood (2011) argue that the process must involve informationthat is held by the communicators prior to the sharing of themessage. In addition, every interaction must be between two or morepeople who have cultural contexts. Therefore, their previousinformation, practices, believes, opinion and prejudices may becarried into the communication process(Briscoe et al. 2012).
Socialdifferences in different countries impact on the interaction betweenemployees and the human resource management as well as amongthemselves. In addition, social differences among countries arebacked by diversities in the economic growth and development of theeconomies. Somecountries have slow growing economies, some have poor infrastructurethat affects transportation, communication and even power (Amason,2011). The value of the currency is also very low affectingimportation. Availability and retention of labor is also not the samein different countries owing to the level of education in thesecountries. Socioeconomic diversities impact on the abilities of theworkers and the potential that each country will have on the globalbusiness environment.
TheDifferences in Economies and Social Status of Countries
Politicaldiversities present different labor laws that impact on theprocedures and policies for hiring, compensating, maintaining andfiring workers. These diversities exist because differentgovernments have different rules and regulations governing theoperations of these sectors in their countries (Hayton, 2012). Insome countries, foreign companies are not allowed to hire foreignemployees for their foreign business operations whereas in othercountries are free. In some countries, a certain percentage ofemployees should be local natives of the country of operation of thecompany (Collings& Wood). In addition to restricted foreign investment, different governmentsalso have other different rules that affect these sectors examplesinclude strict labor laws that affect the recruitment and dismissalof workers, laws on working hours, taxation and movement ofcommodities from one state to another (Amason, 2011).
Indifferent countries, different labour unions and procedures ofsolving employee-employer conflict also impacts on the human resourcemanagement of a business operating in different countries. This isbecause it will take the management time to learn the diverse laws aswell as legal procedures relating to the resolution of conflicts withemployees (Briscoe et al. 2012). In addition, the procedures that themanagement uses to hire and fire employees as well as interact withtheir labour unions are different form that the foreign employeeswant to adopt. These diversities impact on the ability of themanagement to handle foreign employees effectively.
Challengesof International Business for HR
Oneof the most common challenges human resource faces in staffingforeign staff is cultural differences (Forey & Lockwood, 2011).This is because the differences hinder the communication process dueto the diverse cultural aspects used to encode and decode themessage. Cultural challenges affect the responsiveness of theemployees to different management policies especially where there isa wide gap in the cultural contexts that these policies exist in(Hayton, 2012). For instance, many older generation employees mayfind it culturally challenging to respond to orders from youngerseniors or women seniors. This is particular in the culturallydiscriminative communities that tie their adherence to instructionswith religion.
Infurther complication, cultural diversities drag the complexities oftiming of employees work and working days. Some cultures andreligions do not work during certain days as well as certain seasons(Lawrence & Weber, 2005). This means that the human resourcemanagement will be forced to align the work-schedule of some staff totheir cultural holidays. For instance, a Christian manager in asIslamic countries will be forced to align the working scheduleaccording to the Islamic calendar and prayer times which isdifferent for the western culture dominated by the Christiancalendar.
Anotherchallenge that is presented by social-cultural diversities iscommunication in the organization. Communication is another aspect ofculture and foreign country that a business organization faces whenoperating in a different country. Communication among theorganizational staff when a company is operating in differentcountries is challenging due to differences in language. Thispresents a big problem especially when the management is translatingpolicies from the country of origin to the foreign country (Cascio,2006). The use of one language in formulation organizational policiesand regulations presents the company’s human resource function witha challenge of standardizing the compliance. Moreover, communicationbecomes a challenge between the human resource management and newemployee’s in the quest for orientation.
Anotherchallenge is adapting to the economic, political and legalenvironment presented by the foreign positions. For instance, theyface challenge of understanding and incorporating foreign laws onhuman resource, taxation and staffing requirements. Economicchallenges encompass abilities of the international business to payemployees from their independent business production (Briscoe et al.2012). Political challenges are based on the management of humanresources in the context of foreign legal requirements that a companymust meet in its dealings with its employees. The company also has tolearn different procedures of hiring, firing and compensatingemployees as provided for by the laws of the foreign country.
Preparingfor the Challenges
Humanresource management can prepare for the challenges by anticipatingtheir occurrence and taking administrative and human resourcedevelopment measures. The first preparation is to research on thechallenges that may face the human resource function due to thedevelopments in the international business. Through the research, abusiness will establish international environmental challenges thatface the business in specific fields. These challenges are presentedby the environment as a way of operation or as part of specificenvironmental dynamics of a certain business (Perkins &Shortland, 2006). The research will disclose the nature of suchchallenges and describe the methods through which such challenges canbe tackled. Such research will also indicate how existing businesseshave handled the challenges in the past.
Throughthe research, a company will be able to learn foreign environmentsand how to establish it operations in foreign countries. In addition,the research will prepare the human resource function on the changesthat have occurred in the international business environment thatwill impact on the business (Peter & Adrian, 2003). Through theunderstanding of these changes, the human resource function of abusiness will restructure their plans and policies to fit theenvironment. This is important in the formulation of regulations,policies, staffing guides and job descriptions to fit the environment(Hayton, 2012). In addition, the research will indicate the extent atwhich the changes in the international business will impact on thehuman resource function and the effectiveness of the proposedpreparation measures.
Inpreparation, the human resource function should engage in appropriatehuman resource development. This makes the human resource function tobe equipped as per the demands in the international businessenvironment. Human resource development will entail trainingemployees to match the requirements of the international businessenvironment (Peter & Adrian, 2003). This will involve improvedorientation of the new employees to the new markets and businessoperations of the organization (Perkins & Shortland, 2006).Developing human resource for the international business in theorientation stage is important since it gives them skills of both thebusiness and the external environment at the same time (Cascio,2006). Such trainings will also help existing employees to developtheir skills beyond their current status to the levels dictated bythe changing international business environment.
Abusiness can also prepare for the challenges presented by theinternational business by embracing new technology and communicationtools. These will help it to establish new platforms forcommunication and managing the human resource. Through globalization,businesses establish new businesses in different locations in theworld. Due to these geographical diversities, managing the humanresource and communication to them regularly is important in bringingcohesion in the organization (Peter & Adrian, 2003). This callsfor a concerted effort of the management to use new communicationchannels provided by the internet such as instant messaging andvideoconferencing. In addition, the business can install a reliablehuman resource development system that will enable it to managepeople effectively.
Moreover,the business can establish e-recruitment system in line with theestablishment of a human resource system. E-recruitment will offernew platforms of selecting employees without applying paper work orestablishing costly interviewing procedures (Matt, 2011).Through ITcompanies will be able to establish ready databanks of potentialemployees in their databases. In addition, social media aree-recruitment has been instrumental recruitment by establishingcompany profiles, advertising for jobs, posting application links andalso evaluating prospective employees through their social mediaprofiles (Matt, 2011).
Finally,the human resource management should allocate people jobs accordingto their preferred locations as well as their cultural orientations.The management can also allocate staff to countries of their originto avoid cultural challenges employees are posted to differentcountries (Perkins & Shortland, 2006). The human resourcefunction should start events and activities that enhance teambuilding and social interaction among it employees. This will solvethe challenge of cultural diversities that will enable employees of abusiness to learn about each other. Through this learning, thecompany will establish a culturally-responsive human resource team.
Internationalbusiness presents new frontiers through which business enjoysopportunities that lead to expansion of the human resourcemanagement. In addition, global business ventures presentschallengers that a company’s management must face to enjoy thebenefits of international business environment. This is because thebusiness is impacted with challenges that arise from social,cultural, economic and political diversities. All these diversitiescalls for a well prepared human resource management function thatshould be planned to overcome them. To overcome the challenges, thecompany should carry relevant research, adopt the right managementtechnology, develop the human resources well and establishculturally-responsive management policies. This way, the organizationwill establish robust human resource function for internationalbusiness.
Amason,A. C. (2011). Strategic management:from theory to practice. New York,N.Y.:
Briscoe,D., Schuler, R., & Tarique, I. (2012). InternationalHuman Resource Management:
Policiesand Practices for Multinational Enterprises. London:Taylor & Francis
Cascio,W.(2006). “Managing Human Resources:Productivity, Quality Of Work Life, And
Profits”,(7th ed.). New York: Irwin/McGraw-Hill.
CollingsD. & G. Wood. Human resourcemanagement: A critical approach.London: Routledge
Forey,G., & Lockwood, J. (2011). Globalization,Communication and the Workplace: Talking
acrossthe World. New York: ContinuumPublishing
Isaacson,K. , & Peacey, S. (2012).Humanresources and Social media. KPMG.Retrieved From,
<http://www.kpmg.com/US/en/IssuesAndInsights/ArticlesPublications/Documents/human-resources-social-media.pdf>April 22, 2014
Hayton,J. (2012). Global Human ResourceManagement Casebook. London: Taylor&
Lawrence,A., & Weber, J. (2005). Businessand society: stakeholders, ethics, public policy.
Pennsylvania:Pennsylvania State University
PeterA., & Adrian W. (2003). UnderstandingWork and Employment: Industrial Relations in
Transition.Oxford University Press.
Perkins,S., & Shortland, S. (2006). StrategicInternational Human Resource Management:
Choicesand Consequences in Multinational People Management. London:Kogan Page Publishers