INTERNATONAL HUMAN RESOURCE MANAGEMENT

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Q1:

The businesses have lots of resources, including finance, facilities, equipment and people, to create goods and services serving the needs of customers (Bernard, 2012). Most businesses have to build the procedures and processes of the supply of materials and equipment to ensure adequate supply when necessary. Similarly, they also need to pay attention to the processes of human resource management (HRM) – one of their most important activities in the course of the operation and development. Especially, in the context of the current globalization, HRM has become more important because the scope of operation of the businesses has been extended to many different countries, even worldwide, thereby, they become multinational enterprises (MNEs). As a result, with larger scale, more complex activities and cultural diversity, the global or international HRM become more difficult for these organizations, particularly the international HR department, which have to face with many challenges in managing theri human resource. To manage international human resource well, the international HR department has to perform the global HR strategies effectively. However, there are some factors determining the approach of this department to their management of overseas operations (Crawley, Swailes and Walsh, 2013).

According to Stahl, Bj and Morris (2012), international human resource management (IHRM) is a topic studied quite a lot in recent decades. The authors also provide the definition of this concept as follows: “IHRM is a branch of management studies that investigates the design and effects of organizational human resource practices in cross-cultural contexts” (p. 532). More specifically, IHRM is a system of planning and coordinating the organizations’ processes as job  and job design, recruitment, training and development, evaluation, compensation, and worker protection in the global environment. In fact, the IHRM is HRM overcoming the boundaries of national territory, so it is very complex. In fact, there are four approaches applied by MNEs to manage the staffs in their subsidiaries: ethnocentric, polycentric, regiocentric, and geocentric or the EPRG model, which is developed by Perlmutter (1969, cited in Zentes, Morschett, and Schramm-Klein, 2011). Normally, these approaches are conducted and managed by an IHRM department in the MNEs. Meanwhile, this development of this department is impacted by how businesses engage in global markets, organizational structure, strategic goals, and values of MNEs. They are the decisive factors affecting the role, policies, activities, and contribution of IHRM to the business” (Crawley, Swailes and Walsh, 2013, p. 9). Thereby, the authors also point out some factors that determine the approach of IHRM department in the process of managing overseas operations include:

Organizational structure: The key activity of MNEs decide their organizational structure in order to achieve maximum business performance. The organizational structure is the arrangement of the small parts or units in the organizations into a unified body, and the establishment of relationships about duties and powers between individuals and businesses in order to  set up a favorable environment for the operations and achieve common goals (Dubrin, 2011). In the case of MNEs, the international organizational structure presents the ways MNEs organize the companies and implement their objectives through organizing and managing their human resource. At the same time, IHRM not only supports the organizational structure but also organizes human resource effectively for all headquarters and subsidiaries of the MNEs (Tarique, Briscoe, and Schuler, 2012). In addition, the international organizational structure is affected by the strategy of MNEs, environments and situations, characteristics of production technologies, and personnel. There are various types of international organizational structures that are applied by MNEs show the approach of IHRM department to their management of overseas operations as: International division structure – concentrates all activities of into one division having same status with their local divisions; Global product structure – organizes and manages the human reource by the different product lines; Global geographic area structure – organizes and manages the human reource by the separate geographic areas; Global functional structure – establishes and manages the structure of the human reource according to their major functions; Matrix or three-dimensional strcture – combines and divides the human reource by product, functional, and geographic area; and Network structure – bulids many dispersed units or subsidiaries focusing on specific products, areas, etc. From there, it can be seen that IHRM department can choose many different approaches to their management of overseas operations among numerous organizational structures (Crawley, Swailes and Walsh, 2013).

Organizational orientation: This factor can determine the approach of an international HR department to their management of overseas operations because it focuses on identifying the persons’ decision when joining a company and encouraging him/ her to integrate into the company’s environment right from the start to work there (Arthur, 2012). In other words, the ways used by IHRM department when recruiting and motivating their new staffs affect their approach in managing the diverse workforce. In particular, for the IHRM departmentsof MNEs, the organizationa orientation becomes more important because in the international working conditions, adapting to the new environment, schedules, expectations of companies and departments is not easy for newcomers. Crawley, Swailes and Walsh (2013) also confirm that the orientation or values of the organizations, particularly the stance of MNEs towards their affiliates, can influence the remit of the IHRM department. As mentioned above, the ERPG model includes four forms used by MNEs in managing their subsidiaries. More specially, this model indicates the level of control of the holding companies for the activities of their subsidiaries. This also presents the results of several orientations in the staffing outcomes through the appointment and development of the managers or staffs (Crawley, Swailes and Walsh, 2013).

National and organizational culture: When operating globally, MNEs have to face with the challenges of diverse cultures of various staffs coming from many different countries in the world (Blanpain & Baker, 2010). This raises an issue about cultural conflicts among the members of the organizations. Therefore, MNEs, especially IHRM department, must pay attention to the mediation of these contradictions existing in different national cultures and make them consistent with the organizational culture in order to achieve the overall goals of the organizations. Rowley & Warner (2013) confirm that the national cuture has direct influence organizational HR strategy of MNEs through individual motivation. Meanwhile, the MNE’s organizational culture is responsible for the direction, control and unity all activities of employees to achieve organizational goals. Moreover, organizational culture also helps MNEs determine the methods to control and impact on overseas affiliates through the implementation of IHRM. In addition, the impact of diverse culture on the sucess of IHRM also affirmed in the research of Tarique, Briscoe, and Schuler (2012). Specially, the authors point out that the MNEs, IHRM and HRM in the foreign branches are influenced by the national and organizational culture in term of recruitment, business cooperation, language and communication, the fairness of the organizations, decision-making, assessment and feedback, management and leadership, career awareness, and the development of global thinking. Besides, the cultural diversity also poses a problem for the appropriate selection of key positions in top management at the overseas subsidiaries (Camilo, 2015). Accordingly, the MNEs can use local, regional, or foreign managers, but these choices have to meet the efficiency, encouragement and fit with both the national and organizational culture. In addition, IHRM department needs to understand that the differences in culture exist in not only the national cultures but also the organizations in the same countries (Child, 2015). This author also confirms that the cultural diversity is not really a barrier of MNEs because it contains a lot of value that can be understood by companies help the MNEs conquer the local markets. Further, Child (2015) suggests two key selections which are applied by the MNEs to manage the cultural diversity well include: the integration of national culture with the organizational culture and the maintenance of the cultural diversity within their organizations. From there, the author gives four possibilities can be done by IHRM department in managing their overseas operations as cultural pluralism – promotes national culture of overseas subsidiaries;  cultural segmentation – meets both the national and organizationalcuture, cultural domination – adheres to one national culture taken as the dominant culture for both the parent companies and foreign subsidiaries, and cultural synthesis – creates a new culture for the MNEs based on the unity all the national culture existing within the organizations.

HR is one of the most important components to make up the success of every business. For multinational companies, IHRM is very significant task in term of organizing and managing human resource at headquarters and overseas branches. The MNEs can apply one of the HR approach as ethnocentric, polycentric, regiocentric, and geocentric (EPRG model of Perlmutter, 1969). In term of the management of overseas operations, there are three key factors determining the selection of an approach of IHRM department as organizational structure, organizational orientation, and national and organizational culture. From there, the IHRM department of MNEs should considere and attend to these factors in order to choose the best approach of their international human resource.

References

Arthur, D. (2012). Recruiting, interviewing, selecting & orienting new employees. AMACOM Div American Mgmt Assn, pp. 297 – 345.

Bernard, P. (2012). The IT Service Part 1 – The Essentials. Best Practice. Van Haren, pp. 50 – 72.

Blanpain, R. & Baker, J. (2010). Comparative labour law and industrial relations in industrialized market economies. Kluwer law international, pp. 109 – 135.

Camilo, A. A. (2015). Global Enterprise Management, Volume I: New Perspectives on Challenges and Future Developments. Palgrave Macmillan, 24 – 56.

Child, J. (2015). Organization: contemporary principles and practice. John Wiley & Sons, pp. 331 – 380.

Crawley, E., Swailes, S., & Walsh, D. (2013). Introduction to international human resource management. Oxford University Press, pp. 9 – 25.

DuBrin, A. (2011). Essentials of management. Cengage Learning, pp. 263 – 298.

Rowley, C., & Warner, M. (2013). Globalizing international human resource management. New York: Routledge, pp. 117 – 156.

Stahl, G. K., Bj, I., & Morris, S. (Eds.). (2012). Handbook of research in international human resource management. Edward Elgar Publishing, p. 532.

Tarique, I., Briscoe, D. R., & Schuler, R. S. (2012). International Human Resource Management: Policies and Practices for Multinational Enterprises. Global HRM. Taylor & Francis, pp. 72 – 105.

Zentes, J., Morschett, D., & Schramm-Klein, H. (2011). Strategic International Management: Text and Cases. Springer Science & Business Media, pp. 35 – 57.

 

Q2:

In the context of the current globalization, human resource policy of the companies has made big changes. They can recruit foreigners to work for the parent companies or their affiliates, or send employees on expatriate assignments. At each different stage of internationalization, the MNEs can implement separate key HR policies. To achieve the highest results, managers of these companies need to think carefully through reviewing the own advantages and disadvantages of each HR policy. One phenomenon that often occurs in the multinational enterprises (MNEs) is the labor movement. From there, it raises a term namely expatriate, who works “on terms which are different from the normal local terms in the country” (Bussin, 2015, p.35). Because there are significant differences compared with local staffs, the employers should consider a number of factors before sending employees on expatriate assignments as follows:

Internationalization stages: According to Crawley, Swailes and Walsh (2013), the employers should consider internationalization phases of their companies before sending the employees to foreign countries. The authors point out four basic stages of an MNE as “domestic, international, multinational, and global” (p.12). In the first stage, the businesses mainly focus on the domestic market and only export as appropriate, therefore, sending staffs to work abroad is not really necessary. However, MNEs may appoint salespeople or technicians going to abroad in order to learn experience and improve their skills in this phrase. Moving to the next phases, the MNEs both concentrate to meet local needs and strengthen their presence in foreign markets, so sending employees on expatriate assignments is very necessary to help the companies quickly understand and dominate new markets (Crawley, Swailes and Walsh, 2013).

HR policy orientations: With every multinational company, the orientation and choice of HR policy is extremely important. They can apply three key policies including ethnocentric, polycentric and geocentric policy (Paul, 2011). Before sending employees abroad, the managers need to consider the current orientations of the personnel policy of the companies in line with their general orientations. In ethnocentric HR policy, the managers only send staffs coming from home country on assignments in their overseas affiliates. The businesses want to keep the ability to control strictly for decision-making in the foreign branch offices and provide a designing policy for all tasks in every branch, so they think that the people having same country will be loyal and help the enterprises implement the unified control. On the contrary, if following the polycentric policy, MNEs often do not need to send the employees on expatriate assignments because they use foreigners to work at the local branch in that country. Normally, MNEs organize the accelerated training programs for local managers at the headquarters to provide insight about corporate culture and business practices. Meanwhile, MNEs may send or not the employees on expatriate assignments, which depends on the selection of the employers with the geocentric policy. Under this policy, MNEs use highly qualified people from the host country, the parent national, or the third country. The choices depend primarily on the needs of certain business activities and competencies of managers. In other words, the employees can be sent to any subsidiary or office (Camilo, 2015).

Selection criteria: One of the top issues that multinational companies need to solve is to recruit the right people for the right positions in foreign subsidiaries (Owen, et al., 2012). Obviously, to recruit highly qualified managers as well as non-management employees who have the most suitable skills and experience for the jobs, the employers need to identify their recruitment needs, recruitment sources and selection criteria. After determining the need and sources for personnel, the managers have to make a specific selection criteria. These are the basis used to select employees who are considered as the right people for the jobs at branches in foreign countries. Every business has a list of certain criteria for selecting staffs to work abroad, but the employers also attach importance to consider these factors for both employees and their families (Cullen & Parboteeah, 2013). The authors suggest some selection criteria as professional skills, relational abilities, international motivation, family situation, and language skills, to reach the success. The authors also provide some selection methods to determine the right employees for the expatriate assignments as interviews, tests, biographical data,… In addition, according to Hashim & Majeed (2014, p.333), the important selection criteria include: “adaptability to new culture, flexibility, attitude and motivation, tolerance and open-mindedness, previous international experience, and managerial talents”. In addition, there are some other less important criteria as “age, gender, marital status” (Hashim & Majeed, 2014, p.333). In addition, the study of Sarkiunaite & Rocke (2015) also confirms that the selection of right people plays important role in the sucess of sending employees on expatriate assignments. Especially, the authors find out that the adjustment of the expatriates is the most significant role in this. Accordingly, the ability to adapt to the changes of living and working environments, including the adaptation to new culture, is the key criterion in the selection of staffs to work abroad. Apparently, the cultural adaptation is an important factor contributing to achieve the international business objectives of MNEs. In contrast, if the employee are unable to adapt to a new cultural environment, they will easily fail when working in foreign countries. In fact, the multinational companies often assess the adaptability of the employees based on the experience in working with individuals who come from a different culture, foreign trips, foreign language ability, the ability to solve problems at various levels, the sensitivity to changes in the environment. Moreover, personality and attitude of the employees are the criteria to be considered before sending them abroad. The enterprises should pay attention to seeking the individuals who want to work abroad prefer the changes adventure, exploration, promotional opportunities as well as the improvement of economic status. With these motivations, the employees will easily adapt and become more enthusiastic in their work at the foreign subsidiaries (Chan, 2014).

Training and development: Before sending the employees on expatriate assignments, the employers have to consider about the training and development programs for them in order ensure the expatriate success. DeNisi & Griffin (2015, p.74) define the training as “instruction directed at enhancing specific job-related skills and abilities and most often focuses on operating employees and technical specialists”. Meanwhile, development is also one of the requirements for the employers before sending their employees on expatriate assignments. And it can be taken place in host country, parent country, or the third country (Hughes, 2014).  According to Bohlander & Snell (2010, p.675), the training and development  program include “language training, cultural training, assessing and tracking career development, managing personal and family life, and repatriation”. These are extremely important components to equip enough knowledge and skills in order to allow the employees to fulfill their international assignments. Especially, the cross-cultural training plays key role in the preparation for the employees before going to work abroad to avoid unnecessary conflicts or misunderstandings in new cultures and get successful information on the work (Sergi & Adekola, 2012). The authors also point out that the good cross-cultural training helps the employees reach the higher success and satisfaction, so it contributes to reduce the failure rate of the expatriate assignments.

Remuneration policy: According to Miryala (2015), an efficient and fair remuneration policy is especially important for personnel management. It is designed to attract and retain the best employees and reward them when they achieve the good work results. Because the   practices of remuneration policy in each country comes from the cultural, economic and legal systems, the determination of the level of remuneration can be quite complex in different countries. According to Cullen & Parboteeah (2013), when sending the employees on expatriate assignment, the employers also have to fully consider their total incomes including base salary, benefits, subsidies, bonuses, and tax incentives. Specially, base salary for the expatriates is “the same as the base salary for a comparable position in the home country” (Yu, 2012, p.285). the different countries have separate basic salaries. For example: the base salary of a senior US manager is about $360,000 in Tokyo, and $210 in Singapore (Cullen & Parboteeah, 2013). Benefits include medical insurance, social security, pensions, expenses for vacation and sabbatical for employees and their families. Subsidies are a part of income compensating for the changes in living and working environments. The subsidies for living expenses include subsidies for the the price differences between the country and abroad where they work, the displacement of job,  housing and education for children of the employees, and the difficulty of working places. Bonuses and tax incentives helps the companies keep the employees when they accept to work in foreign subsidiaries. In addition, the employers need to consider another factor, namely income tax. For example, US government allows citizens to work abroad and do not pay income tax on the income coming from abroad, even when these incomes are gained in the countries not applying income tax for the expatriates (Whittenburg, Altus-Buller, and Altus-Buller, 2011).

 

References

Bohlander, G., & Snell, S. (2010). Managing human resources. Cengage Learning, pp. 675 704.-

Bussin, M. (2015). Expatriate Compensation: A practical and informative textbook for managing expatriate compensation, mobility, and international assignments in the world of work. Knowres Publishing, p. 35.

Camilo, A. A. (2015). Global Enterprise Management, Volume I: New Perspectives on Challenges and Future Developments. Palgrave Macmillan, 24 – 56.

Chan, D. (2014). Individual adaptability to changes at work: New directions in research. New York: Routledge, pp. 24 – 56.

Crawley, E., Swailes, S., & Walsh, D. (2013). Introduction to international human resource management. Oxford University Press, pp. 12 – 43.

Cullen, J., & Parboteeah, K. P. (2013). Multinational management. Cengage Learning, pp. 445 – 479.

DeNisi, A. & Griffin, R. (2015). HR 3. Cengage Learning. ISBN: 9781305478107, p. 74.

Hashim, R., & Majeed, A. B. A. (Eds.). (2014). Proceedings of the Colloquium on Administrative Science and Technology: CoAST 2013. Springer, p. 333.

Hughes, C. (Ed.). (2014). Impact of Diversity on Organization and Career Development. Advances in Human Resources Management and Organizational Development. IGI Global, pp. 88 – 105.

Miryala, R. K. (2015). Trends, Challenges & Innovations in Management: Volume I. Trends, Challenges & Innovations in Management. Zenon Academic Publishing, pp. 16 – 34.

Owen, J. et al. (2012). Business Basics: The Skills You Need to Succeed (Collection). FT Press, pp. 93 – 124.

Paul, J. (2011). International Business. PHI Learning Pvt. Ltd., pp. 462 – 490.

Sarkiunaite, I. & Rocke, D. (2015). The factors of international assignment sucess. Transformations in Business & Economics, 14 (1), pp. 20 – 47.

Sergi, B. S., & Adekola, A. (2012). Global Business Management: A Cross-Cultural Perspective. Ashgate Publishing, Ltd, pp. 239 – 275.

Whittenburg, G., Altus-Buller, M, and Altus-Buller, M. (2011). Income Tax Fundamentals 2012. Cengage Learning, pp. 15 – 32.

Yu, L. (2012). The international hospitality business: Management and operations. New York: Routledge, p. 285.

 

Q1:

The businesses have lots of resources, including finance, facilities, equipment and people, to create goods and services serving the needs of customers (Bernard, 2012). Most businesses have to build the procedures and processes of the supply of materials and equipment to ensure adequate supply when necessary. Similarly, they also need to pay attention to the processes of human resource management (HRM) – one of their most important activities in the course of the operation and development. Especially, in the context of the current globalization, HRM has become more important because the scope of operation of the businesses has been extended to many different countries, even worldwide, thereby, they become multinational enterprises (MNEs). As a result, with larger scale, more complex activities and cultural diversity, the global or international HRM become more difficult for these organizations, particularly the international HR department, which have to face with many challenges in managing theri human resource. To manage international human resource well, the international HR department has to perform the global HR strategies effectively. However, there are some factors determining the approach of this department to their management of overseas operations (Crawley, Swailes and Walsh, 2013).

According to Stahl, Bj and Morris (2012), international human resource management (IHRM) is a topic studied quite a lot in recent decades. The authors also provide the definition of this concept as follows: “IHRM is a branch of management studies that investigates the design and effects of organizational human resource practices in cross-cultural contexts” (p. 532). More specifically, IHRM is a system of planning and coordinating the organizations’ processes as job  and job design, recruitment, training and development, evaluation, compensation, and worker protection in the global environment. In fact, the IHRM is HRM overcoming the boundaries of national territory, so it is very complex. In fact, there are four approaches applied by MNEs to manage the staffs in their subsidiaries: ethnocentric, polycentric, regiocentric, and geocentric or the EPRG model, which is developed by Perlmutter (1969, cited in Zentes, Morschett, and Schramm-Klein, 2011). Normally, these approaches are conducted and managed by an IHRM department in the MNEs. Meanwhile, this development of this department is impacted by how businesses engage in global markets, organizational structure, strategic goals, and values of MNEs. They are the decisive factors affecting the role, policies, activities, and contribution of IHRM to the business” (Crawley, Swailes and Walsh, 2013, p. 9). Thereby, the authors also point out some factors that determine the approach of IHRM department in the process of managing overseas operations include:

Organizational structure: The key activity of MNEs decide their organizational structure in order to achieve maximum business performance. The organizational structure is the arrangement of the small parts or units in the organizations into a unified body, and the establishment of relationships about duties and powers between individuals and businesses in order to  set up a favorable environment for the operations and achieve common goals (Dubrin, 2011). In the case of MNEs, the international organizational structure presents the ways MNEs organize the companies and implement their objectives through organizing and managing their human resource. At the same time, IHRM not only supports the organizational structure but also organizes human resource effectively for all headquarters and subsidiaries of the MNEs (Tarique, Briscoe, and Schuler, 2012). In addition, the international organizational structure is affected by the strategy of MNEs, environments and situations, characteristics of production technologies, and personnel. There are various types of international organizational structures that are applied by MNEs show the approach of IHRM department to their management of overseas operations as: International division structure – concentrates all activities of into one division having same status with their local divisions; Global product structure – organizes and manages the human reource by the different product lines; Global geographic area structure – organizes and manages the human reource by the separate geographic areas; Global functional structure – establishes and manages the structure of the human reource according to their major functions; Matrix or three-dimensional strcture – combines and divides the human reource by product, functional, and geographic area; and Network structure – bulids many dispersed units or subsidiaries focusing on specific products, areas, etc. From there, it can be seen that IHRM department can choose many different approaches to their management of overseas operations among numerous organizational structures (Crawley, Swailes and Walsh, 2013).

Organizational orientation: This factor can determine the approach of an international HR department to their management of overseas operations because it focuses on identifying the persons’ decision when joining a company and encouraging him/ her to integrate into the company’s environment right from the start to work there (Arthur, 2012). In other words, the ways used by IHRM department when recruiting and motivating their new staffs affect their approach in managing the diverse workforce. In particular, for the IHRM departmentsof MNEs, the organizationa orientation becomes more important because in the international working conditions, adapting to the new environment, schedules, expectations of companies and departments is not easy for newcomers. Crawley, Swailes and Walsh (2013) also confirm that the orientation or values of the organizations, particularly the stance of MNEs towards their affiliates, can influence the remit of the IHRM department. As mentioned above, the ERPG model includes four forms used by MNEs in managing their subsidiaries. More specially, this model indicates the level of control of the holding companies for the activities of their subsidiaries. This also presents the results of several orientations in the staffing outcomes through the appointment and development of the managers or staffs (Crawley, Swailes and Walsh, 2013).

National and organizational culture: When operating globally, MNEs have to face with the challenges of diverse cultures of various staffs coming from many different countries in the world (Blanpain & Baker, 2010). This raises an issue about cultural conflicts among the members of the organizations. Therefore, MNEs, especially IHRM department, must pay attention to the mediation of these contradictions existing in different national cultures and make them consistent with the organizational culture in order to achieve the overall goals of the organizations. Rowley & Warner (2013) confirm that the national cuture has direct influence organizational HR strategy of MNEs through individual motivation. Meanwhile, the MNE’s organizational culture is responsible for the direction, control and unity all activities of employees to achieve organizational goals. Moreover, organizational culture also helps MNEs determine the methods to control and impact on overseas affiliates through the implementation of IHRM. In addition, the impact of diverse culture on the sucess of IHRM also affirmed in the research of Tarique, Briscoe, and Schuler (2012). Specially, the authors point out that the MNEs, IHRM and HRM in the foreign branches are influenced by the national and organizational culture in term of recruitment, business cooperation, language and communication, the fairness of the organizations, decision-making, assessment and feedback, management and leadership, career awareness, and the development of global thinking. Besides, the cultural diversity also poses a problem for the appropriate selection of key positions in top management at the overseas subsidiaries (Camilo, 2015). Accordingly, the MNEs can use local, regional, or foreign managers, but these choices have to meet the efficiency, encouragement and fit with both the national and organizational culture. In addition, IHRM department needs to understand that the differences in culture exist in not only the national cultures but also the organizations in the same countries (Child, 2015). This author also confirms that the cultural diversity is not really a barrier of MNEs because it contains a lot of value that can be understood by companies help the MNEs conquer the local markets. Further, Child (2015) suggests two key selections which are applied by the MNEs to manage the cultural diversity well include: the integration of national culture with the organizational culture and the maintenance of the cultural diversity within their organizations. From there, the author gives four possibilities can be done by IHRM department in managing their overseas operations as cultural pluralism – promotes national culture of overseas subsidiaries;  cultural segmentation – meets both the national and organizationalcuture, cultural domination – adheres to one national culture taken as the dominant culture for both the parent companies and foreign subsidiaries, and cultural synthesis – creates a new culture for the MNEs based on the unity all the national culture existing within the organizations.

HR is one of the most important components to make up the success of every business. For multinational companies, IHRM is very significant task in term of organizing and managing human resource at headquarters and overseas branches. The MNEs can apply one of the HR approach as ethnocentric, polycentric, regiocentric, and geocentric (EPRG model of Perlmutter, 1969). In term of the management of overseas operations, there are three key factors determining the selection of an approach of IHRM department as organizational structure, organizational orientation, and national and organizational culture. From there, the IHRM department of MNEs should considere and attend to these factors in order to choose the best approach of their international human resource.

 

References

Arthur, D. (2012). Recruiting, interviewing, selecting & orienting new employees. AMACOM Div American Mgmt Assn, pp. 297 – 345.

Bernard, P. (2012). The IT Service Part 1 – The Essentials. Best Practice. Van Haren, pp. 50 – 72.

Blanpain, R. & Baker, J. (2010). Comparative labour law and industrial relations in industrialized market economies. Kluwer law international, pp. 109 – 135.

Camilo, A. A. (2015). Global Enterprise Management, Volume I: New Perspectives on Challenges and Future Developments. Palgrave Macmillan, 24 – 56.

Child, J. (2015). Organization: contemporary principles and practice. John Wiley & Sons, pp. 331 – 380.

Crawley, E., Swailes, S., & Walsh, D. (2013). Introduction to international human resource management. Oxford University Press, pp. 9 – 25.

DuBrin, A. (2011). Essentials of management. Cengage Learning, pp. 263 – 298.

Rowley, C., & Warner, M. (2013). Globalizing international human resource management. New York: Routledge, pp. 117 – 156.

Stahl, G. K., Bj, I., & Morris, S. (Eds.). (2012). Handbook of research in international human resource management. Edward Elgar Publishing, p. 532.

Tarique, I., Briscoe, D. R., & Schuler, R. S. (2012). International Human Resource Management: Policies and Practices for Multinational Enterprises. Global HRM. Taylor & Francis, pp. 72 – 105.

Zentes, J., Morschett, D., & Schramm-Klein, H. (2011). Strategic International Management: Text and Cases. Springer Science & Business Media, pp. 35 – 57.


Q2:

In the context of the current globalization, human resource policy of the companies has made big changes. They can recruit foreigners to work for the parent companies or their affiliates, or send employees on expatriate assignments. At each different stage of internationalization, the MNEs can implement separate key HR policies. To achieve the highest results, managers of these companies need to think carefully through reviewing the own advantages and disadvantages of each HR policy. One phenomenon that often occurs in the multinational enterprises (MNEs) is the labor movement. From there, it raises a term namely expatriate, who works “on terms which are different from the normal local terms in the country” (Bussin, 2015, p.35). Because there are significant differences compared with local staffs, the employers should consider a number of factors before sending employees on expatriate assignments as follows:

Internationalization stages: According to Crawley, Swailes and Walsh (2013), the employers should consider internationalization phases of their companies before sending the employees to foreign countries. The authors point out four basic stages of an MNE as “domestic, international, multinational, and global” (p.12). In the first stage, the businesses mainly focus on the domestic market and only export as appropriate, therefore, sending staffs to work abroad is not really necessary. However, MNEs may appoint salespeople or technicians going to abroad in order to learn experience and improve their skills in this phrase. Moving to the next phases, the MNEs both concentrate to meet local needs and strengthen their presence in foreign markets, so sending employees on expatriate assignments is very necessary to help the companies quickly understand and dominate new markets (Crawley, Swailes and Walsh, 2013).

HR policy orientations: With every multinational company, the orientation and choice of HR policy is extremely important. They can apply three key policies including ethnocentric, polycentric and geocentric policy (Paul, 2011). Before sending employees abroad, the managers need to consider the current orientations of the personnel policy of the companies in line with their general orientations. In ethnocentric HR policy, the managers only send staffs coming from home country on assignments in their overseas affiliates. The businesses want to keep the ability to control strictly for decision-making in the foreign branch offices and provide a designing policy for all tasks in every branch, so they think that the people having same country will be loyal and help the enterprises implement the unified control. On the contrary, if following the polycentric policy, MNEs often do not need to send the employees on expatriate assignments because they use foreigners to work at the local branch in that country. Normally, MNEs organize the accelerated training programs for local managers at the headquarters to provide insight about corporate culture and business practices. Meanwhile, MNEs may send or not the employees on expatriate assignments, which depends on the selection of the employers with the geocentric policy. Under this policy, MNEs use highly qualified people from the host country, the parent national, or the third country. The choices depend primarily on the needs of certain business activities and competencies of managers. In other words, the employees can be sent to any subsidiary or office (Camilo, 2015).

Selection criteria: One of the top issues that multinational companies need to solve is to recruit the right people for the right positions in foreign subsidiaries (Owen, et al., 2012). Obviously, to recruit highly qualified managers as well as non-management employees who have the most suitable skills and experience for the jobs, the employers need to identify their recruitment needs, recruitment sources and selection criteria. After determining the need and sources for personnel, the managers have to make a specific selection criteria. These are the basis used to select employees who are considered as the right people for the jobs at branches in foreign countries. Every business has a list of certain criteria for selecting staffs to work abroad, but the employers also attach importance to consider these factors for both employees and their families (Cullen & Parboteeah, 2013). The authors suggest some selection criteria as professional skills, relational abilities, international motivation, family situation, and language skills, to reach the success. The authors also provide some selection methods to determine the right employees for the expatriate assignments as interviews, tests, biographical data,… In addition, according to Hashim & Majeed (2014, p.333), the important selection criteria include: “adaptability to new culture, flexibility, attitude and motivation, tolerance and open-mindedness, previous international experience, and managerial talents”. In addition, there are some other less important criteria as “age, gender, marital status” (Hashim & Majeed, 2014, p.333). In addition, the study of Sarkiunaite & Rocke (2015) also confirms that the selection of right people plays important role in the sucess of sending employees on expatriate assignments. Especially, the authors find out that the adjustment of the expatriates is the most significant role in this. Accordingly, the ability to adapt to the changes of living and working environments, including the adaptation to new culture, is the key criterion in the selection of staffs to work abroad. Apparently, the cultural adaptation is an important factor contributing to achieve the international business objectives of MNEs. In contrast, if the employee are unable to adapt to a new cultural environment, they will easily fail when working in foreign countries. In fact, the multinational companies often assess the adaptability of the employees based on the experience in working with individuals who come from a different culture, foreign trips, foreign language ability, the ability to solve problems at various levels, the sensitivity to changes in the environment. Moreover, personality and attitude of the employees are the criteria to be considered before sending them abroad. The enterprises should pay attention to seeking the individuals who want to work abroad prefer the changes adventure, exploration, promotional opportunities as well as the improvement of economic status. With these motivations, the employees will easily adapt and become more enthusiastic in their work at the foreign subsidiaries (Chan, 2014).

Training and development: Before sending the employees on expatriate assignments, the employers have to consider about the training and development programs for them in order ensure the expatriate success. DeNisi & Griffin (2015, p.74) define the training as “instruction directed at enhancing specific job-related skills and abilities and most often focuses on operating employees and technical specialists”. Meanwhile, development is also one of the requirements for the employers before sending their employees on expatriate assignments. And it can be taken place in host country, parent country, or the third country (Hughes, 2014).  According to Bohlander & Snell (2010, p.675), the training and development  program include “language training, cultural training, assessing and tracking career development, managing personal and family life, and repatriation”. These are extremely important components to equip enough knowledge and skills in order to allow the employees to fulfill their international assignments. Especially, the cross-cultural training plays key role in the preparation for the employees before going to work abroad to avoid unnecessary conflicts or misunderstandings in new cultures and get successful information on the work (Sergi & Adekola, 2012). The authors also point out that the good cross-cultural training helps the employees reach the higher success and satisfaction, so it contributes to reduce the failure rate of the expatriate assignments.

Remuneration policy: According to Miryala (2015), an efficient and fair remuneration policy is especially important for personnel management. It is designed to attract and retain the best employees and reward them when they achieve the good work results. Because the   practices of remuneration policy in each country comes from the cultural, economic and legal systems, the determination of the level of remuneration can be quite complex in different countries. According to Cullen & Parboteeah (2013), when sending the employees on expatriate assignment, the employers also have to fully consider their total incomes including base salary, benefits, subsidies, bonuses, and tax incentives. Specially, base salary for the expatriates is “the same as the base salary for a comparable position in the home country” (Yu, 2012, p.285). the different countries have separate basic salaries. For example: the base salary of a senior US manager is about $360,000 in Tokyo, and $210 in Singapore (Cullen & Parboteeah, 2013). Benefits include medical insurance, social security, pensions, expenses for vacation and sabbatical for employees and their families. Subsidies are a part of income compensating for the changes in living and working environments. The subsidies for living expenses include subsidies for the the price differences between the country and abroad where they work, the displacement of job,  housing and education for children of the employees, and the difficulty of working places. Bonuses and tax incentives helps the companies keep the employees when they accept to work in foreign subsidiaries. In addition, the employers need to consider another factor, namely income tax. For example, US government allows citizens to work abroad and do not pay income tax on the income coming from abroad, even when these incomes are gained in the countries not applying income tax for the expatriates (Whittenburg, Altus-Buller, and Altus-Buller, 2011).

 

References

Bohlander, G., & Snell, S. (2010). Managing human resources. Cengage Learning, pp. 675 704.-

Bussin, M. (2015). Expatriate Compensation: A practical and informative textbook for managing expatriate compensation, mobility, and international assignments in the world of work. Knowres Publishing, p. 35.

Camilo, A. A. (2015). Global Enterprise Management, Volume I: New Perspectives on Challenges and Future Developments. Palgrave Macmillan, 24 – 56.

Chan, D. (2014). Individual adaptability to changes at work: New directions in research. New York: Routledge, pp. 24 – 56.

Crawley, E., Swailes, S., & Walsh, D. (2013). Introduction to international human resource management. Oxford University Press, pp. 12 – 43.

Cullen, J., & Parboteeah, K. P. (2013). Multinational management. Cengage Learning, pp. 445 – 479.

DeNisi, A. & Griffin, R. (2015). HR 3. Cengage Learning. ISBN: 9781305478107, p. 74.

Hashim, R., & Majeed, A. B. A. (Eds.). (2014). Proceedings of the Colloquium on Administrative Science and Technology: CoAST 2013. Springer, p. 333.

Hughes, C. (Ed.). (2014). Impact of Diversity on Organization and Career Development. Advances in Human Resources Management and Organizational Development. IGI Global, pp. 88 – 105.

Miryala, R. K. (2015). Trends, Challenges & Innovations in Management: Volume I. Trends, Challenges & Innovations in Management. Zenon Academic Publishing, pp. 16 – 34.

Owen, J. et al. (2012). Business Basics: The Skills You Need to Succeed (Collection). FT Press, pp. 93 – 124.

Paul, J. (2011). International Business. PHI Learning Pvt. Ltd., pp. 462 – 490.

Sarkiunaite, I. & Rocke, D. (2015). The factors of international assignment sucess. Transformations in Business & Economics, 14 (1), pp. 20 – 47.

Sergi, B. S., & Adekola, A. (2012). Global Business Management: A Cross-Cultural Perspective. Ashgate Publishing, Ltd, pp. 239 – 275.

Whittenburg, G., Altus-Buller, M, and Altus-Buller, M. (2011). Income Tax Fundamentals 2012. Cengage Learning, pp. 15 – 32.

Yu, L. (2012). The international hospitality business: Management and operations. New York: Routledge, p. 285.

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