international human resource management essays

International human resource management Report

Introduction, international human resource management, comparative human resource.

Human resource management involves the management of workers or employees in an organization. It depends on the cultural and institutional framework. Human resource management varies from country to country. Good human resource management, is defined differently in different national cultures, and operates differently across the globe. International organizations try to deal with issues created by these differences.

Today the world has become more global in terms of technology, economies and communications. The development of international enterprises has resulted to the decline in traditional business boundaries. This has led to high rates of economic development. It can be noted that multinational companies have dominated the world economy. About 63000 international organizations dominate the world trade (Budwar, 2005).

It accounts about two thirds of the world’s business. According to the recent study, each of the 10 largest multinational corporations has more annual sales than the Australian government tax revenues. Most of international business transactions involve two parts of multinational companies. Multinational companies act as global organizations with employees based in different parts across the globe.

Globalization has been enhanced through fiscal consolidation such mergers and acquisitions (Sisson, 2003). According to the recent statistics, the worldwide foreign direct investment increased from 6500 billion dollars in 2000 to 10000 billion dollars in 2005. Today there is also global transfer of work through the creation of new jobs or global sourcing part of an individual’s work.

The high skill white-collar job is being transferred to different countries. For instance, Bank of America is outsourcing about 1100 jobs, to Indian companies to reduce labor cost. The aim of this report is to explore the main issues and theories of international human resource management and comparative human resource management.

International human resource management is the process of employing and developing people in international organizations. It is the management of people across the globe. It identifies the way in which international companies manage human resources across different countries and different cultures.

It deals with the management of people beyond the national level. An international company is a company by which operations are carried out in subsidiaries overseas which rely on manufacturing capacity of the parent company. Different multinational companies have different magnitude attitudes and business styles (Wood, 2003).

Human resource managers in international companies have to consider the impact of international influences in their work. In all international companies’ human resource management is one the key aspects in the success of the company. In most of these organizations, the cost of managing people is the largest single item of operating costs.

The knowledge and capabilities inculcated in human resource is the key to success of the organization. Human resource management is vital to the survival and success of an organization. The human resource specialists are increasingly becoming internationally oriented in their functional activities.

This is important, for people working in multinational corporations also those in small and medium sized enterprises. In the modern world, there is fee economic environment. Restrictions on labor movements are reduced in areas such as European Community (Sisson, 2003).

The development of new technologies has enabled enterprises to operate internationally as soon as they are established. International corporations are not only in the private sector. Many international corporations, such as those in United Nations, the regional trade bodies, have employees working in different companies across the globe.

Human resource managers working in international corporations are faced with the impact of multi-country, regional and global change. Such managers are supposed to be equipped with interpersonal skills, negotiation skills, strategic thinking, analytical and conceptual abilities.

These managers will require a wide knowledge of knowledge in areas such as international business, international finance, local labor markets, international labor legislation, cultural differences, and international compensation and benefits. International human resource management involves organizations that manage people in different legal, institutional and cultural circumstances.

It should also be aware of cost effective management practices (Budwar, 2005). Companies, which address the issue of international human resource management, have to deal with a range of policy and strategic issues. International human resource management identifies how multinational corporations ensure that organizations have international coherence.

It also explores how organizations apply cost effective approaches to managing people working in different countries across the globe. It ensures that organizations are able to manage those people who have to work in different countries in the world.

International human resource management was believed to have the same main dimensions as human resource management in a national context but to operate on a large scale. It focuses on human resource practices that change when a firm goes international. The recent research on IHRM has pointed out the importance of connect human resource policies and practices with organizational strategies.

International management scholars have done extensive research on how multinational corporations have organized their operations globally. Several issues have been discussed by scholars. The strategy structure configurations of international organizations have been discussed by several authors. It involves changing from hierarchical structures to network structures.

The differences between local and international human resource management are another key issue discussed by authors such as Adler and Bartholomew. It establishes the great complexity and strategic importance of the international role. How multinational corporations approach the staffing and management of their subsidiaries is another key issue explored by researchers.

It provides factors for defining the modern approach to IHRM within an international organization. Organizational factors are considered to be very crucial in determining the extent of internal consistency.

Integrative models have been developed, by scholars to demonstrate the complexity of human resource decisions in the international sphere. However, these models do not provide a solution to criticisms that have been leveled to IHRM.

According to these criticisms the political, economic, social cultural and institutional contexts are described as contingency factors. This is despite the fact that it is known that firm level globalization is a country specific phenomenon.

Most of these models do not differentiate between cross national and cross cultural differences. Cultural relativity has made researchers focus on the hard human resource functional processes. Most of the researchers do not support idealist human resource management systems.

For instance, the view of human resource management emphasizes on high performance work systems as a basis of comparisons. The researchers tend to ignore the subtle ways in which cultural and national difference influence the experienced reality of human resource management. Convergence and divergence argument assumes that human resource management system has to converge or remain divergent.

It does not consider the fact that some parts of human resource system might be converging in some areas and converging in other areas (Dickmann, 2008). Analysis of IHRM should consider the range of distinctive national and local solutions to human resource issues in the organization.

Human resource affordability is another key issue in IHRM. The increased interest in metrics indicates the need to deliver proven cost reductions and ensure human resource affordability (Wood, 2003). Most of international organizations committing most of their times to ensuring people are why they can be most cost effective.

Most global human resource functions have undergone recent restricting in order to deliver global business strategies efficiently. Many international organizations are making substantial investments in getting things right. Human resource function is a path of organizational development which was identified in other service and specialist functions.

Physical and cultural differences present barriers to successful knowledge transfer among human resource professionals. Global networking is an important aspect within international human resource management.

However it is considered to be critical because of the identified organizational changes. International human resource professionals, mostly use informal networks, which is one of their main objectives. Networks are mostly applied in decentralized models of international human resource management. Global networks are used to reduce the impacts of bureaucracy and act as important decision making groups.

International human resource management involves a number of key issues, which are supposed to be considered. Culture and environment difference is a key issue in international human resources. The demand of the globalized and liberalized business environment has made researchers pay attention to the study of cultures as an explanatory variable.

Human resources managers across the globe have realized that it is essential to avoid parochial views when doing business across different cultures. Knowledge of cultural differences in different regions and a global focus is crucial for a business to survive in the modern business environment.

Culture is a collective mental programming that people in a certain group have in common. This programming is different from that of other groups, regions or nations. Today human resource managers of multinational corporations frequently encounter cultural differences. This has a negative effect to management practices in international organizations.

Family structures, religious organizations, forms of government, work organizations, law, settlement patterns and buildings are common beliefs that derive from common culture. Competing demands of globalization and local differentiation has led to the need to establish human resources as a source competitive advantage. Globalization process is identified at different levels of industry, firm and functions (Dickmann, 2008).

The impact of national culture on managing people involves the meaning of culture, the literature on cultural differences and identifies the extent to which aspects of work practices are nationally or locally based. Culture and organizational life involve the implications of performing business activities across national cultures for concepts of business management, and human resource management.

Leadership is a major factor that influences the shape of human resource policies and practices. Different national cultures have different leadership styles which influences the human resource management.

Individualism is a national culture attribute adopted by those people who give themselves and their families’ first priority. In this society, the ties between individuals are loose. Every person in this society looks at himself and the immediate family.

Collectivism involves people who give first priority to, and finding protection in, the wider group. In this, people are integrated into strong, cohesive groups which protect them in exchange for loyalty (Sparrow, 2004). Different cultures allow for different sharing of power within the society. The challenge is the level of human inequality that indicates the operation of each particular society.

Power distance is determined by power distance index. A society, which supports high power distance, will accept large separation of power between the rich and the poor in the society. Low power distance society will accept sharing of power where the gap between the top and the bottom is low.

Uncertainty avoidance is the extent to which a society can be able to put up with uncertainty. Low avoidance society will not feel the need to avoid uncertainty. High avoidance society will feel challenged by uncertainty (Dickmann, 2008). Masculinity is the tendency of a nation to prefer assertiveness and materialism.

It involves a community in which men’s roles are clearly defined. Femininity is where the society has a high concern for relationships and welfare of other people. In this case, the gender roles in the society overlap. According to Masculinity Index, Japan tops the list of countries with high gender roles distinction at work.

The low gender roles distinction at work was identified in France, Spain, Salvador and East Africa. It was characterized by cooperation at work and a close relation between employees and the boss. High gender roles were characterized by challenge and recognition in jobs, belief in individual decisions, high stress on the job, and preference for large corporations (Clark, 2000).

International human resource involves international organizational models. The first model is decentralized federation, which is the traditional multinational corporation. In this model, each national organization is managed as a separate company that seeks to optimize its performance in the local environment (Sparrow, 2004).

Coordinated federation is another model which involves the centre developing sophisticated management systems to maintain overall control although the scope is given to local management. Centralized hub is a model, which focuses on the international market rather than local markets. These organizations are global rather than multinational. Transnational is another international organization model.

In this model, the organization establishes multidimensional strategic capacities which help the organization to compete across the globe. It also enables responsiveness to market demands. Another key issue facing international organizations is convergence and divergence. This is the extent to which the international human practices should either converge in the same location or diverge in response to local requirements.

The major decisions are made by the parent company, but there is a need to much local autonomy as possible in order to ensure that local demands are taken into account (Dowling, 2008).

There are several factors that enhance increase in convergence, the power of markets, and the importance of cost, quality and productivity pressures benchmarking best practice. The idea of best practice theory recommends the implementation of best practices in human resource management, which will improve the performance of the organization.

There are several best practices for achieving competitive advantages through putting people first. These best practices include selective hiring, providing employment security, extensive training, sharing information, high payment based on companies’ performance among others. However, it is difficult to draw a generalized conclusion about which is the best human resource management practice.

Best fit or the contingency approach to human resource management is another approach of academic theory. It argues that human resource management may improve performance of an organization when there is a close relationship between the practices and company’s strategy.

This ensures that there is a close relationship between the human resource policies and the external market or business strategy (Guest, 2007). The life cycle model assumes that human resource policies can be based on the levels of organization development. Competitive advantage models assume that human resource policies are based on competitive strategy adopted by the organization.

Configuration models recommend for an organization to close examine its strategy in order to determine the best human resource policies and practices (Sparrow, 2004). This argument states that, the organization’s strategy can be highlighted, but many organizations thrive in a state of flux and growth. The resource based view is considered as the foundation of modern human resource management.

It concentrates on the internal human resources of the company, and how they contribute to competitive advantage. This model argues that human resource management plays a significant role in establishing human resources that are important and effectively organized.

The theory of human resource management assumes that the objective of human resource management is to enable a company to achieve it strategic objectives through attracting and maintaining employees. Human resource management approach attempts to ensure a close relationship organization’s employees and the overall strategic objective of the company (Brewster, 2002).

In the view of academic theory of human resource management, human beings are not robots, thus this call for the Importance of an interdisciplinary evaluation of staff in the work place. Academic fields such as economics, psychology, industrial relations and sociology play a vital role in enhancing the academic theory of human resource management.

Critical theories such as postmodernism and post-structuralism also play a very significant role in ensuring that people are treated well in the work place. International human resource management involves various processes, which enables achievement of established goals and objectives (Adler, 2000).

Comparative human resource management explains the way human resource management differs between different regions and countries across the globe. Most countries have more or less regional differences which includes one or many language groups.

Countries have different economic and political system, education, employment laws all these factors should be considered in order to understand and apply effective human resource management policies. Most nations have various cultures that have implications to human resource management (Clark, 2000).

Most organizations face challenges of adapting their human resource management practices to the new set of cultures. In the process of globalization, organizations begin to do business in different areas.During this process the number and variety of cultures changes. Organizations are supposed to adapt new human resource policies in order to curb these challenges.

As cultures increase and organizations try to treat each different culture with respect, several practical issues may come up making business operation more difficult. For instance, the case of religious and secular holidays to be honored based on the cultural representation in the work place. The official language spoken in the work place is another cultural issue influencing human resource management.

Many countries differ in terms of legal, political labor market, and economic conditions. These are critical issues affecting comparative human resource management. Comparative human resource management indicates how human resource practices are affected by different cultures.

Cultural perspective on comparative human resource management is based on Hofstede’s (1980). He identified four distinct cultural value dimensions. The four dimensions include power distance, uncertainty avoidance, masculinity/femininity, and individualism/collectivism.

According to him cultural differences are embedded to human resource manager’s way of thinking, which guides managerial actions and choices (Clark, 2000). Different cultures in different regions affect the human resource manager’s decision making and job performance. The effect of cultures on human resource management helps in understanding managerial behavior and reactions.

This notion has been highly criticized due to the limited number of dimensions, which do not capture the richness of the cultural environment. Effect of culture on human resource management is also challenged because of his insistence that national features persist over time. The four dimensions are statistical constructs developed on responses without a deep understanding of the underlying processes.

The issue of cultural differences indicates the differences between low context and high context societies. Context is described as the information that surrounds a certain event. In high context societies, the external environment and non verbal cues are very influential factors in the communication process (Clark, 2000).

High context cultures include countries such as Japan, Arab and southern European societies. Low context cultures involve clear and written forms of communication. Examples of low context societies are Anglo-Saxon and northern European. Culture is viewed as important values regarding relationships among people and their environment. Kluckhohn developed four basic value orientations.

He later subdivided these orientations into dimensions to determine cultural variations across different societies. These cultural orientations have been used, by researchers to explain significant differences of human resource management practices across different nations in the world. However, these orientations are rarely applied to human resource management research because of the complexity.

Recently additional cultural dimensions have been developed to identify the effect of culture on the design and implementation of human resource management policies and practices. For instance, development of the paternalism dimension is one of the significant cultural dimensions.

It involves the extent to which a society encourages and accepts that, people with authority provide care, guidance and protection to their subordinates. Subordinates in paternalistic societies are respect and loyalty to their superiors. Another recent cultural dimension is fatalism which is the belief of societal members that the results of their actions are not totally controlled.

Managers who take on managerial posts in a certain culture are socialized along similar values and beliefs. The character of culture helps to socialize new generations of members and reinforce the predominant cultural values and norms. According to social cognition theory, a person’s cognition is greatly influenced by ones cultural background.

Culture usually affect the way in which individuals choose, interpret and validate information in order to identify and categorize issues (Adler, 2000). It is a powerful determinant in how human performance problems are viewed and how their solutions in the form of employee development.

Cultural values normally influence how human resource management practices such as recruitment, selection, promotion, performance appraisal are designed and implemented. (Begin 377)

Different cultures are adopted by different social groups (Dickmann, 2008). These social groups may make the adoption of certain human resource management policies politically and socially unacceptable. The impact of culture on human resource policies through impact on institutions is an important mechanism. Cultural differences influence the key comparative human resource management practices.

For instance, recruitment, selection and retention practices differ across different cultures. Recruitment and selection in cultures of high performance orientation are based job related knowledge and technical skills. Collectivist cultures prefer the use of internal labor markets to promote loyalty.

The externally recruited candidates find it difficult to enter the strong social networks within the organization. High on uncertainty avoidance cultures use a lot of selection tests, and conduct more interviews (Tayeb, 2005). This shows that there is a great desire to collect objective data for making selection decisions.

Cultures high on performance orientation use standardized and job specific selection methods. Compensation and benefit schemes are designed according to different cultural settings. Compensation systems in universalistic cultures are based on formal, objective and systematic in relation to the value of a job within the organization. High power distance and fatalistic cultures have low performance reward contingencies.

Uncertainty avoidance cultures prefer skilled based reward systems (Dickmann, 2008). Low uncertainty avoidance cultures focus on individual performance based pay. Individualistic societies put a lot of emphasis on personal achievement in performance appraisal.

On the other hand, collectivist cultures concentrate on group based achievements. Issues discussed during the performance appraisal vary according to different cultures. For instance, individualistic cultures concentrate on discussing employee’s potential for future promotion based on task performance. Collectivist societies focus mostly on seniority based promotion decisions (Dowling, 2008).

Cultural variations have great influence on training and development. Fatalistic cultures don not recognize the importance of training and development. High power distance cultures employ senior managers instead of external trainers as instructors in order to ensure a high level of credibility and trust.

Comparative human resource management provides, managers working in multinational corporations with guidelines on how to design and implement an effective human resource management system in different cultural contexts.

Criticism of comparative human resource management is seen in the debate on localization versus standardization and in the process of transferring human resource management policies across countries (Briscoe & Schuler, 2008). Comparative cross cultural research is faced with a lot of methodological problems, which limit the researchers in making valid conclusions.

Dimensional approaches of culture on human resource management may have a weakness if culture is not measured directly. If cultural scores are disrupted, the analysis using these scores may also be disrupted making the conclusions suspicious. The issue of culture in comparative human management may also be affected by the original cultural models (Harzing, 2004).

Human resource management is a very important subject in the portfolio of management activities. International human resource management and comparative management have developed in the process of globalization. Managing international HRM explores the critical elements of effectiveness for HR on global (Tayeb, 2005).

There are several key issues and theories developed in the context of international human resource management and comparative human resource management. International human resource management explores the way in which international companies manage their human resources across different regions and countries across the globe.

It also explores how multinational corporations ensure that organizations use cost effective approach in managing people in all countries across the globe. In all the multinational corporations and international organizations, human resource management plays a vital role in enhancing success (Scullion, 2006).

On the other hand, comparative human resource management explores the differences of human resource management in various areas, regions, and countries in the world. Countries have different language groups, different labor markets, education systems and employment laws. This makes human resource management vary from country to country.

Cultural differences between regions and nations are a major factor in the increasing internationalization of employment. The knowledge of cultural differences is a significant part of an international manager’s brief. The human resource activities such as selection, recruitment, training and development, reward and performance appraisal among others are greatly affected by cultural values and practices.

Great care should be taken in considering whether to adopt standardized human resource policies and practices throughout in the whole world. Finally, international human resource management and comparative human resource management are major concerns of multinational corporations and even medium companies across the globe (Harzing, 2004).

Adler, N., 2000. Strategic human resource management. Human resource management in international comparison , 237-238.

Begin, J., 2002. Comparative HRM. International journal of human resource management , 376-377.

Brewster, C., 2002. Strategic human resource management. Management international review , 45-46.

Briscoe, D., & Schuler, R., 2008. International human resource management. Chicago: Taylor & Francis.

Budwar, P., 2005. Rethinking comparative and cross national human resource. The international journal of human resource management , 497-498.

Clark, T., 2000. Researching comparative and international human resource management. International studies of management and organizations , 20-21.

Dickmann, M., 2008. International human resource management. New York: Taylor & Francis.

Dowling, P., 2008. International human resource management:managing people in a multinational context. Cengage Learning EMEA: Chicago.

Guest, D., 2007. Human resource management and performance. International journal of human resource management , 263-264.

Harzing, A., 2004. International human resource management. New York: SAGE.

Scullion, H., 2006. Global staffing. California: Routledge.

Sisson, K., 2003. In search of HRM. British journal of industrial relations , 201-202.

Sparrow, P., 2004. Globalizing human resource management. California: Routledge.

Tayeb, M., 2005. International human resource management: a multinational company perspective. London: Oxford University Press.

Wood, S., 2003. The four pillars of HRM. Human resource management journal , 49-50.

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The Importance of the Subject

In asking if International Human Resource Management (IHRM) is important, the question actually is one of degree. The subject itself clearly must impact on all societies and nations concerned with its application; it goes to the livelihoods of the citizens involved and the foundations of the well-being of each nation’s commerce. The real question to be addressed, then, is how substantial  IHRM is as an element of global interactions, along with an inherently necessary examination of the factors that contribute to its import. For our purposes here, the United States serves as an excellent model, as one of the most significantly active and influential industry leaders in the world. Moreover, the differing cultural factors between the U.S. and other nations should provide additional insights.

Methodology

In seeking to answer this sizable question,  it will be valuable to look back upon the evolution of this particular field, both in assessing obstacles overcome in the past and in projecting potential dilemmas to come. Then, a variety of current documentations on real applications of human resource activity from the United States on a world-wide level is essential; no real importance can be attached to the subject without a valid sense of how it is genuinely at play in the world today. Also, as multicultural considerations are very much the at the heart of successful IHRM, examining the varied elements of such considerations, both past and present, can serve to illustrate better the subject’s import in perhaps less expected areas, as well as to identify possible issues forthcoming.

Investigating International Human Resource Management

In a very real sense, IHRM has been in operation since the first company ever staked an industrial claim in any foreign territory. The work itself may have gone by other names and been applied in only the most primitive fashions but, successful or not, it was happening. Not unexpectedly, the United States was in the forefront of industrial expansion.

It must be initially understood that IHRM as an actual object of study and recognized component in business is a relatively new field. “Although the coining and spreading of the term  (IHRM)  took place only in the late 1980’s and early 1990’s, the history…arguably covers a time span of some thirty years” (Stahl, Bjorkman 1). It was, as noted, occurring in the past, but had not yet evolved to a state wherein its potential was recognized or yet developed.

An outstanding model for a look at the genesis of IHRM as undertaken by the United States in early days would be the Coca-Cola company. This monolithic corporation, originally and still based in the U.S., was among the first to take advantage of the business expansion opportunities afforded by World War II. Simply put, American soldiers wanted Coke, it was desirable for the company to maintain its visibly patriotic stance and supply it, and the easiest way to do so was to open plants in other nations. In so doing, Coke sensibly strategized a further and enormous advantage; the brand would be embraced worldwide and their overseas operations would thrive long after the war’s end, as they have. “Coca-Cola and its subsidiaries employ nearly 30,000 people worldwide…in nearly 200 countries around the world” (Tuleja, O’Rourke IV 91). So it can be seen that, long before communication giants like Microsoft made technology an association in the public mind with international business, the American soft-drink empire was leading the charge.

Clearly, multicultural issues unforeseen and/or seemingly insoluble presented themselves with the first corporate plants opening on foreign soil. Setting aside both the iconic “all-American” aspect of the company and the additional, potentially conflicting issues inherent in the wartime scenario, Coca-Cola had to confront the same problems at the heart of IHRM today. Somehow, work forces with vastly different cultural backgrounds had to be integrated in as seamless a way as possible.

The primary function of HR, no matter where it is conducted, is to facilitate the best possible working environment for the good of the company and the workers. This is evidently subject, then, to standards and expectations of what is desirable. On a known ground, such as the native country, these are relatively obvious commodities. An American Coca-Cola bottling plant in Italy, however, must both confront and successfully integrate the societal standards operating there. Acceptable durations of work shifts, benefits, health plans and compensation issues immediately come to mind as most pivotal, yet even the factor of personal behavior at the workplace is largely dictated by culture. Coca-Cola, in the mid-twentieth century, had to find the means to blend all of this into their American model of a successful enterprise.

As simply stated, “Cultural differences are often hidden and are certainly the most difficult to quantify” (Rugman, Brewer 504). This, Coke learned. A wholly unfamiliar and mystifying array of issues presented themselves, and not immediately. Italian employees would seem to be agreeable when placed under the management of a supervisor, but the company would not understand for some time that the disturbing lack of initiative, or even productivity, from these employees was due to a cultural bias: the manager in question was younger than themselves and this bred an innate and culturally-fueled mistrust.

Moreover, the company was forced to realize that a true integration of the disparate cultures was essential, and had to be one with no conspicuous condescension evinced on the part of the employer. The era was different and American chauvinism more overt; it was not unnatural for the American management to, albeit unintentionally, exhibit attitudes offensive to their Italian labor force. Everything was a learning process for the company. Fortunately, Coca-Cola was a fast learner: even in those early days, “…as far as possible, (Coca-Cola) tries to staff its (international) operations with local personnel. The belief held by the company is that local people are better equipped to do business at their home locations” (Aswathappa 575). In short order Coke learned as well that this policy was just as efficacious, if not more so, when applied to management in their overseas plants.

As stated, however, the IHRM issues facing a company like Coca-Cola in the 1940’s are still very much present in today’s international markets. As the leading super-power, the United States is both best placed to resolve these issues and obligated to set a standard in IHRM policies for other nations. Also as stated, these issues cover an immense rage. In examining several key ones, the irrefutable import of IHRM becomes more evident.

Compensation may be the most readily identifiable factor, as regards multicultural business activity. It is certainly universal; no business anywhere functions without providing payment to its people that is, even at its most minimal extent, acceptable to them. In this arena of IHRM, international differences in standards of living and subsequent wage expectations are crucial components, and subject to exploitation.

Industry in the United States enjoys an unchallenged reputation as that of applying the highest standards in compensation. The necessary comparison elevating these standards is of course with how industries in other nations compensate their workers, which both depends upon and directly affects governmental regulations in regard to the same. The reality, nonetheless, is both simple and extreme: other countries, by and large, do not pay their workers as the U.S. does. How, then, is the U.S. company opening branches overseas to determine the best course?

The obvious solution, and one embraced by many globally expanding American industries, is to do some IHRM homework first. “When a company globalizes, it appears advisable to examine the prevailing cultural values and to at least attempt to tailor the compensation package to it” (Gannon 224). This strategy, however, is more precarious than it may first appear. Considerations beyond the company’s own concerns must come into play, for any substantial new business in a foreign city is going to have a strong impact on the economic life of that city, both in regard to the employment now offered and the wages now in the hands of its citizens.

Company A, for instance, may decide to pay their employees in New Delhi a wage unprecedented in that city because Company A believes that U.S. compensation standards should apply wherever this U.S. firm operates. These laudable intentions, however, may severely disrupt the economic culture so enabled. Company A is not taking into account that, in New Delhi, earnings are synonymous with a caste system still very much in operation, and the increased compensation is causing drastic rifts within the social fabric of the city. “Social factors, such as the extent to which pay differences are considered acceptable, the appreciation of different forms of pay…also affect international business compensation systems…” (Sims 93). The United States company venturing into international trade must recognize its responsibilities in this arena. Its HR department faces a responsibility from which it is free at home; that of learning and understanding how compensation is both allotted and, perhaps more importantly, used and perceived within the new culture.

As complex as the issues surrounding IHRM and compensation are, so too do a variety of other cultural factors inevitably present challenges. In United States business overseas, the issue of work ethic as perceived by the foreign culture is particularly of import. Generally speaking, the American work ethic as traditionally held is vastly removed from that of most other nations. “Americans have not only worked more than other peoples, but they have found satisfaction in and identified themselves in their work more than others have” (Huntington 72). This deeply ingrained belief system is integral to American society. It is also usually at variance with how other cultures feel about the work they do: “Europeans work fewer hours, take more holidays, enjoy a greater variety of benefits than is the case anywhere else in the world, and are more inclined to work to live rather than to live to work” (McCormick 141).

With vast numbers of American businesses with European branches in operation, this single and fundamental cultural disparity demands an equally potent IHRM response, and one that must be adapted to the work ethic of each relevant nation. It is not merely desirable from a business standpoint, as Coca-Cola realized some time ago, to staff the overseas enterprise with indigenous workers; it is necessary. Strictly speaking, it is unrealistic in any way to attempt to employ only Americans in global extensions of a U.S. industry, and even in management spheres alone. Modern American business expansion is such that, the localities apart from the consideration, the volume of employees needed surpasses what each industry could possibly glean from the United States population.

Here again is the importance of IHRM strikingly evident. This is not a department within a company that serves merely to orchestrate pay, maintain employee paperwork and files, and deal with hiring and termination matters. IHRM, in this arena, must recognize how this new type of employee in the foreign country has an appreciably different viewpoint in regard to his work, and that American standards of what are expected output levels do not apply. Because of this, IHRM is far more obligated to work in concert with other management departments than it would be in an isolated, U.S. setting. The workforce anywhere is essential to the company’s success, but fundamental differences in how that workforce performs, which must be the result of global expansion, add greater weight to the IHRM role.

Plainly stated, “…The conduct of business is increasingly international in scope and managing human resources is critical to the successful conduct of global business” (Briscoe, Schuler 2). The research clearly indicates that IHRM is a field and a study growing exponentially and, in the course of the growth, expanding its own parameters through necessity.

That IHRM is important is not, as was noted in the beginning, a matter of debate. Rather, it is the degree to which IHRM is important that the research has sought to identify, and this degree is evidently a substantial one. It is common knowledge that the major United States business of today that is not in some way a global enterprise is one not fated to survive long; the mere fact of industrial global expansion creates this circumstance, in fact, because the competitive field becomes subsequently far larger. Global expansion translate to larger numbers, and larger number mean a greater command of whatever market is the target.

The United States occupies a singular position in all of this. On the one hand, its sheer power and volume of industry on a large scale renders it the most active participant in worldwide expansion. Then, the relative youth of the nation in relation with the countries in which it establishes its businesses gives rise to complex and different issues born from cultural disparities and nationally intrinsic modes of behavior. This in view, the research clearly points to an enormous level of import in IHRM as practiced from United States bases.

Had I been in any way dismissive of the role IHRM plays in global business, the research I did would have most effectively given me a new viewpoint. The challenges faced by United States industry are not things we typically consider, which is of course related to those very challenges by virtue of a shared “Americanism”. As a people we are accustomed to taking certain precepts for granted as being either the only ones worth maintaining, or as worldwide beliefs. Enormous differences in cultural attitudes, ranging from compensation to how even the work day is perceived, are factors no one investigating IHRM can ignore.

It may well be that, as time passes and business becomes more thoroughly global in nature, IHRM will be seen as the truly critical element in industrial success it is. More study is given to the subject all the time, as manifestations of its impact become more keenly known in today’s world. With more attention devoted to this branch of business which oversees what is essentially the human factor in industry, a better uniting of otherwise conflicted cultures may be  another benefit. As people are divided by cultural backgrounds, they nonetheless unite in work. Consequently, the real import of IHRM may be only just beginning to make its presence felt.

Works Cited  

Aswathappa, K. International Business. New Delhi, India: Tata McGraw-Hill, 2008. Print.

Briscoe, D.R., and Schuler, R.S. International Human Resource Management: Policy and Practice  for the Global Enterprise . New York, NY: Routledge, 2004.

Gannon, M.J. Paradoxes of Culture and Globalization. Thousand Oaks, CA: Sage Publications, Inc., 2008. Print.

Huntington, S. P. Who Are We?: The Challenges to America’s National Identity. New York, NY: Simon and Schuster, 2004. Print.

McCormick, J. Europeanism. New York, NY: Oxford University Press, Inc., 2010. Print.

Rugman, A.M., and Brewer, T.L. The Oxford Handbook of International Business. New York,    NY: Oxford University Press, 2001.

Sims, R.R. Human Resource Management: Contemporary Issues, Challenges, and Opportunities. New York, NY: Information Age Publishing, Inc., 2007. Print.

Stahl, G. K., and Bjorkman, I.  Handbook of Research in International Human Resource Management. Northampton, MA: Edward Elgar Publishing, Inc., 2006. Print.

Tuleja, E.A., and O’Rourke IV, J.S. Intercultural Communication for Business. Mason, OH: South-Western Cengage Learning, 2008. Print.

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Essay on International Human Resource Management

• Compare and contrast the role of HRM departments in your country and one other you know about, critically appraising the impact on firm competitiveness.

Canada and the US are neighbouring countries, and both adopt similar and also different human resource practices. Canada is more progressive in its human resource policies than the US. For instance, work/life balance has been an issue in the US for years, whereby employees report high instances of burnout. However, the issue has been increasingly common in Canada, but approximately 7 of 10 Canadians report they can balance their life and work well. Unlike the US, at-will employment is not practiced by Canadian employers (Skrzypinski, 2018). Employers in the US can terminate any employees without reason and warning as long as that decision does not compromise factors protected by law such as race, gender, or age. On the contrary, employment in Canada is governed by agreements that grant employees right concerning termination. Nearly 90% of the workforce in Canada is monitored by provincial governments. Employment and labour matters are regulated by each province in their own ways. The other 10% is regulated by the federal government. There is no National Labor Relations Board in Canada overseeing the country’s unionized workforce, unlike in the US.

In the US, maternity leave changes by state and periods are shorted than provided in Canada. Canadian employees are entitled to up to one year of maternity leave for the mother or the father. Canada offers competitive pay whereby there is lower variation between the top and bottom levels. In the US, low to mid-management receive a lower pay as opposed to high management level where compensation is quite higher. Both countries support labour unions where workers can form trade unions to further their interests (Skrzypinski, 2018). In Canada, trade unions are regulated by provincial and federal legislation, whereas in the US, they are managed by National Labor Relations Board.

• How useful is the concept of `dominance’ effects? Explain.

In the debate concerning standardization versus localization, the standardization concept has been primarily understood as standardization of multinational corporations’ management practices around practices adopted by the head office and thus regularly replicate the particular patterns of the head office home country. However, subsidiaries can also adopt management practices based on the best practices established by a country, a practice generally known as the dominance effect. Countries may be given the dominant status due to their robust economic performance, such as Germany, Japan, and the US since they are seen as role models in developing global best practices. Thus, the dominance effect is helpful to countries that possess the status as they act as the controlling parties (Pudelko & Harzing, 2007). For instance, the US has the dominant status and can therefore influence global practices and trends. If a country’s practices are standards, it becomes easier for others to implement practices in foreign countries and may not face significant challenges compared to other companies.

With increased competition globally, the need for best practice knowledge has increased. As a result, this gives power to countries that have dominance status, in this case, the US. The dominance status has rotated between Japan, Germany, and the US in the past 50-60 years. When each nation held the dominant status, management styles and HRM shifts were noticed (Sebastian Reiche, Harzing, & Tenzer, 2018). Currently, the US holds the dominant status and can develop influential practices globally. However, the dominance effect has its drawbacks since it assumes the existence of marked differences in economic growth among developed economies. Thus, for the dominating country, the dominance effect is intensely fundamental, but other nations should understand that the divergence may not be that significant.

• What are the top ranked factors contributing to acquisition success according to well-known surveys and reports?

Surveys and reports identify retention of key talents as the top contributing factor to a successful acquisition. 76% of responding companies outstanding talents since competent individuals are essential in making informed business decisions. Besides, the pooling of ideas and efforts from the best talents are fundamental in project success. Key talents can work effectively as teams and stay committed as well as handling tasks professionally to meet organizational goals. 71% of firms believe effective communication is also fundamental. Ensuring open communication enhances effectiveness and ensures the team can acquire appropriate information and seek clarity whenever the need arises (Sebastian Reiche et al., 2018). Besides, information supports the decision-making process by ensuring the team has adequate information. Executive retention has been identified by 67% by surveys and reports. Acquiring companies need to retain executives since they need their intellectual capital. Such executives have already established relationships with various stakeholders like suppliers and customers, which is required to continue operating effectively.

About 51% of responding firms identified cultural integration among key factors in acquisition success. Culture has a vital impact on leadership styles and overall decision-making. Conventional wisdom infers that 50-70% of acquisitions do not deliver enhanced value to shareholders, and among the unsuccessful acquisitions, 85% fail because of cultural issues. For successful acquisitions, companies should understand the fundamental concept of cultural integration. Addressing cultural integration proactively helps companies attain their vision and join other 50% of firms that have managed to deliver the expected shareholder value supported by cultural integration. Other notable factors include developing a proper risk management plan to ensure risks are mitigated whenever they arise or an existing course of action is already in place. Furthermore, comprehensive planning is a key factor for acquisition success as it helps firms comprehend everything from start to end.

• Why is it important for MNCs to develop compensation and benefits policies that result in fair processes and outcomes?

Human resource managers in multinational corporations participate in almost every process of pay-related decisions. They focus on primary areas such as managing highly sophisticated and turbulent local details whereas developing and maintaining an integrated, strategic pattern of compensation values, practices, and policies. For multinational corporations to manage compensation and benefits in foreign countries, they need to successfully understand local taxation laws, employment practices and regulations, environmental laws, and customs (Sebastian Reiche et al., 2018). Besides, understanding economic variables such as the effects of inflation and currency fluctuations on compensation is vital, as well as shifting patterns in social, economic, and political conditions. When establishing international compensation policies, MNCs strive to meet various goals like consistency with overall organizational policies and aims to attract and retain personnel. Compensation policies should thus be competitive to attain different organizational benefits.

The modern business world is highly competitive, and MNCs need to develop a compensation package that seeks to retain the best talents globally. Smart employers recognize the benefits of keeping quality employees through well-structured compensation and benefits packages. Usually, compensation entails commission structures, bonuses, salaries, and wages. Besides attracting the best talents, compensation policies that ensure fair processes and outcomes enhance employee motivation. Such policies show that MNCs value their personnel which boosts their morale and, in turn, productivity and profitability. When employees are compensated well, their loyalty to the company also increases, implying firms do not need to spend funds and time hiring new employees. Low turnover rates and employee retention are essential for employers to develop an effective and well-motivated team. Right compensation policies enhance job satisfaction since firms invest in the employees’ work, and in response, employees work towards the attainment of organizational goals since their efforts would be rewarded. Furthermore, the right compensation policies ensure adherence to the host country’s employment regulations which minimizes conflicts with the regulatory framework.

Pudelko, M., & Harzing, A. W. (2007). Country‐of‐origin, localization, or dominance effect? An empirical investigation of HRM practices in foreign subsidiaries.  Human Resource Management: Published in Cooperation with the School of Business Administration, The University of Michigan and in alliance with the Society of Human Resources Management ,  46 (4), 535-559.

Sebastian Reiche, B., Harzing, A. W., & Tenzer, H. (2018). International Human Resource Management.

Skrzypinski, C. (2018).  5 Ways HR in Canada Is Different . SHRM. Retrieved 24 June 2021, from  https://www.shrm.org/hr-today/news/hr-magazine/0618/pages/5-ways-hr-in-canada-is-different.aspx .

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International Human Resource Management

“International Framework Agreements are more effective at engaging with trade unions than Corporate Social Responsibility (CSR) Codes of Practice.” Critically evaluate and discuss this statement.

Introduction

Two essential strategies that multinational corporations (MNCs) can employ to control the social and environmental repercussions of their activities are corporate social responsibility (CSR) and international framework agreements (IFAs). CSR codes of practice are voluntary programmes that motivate MNCs to accept accountability for their effects on the environment and society. IFAs, on the other hand, are contracts between MNCs and labour organisations that outline the fundamentals and requirements for human rights, social and environmental standards, and labour rights (Li  et al ., 2019).

I have examined the usefulness of corporate social responsibility (CSR) codes of practice and international framework agreements (IFAs) in this essay’s discussion of how to interact with labour unions. IFAs are more effective than CSR Rules of Practice in engaging with labour unions, according to my main claim based on the research study (Gold  et al ., 2020).

IFAs give MNCs and trade unions a platform for social dialogue, allowing the parties to bargain and reach social policies and labour standards. IFAs also offer a platform for monitoring and enforcing labour laws because they have systems for reporting, keeping track of, and resolving disputes. Research has demonstrated that IFAs can be a valuable tool for enhancing working conditions, fostering social interaction, and boosting union membership.

Yet, CSR Codes of Practice are frequently accused of needing more enforcement and accountability procedures and instead rely on voluntary activities. Despite the fact that MNCs’ adherence to CSR Codes of Practice might be seen as an indication of their dedication to ethical business practises, these guidelines might not be enough to encourage MNCs to follow labour laws or cooperate with unions. The institutional context in which CSR Codes of Practice are applied determines their effectiveness as well, and countries with robust legal systems and high levels of enforcement may find that their use is less effective.

In light of the fact that IFAs offer a more robust framework for social dialogue, monitoring, and the enforcement of labour norms, they are more effective in interacting with trade unions than CSR Codes of Practice.

Effectiveness of IFAs in Engaging with Trade Unions

International Framework Agreements (IFAs) are agreements between multinational corporations (MNCs) and trade unions that specify the fundamentals and requirements for human rights, labour rights, and social and environmental standards. IFAs’ primary goals are to enhance working conditions and advance social dialogue between MNCs and unions. The success of IFAs in interacting with trade unions is influenced by a number of variables, such as the willingness of MNCs to interact with trade unions, the legal system in the nation where the IFA is implemented, and the participation of local trade unions in the negotiation and implementation of the IFA.

The usefulness of IFAs in interacting with unions has been investigated in a number of researches. According to a study, IFAs can be a valuable method for interacting with trade unions, especially in nations where labour laws are lax or ineffectively implemented. The study discovered that IFAs could support social dialogue between MNCs and trade unions and aid in improving working conditions. The study also discovered that the IFA’s success depends on the local trade unions’ participation in its negotiation and implementation.

Similarly, a study examined the effectiveness of IFAs in improving working conditions in the Indian garment industry. The study found that IFAs can be an effective mechanism for improving working conditions, particularly in sectors where labour standards are weak or poorly enforced. The study also found that the involvement of local trade unions in negotiating and implementing the IFA is critical for its success. However, the study also identified several challenges, including the reluctance of some MNCs to engage with trade unions and the weak legal framework in India for enforcing labour standards.

Under the prism of institutional theory, the efficiency of IFAs in interacting with unions can also be examined. According to an institutional theory, organizations are shaped by the norms, values, and rules of their institutional environment. The standards and norms of the global society, which place a high emphasis on labour rights and social and environmental standards, have an impact on MNCs in the context of IFAs. MNCs can strengthen their credibility and reputation by announcing their adherence to these standards and principles by signing IFAs.

IFAs’ ability to interact with unions, meanwhile, also depends on the institutional setting in which they are used. Institutions can either be heterodox or isomorphic. Organizations are supposed to adhere to a set of norms and procedures uniform in isomorphic institutions, which are characterised by a high level of homogeneity. While organisations have more liberty to adopt various norms and procedures in heterodox institutions, they are distinguished by a high level of diversity.

The institutional backdrop in the context of IFAs can influence how well the agreements work to engage with unions. IFAs may need to be more successful in enhancing working conditions in nations with isomorphic institutional settings where labour laws are strictly upheld and implemented. This is because MNCs are already required to adhere to labour laws in these nations. IFAs may be more successful in enhancing working conditions in nations with heterodox institutional environments where labour rules are lax or ineffectively implemented since they give trade unions a forum to interact with MNCs about workers’ rights and working conditions.

In numerous nations, IFAs have successfully improved working conditions. For instance, the International Framework Agreement (IFA) between the International Transport Workers’ Federation (ITF) and the French oil company Total was signed in 2014. It resulted in the implementation of a number of measures to enhance working conditions and safety standards for personnel on the company’s offshore platforms (ITF, 2014). Similar to this, the International Framework Agreement (IFA) that H&M and IndustriALL Global Union signed in 2014 resulted in the creation of a worldwide framework agreement covering topics including freedom of association, collective bargaining, and health and safety (IndustriALL, 2014).

Therefore, the success of IFAs in interacting with unions depends on a number of variables, including the willingness of MNCs to interact with unions, the legal environment in the nation where the IFA is implemented, and the participation of local trade unions in the IFA’s drafting and implementation. Especially in nations where labour laws are lax or poorly implemented, studies have shown that IFAs can be a valuable tool for enhancing working conditions and encouraging social interaction between MNCs and trade unions (Hennebert  et al ., 2023).

Factors affecting the effectiveness of International Framework Agreements (IFAs) in engaging with Trade Unions

International Framework Agreements (IFAs) are voluntarily signed agreements between multinational companies (MNCs) and global union federations (GUFs) with the objective of enhancing labour standards and working conditions throughout the MNC’s worldwide supply chain. The efficiency of IFAs in interacting with unions depends on a number of variables, such as the degree of commitment from both parties, the nature and details of the agreement, and any outside forces that might affect how the agreement is carried out.

• Commitment from both parties

The level of dedication from both MNCs and GUFs is a significant factor in whether IFAs are successful in working with labour unions. The agreement is not likely effective if one or both parties do not genuinely want to raise labour standards and working conditions. As a result, it’s critical that both parties agree on the goals of the contract and the significance of working together to attain those goals.

• Scope and content of the agreement

The efficiency of IFAs depends heavily on the scope and content of the agreement. A wide range of topics, including fundamental labour rights, health and safety, pay and benefits, and social discussion, should be covered under the agreement. The greater the agreement’s scope, the more probable it is to improve working conditions and worker rights. The agreement should also include quantifiable goals and deadlines for tracking and evaluating progress (Marassi, S, 2020).

• Implementation and monitoring mechanisms

The agreement’s implementation and oversight procedures are significant determinants of how effective the agreement will be. IFAs should have well-defined processes for notifying authorities about labour law infractions and dealing with them, as well as impartial and effective grievance procedures. In order to make sure the agreement is carried out successfully and to highlight areas for improvement, regular monitoring and assessment should also be done (Zimmer, R, 2020).

• External factors

Local rules and regulations, political stability, and economic conditions are just a few examples of outside variables that have an impact on how well IFAs interact with labour unions. For instance, the agreement’s implementation might be more difficult in nations with lax labour regulations. In a similar vein, the implementation of the agreement may need to be improved or improved in nations with fragile political or economic climates. As a result, it’s critical to consider these outside variables and collaborate with local players, such as governments and civil society organisations, to handle any issues that might occur.

• Capacity of trade unions

(Cotton, E, 2019) Another critical element is the ability of trade unions to interact with IFAs. The tools and knowledge trade unions need to negotiate and implement the agreement successfully should be available to them. To make sure that the agreement is carried out and enforced at the local level, they need also to have a significant presence and influence in the nations where the MNC conducts business.

Therefore, it is crucial to make sure that these variables are thoroughly reviewed and handled during the negotiation and implementation of IFAs in order to enhance their efficacy.

Effectiveness of CSR Codes of Practice in Engaging with Trade Unions

Corporate Social Responsibility (CSR) Codes of Practice are voluntary programmes to promote ethical business conduct, including respect for human rights, social and environmental norms, and labour laws. CSR Codes of Practice, which define the standards and principles for ethical corporate behaviour, are often created by MNCs (Bourguignon  et al.,  2020). The success of CSR Codes of Practice in interacting with unions depends on a number of variables, such as the extent to which the Codes are enforced, the degree of interaction between MNCs and unions, and the accountability mechanisms in place to check compliance with the Codes.

Several studies have looked at the efficiency of CSR Codes of Practice in interacting with labour unions. CSR Codes of Practice can be a helpful tool for interacting with labour unions, according to a study by Utting and Marques (2010), especially if coupled with strong accountability measures. The study concluded that CSR Codes of Practice could support social dialogue between MNCs and trade unions, improve working conditions, and enhance corporate social responsibility. The study also discovered that the success of CSR Codes of Practice depends heavily on the level of involvement between MNCs and trade unions.

Similarly, Taylor and Napier’s study from 2005 looked at the efficiency of CSR Codes of Practice in interacting with trade unions in the South African mining industry. The study discovered that CSR Codes of Practice could be a powerful tool for enhancing working conditions, especially when they are created through a process of social dialogue between MNCs and trade unions. The study also discovered that the willingness of MNCs to cooperate with unions and the degree of trust between the parties is necessary for CSR Codes of Practice to be effective.

Using the prism of institutional theory, it is possible to examine how well CSR Codes of Practice interact with trade unions. The institutional theory asserts that an organization’s culture is moulded by the standards, beliefs, and laws of its institutional setting (Scott, 2008). MNCs are impacted by the standards and ideals of the global community, which place high importance on ethical business practices in the context of CSR Codes of Practice. MNCs can increase their legitimacy and reputation by adopting CSR Codes of Practice, which demonstrate their commitment to these standards and values (Aggarwal  et al. , 2019).

The institutional setting in which CSR Codes of Practice are implemented, meanwhile, also influences how well they work in interacting with unions. Due to the fact that CSR Codes of Practice offer a forum for communication between MNCs and trade unions, they may be more effective in interacting with unions in nations with lax legal systems and low levels of enforcement. CSR Codes of Practice, however, may be less effective in interacting with unions in nations with robust legal systems and high levels of enforcement because MNCs are already required to adhere to labour laws in these nations.

Factors affecting the effectiveness of CSR Codes of Practice in engaging with Trade Unions

Corporate Social Responsibility (CSR) Codes of Practice are voluntary guidelines developed by companies to promote responsible business practices and improve their social and environmental impact. These codes can also play a role in engaging with trade unions, particularly in the context of supply chains. The effectiveness of CSR codes of practice in engaging with trade unions depends on several other factors, including:

• Clarity and specificity of the code

For the CSR code to be effective in interacting with unions, it must be clear and precise. The expectations and requirements that businesses must meet in relation to labour rights, working conditions, and other social and environmental issues should be clearly stated in the code. The code should also outline the steps that businesses must take to ensure compliance and lay out precise instructions for filing complaints or reporting infractions. The code should be written in a simple manner that both workers and labour unions can understand, and it should also be translated into the languages of the nations where the corporation conducts business (Muchlinski, P, 2021).

• Credibility and legitimacy of the code

In order to interact with unions, it’s crucial to consider the CSR code’s legitimacy and reliability. Trade unions, as well as other interested parties, should be included in the development of the code, which should be based on internationally accepted norms and standards such the conventions of the International Labor Organization (ILO). To ensure that the business is adhering to the code’s principles, the code should also be approved by impartial third parties, such as civil society organisations or certification agencies. To guarantee that the code is current and useful, it should be examined and updated on a regular basis (Kassem,  et al.,  2023).

• Access to information and transparency

Access to information and transparency are also important for the effectiveness of CSR standards of practise in working with unions. The company’s supply chain should be thoroughly described in the code, including the locations and working circumstances of its suppliers and subcontractors (Losada-Otálora  et al. , 2021). A company’s performance in upholding the criteria set forth in the code, including any infractions or complaints, should be disclosed in the code. Trade unions should be able to utilise this information to hold the firm responsible for its deeds and should have access to it.

• Communication and consultation

For CSR codes of practice to be effective in working with unions, there must be effective communication and engagement with the unions. To learn about the unions’ interests and concerns and to have their influence on the creation and application of the code, businesses should have regular conversations with them. To aid trade unions in comprehending and successfully implementing the code, businesses should also offer training and capacity building to them (D’Andrea  et al. , 2019).

• Enforcement and sanctions

The effectiveness of CSR codes of practice in engaging with trade unions also depends on the enforcement mechanisms and sanctions in place. The code should specify the consequences for non-compliance and provide for effective grievance mechanisms that allow trade unions and workers to report violations and seek redress. Sanctions should be meaningful and proportionate to the severity of the violation and should include remedies for workers who have been harmed (Kurniawan, et al., 2020).

The clarity and specificity of the code, its credibility and legitimacy, access to information and transparency, communication and consultation with trade unions, and the enforcement mechanisms and sanctions in place are just a few of the variables that influence how well CSR codes of practice engage with trade unions. Businesses are more likely to successfully interact with unions and promote ethical business practices if they give these considerations top priority when developing and putting into practice their CSR codes of practice.

The argument is that when it comes to interacting with trade unions, international framework agreements (IFAs) are more useful than corporate social responsibility (CSR) codes of practice. This is due to the fact that IFAs are legally binding agreements between corporations and trade unions that address a wide variety of concerns and offer enforceable methods, whereas CSR codes are voluntary guidelines that may lack specificity and enforceability. However based on different aspects including clarity, credibility, transparency, communication, and enforcement procedures, both IFAs and CSR codes can help to promote ethical company practices and interact with trade unions.

IFAs (International Framework Agreements) and Corporate Social Responsibility (CSR) Codes of Practice can both be used to engage with trade unions and promote ethical company practices, although it seems that IFAs are more successful at doing so than CSR codes (Torres  et al ., 2021). IFAs are legally binding contracts with enforcement processes that address a wide range of issues, whereas CSR codes are voluntarily agreed-upon standards that might not be as detailed or enforceable. IFAs and CSR codes’ efficacy, however, is dependent on a number of elements, including their clarity, veracity, transparency, communication and enforcement methods. To effectively interact with trade unions and advance ethical business practices, companies should give priority to these elements while developing and implementing their agreements or codes.

The essay contends the fact that IFAs are legally binding contracts that address a variety of concerns and offer enforceable methods makes them more useful. CSR codes, on the other hand, are voluntary standards that could be vague and difficult to enforce. IFAs and CSR codes both rely on elements like clarity, trust, transparency, communication, and enforcement procedures to be effective. For successful engagement with trade unions and promotion of ethical business practices, companies should give priority to these criteria in the creation and implementation of their agreements or codes.

Utting, P. and Marques, J.C., 2010. Introduction: The intellectual crisis of CSR. Corporate social responsibility and regulatory governance: Towards inclusive development?, pp.1-25

Aggarwal, V.S. and Jha, A., 2019. Pressures of CSR in India: an institutional perspective. Journal of Strategy and Management, 12(2), pp.227-242

Bourguignon, R., Garaudel, P. and Porcher, S., 2020. Global framework agreements and trade unions as monitoring agents in transnational corporations. Journal of Business Ethics, 165(3), pp.517-533

Li, C., Meyer, K. and Thein, H.H., 2019, July. Global Framework Agreements as Substantive Commitments to Employment Practices in MNEs. In Academy of Management Proceedings (Vol. 2019, No. 1, p. 17593). Briarcliff Manor, NY 10510: Academy of Management

Gold, M., Preuss, L. and Rees, C., 2020. Moving out of the comfort zone? Trade union revitalisation and corporate social responsibility. Journal of Industrial Relations, 62(1), pp.132-155

Kocher, E., 2021. Transnational Labour Law?“Corporate Social Responsibility” and the Law. Transnational Legal Activism in Global Value Chains, p.187.

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The Concept of International Human Resource Management

Introduction.

Both the national and global corporations are practicing ‘International Human resource Management (IHRM)’ in order to amplify the skills of employees and compare the capabilities of human resources of different countries. The IHRM is an approach that expresses the significance of human resources and imitates international corporate strategies of an explicit organization.

Common concept of human resource management illustrates how to adopt the right man for the right place. Both individual and organizational goals entail this process. This procedure also states all managerial decision-making and practices that directly or indirectly affect personnel of an organization. HR functions facilitate the most effective and efficient utilization of manpower.

Practice of IHRM involves in organizational performance factors, human resource planning, job analysis and work-study, recruitment and selection of HR, career transition, skill training and development, performance appraisal, wage and salary administration, employee benefits and labor relations. Nowadays, IHRM function is a significant part of the group of companies as the increase of multinational and global companies.

This paper focused on culture of multinational and global companies, treatment of culture as a significant inconsistent that sketch the IHRM strategies for multinational companies. This paper will also be integrated with relevant literature review, IHRM culture of India, China and Japan, USA and other western multinational companies and a conclusion.

Research objectives and questions

A brief analysis of recent trend in IHRM culture is the objective of this paper. All of the forces that affected the culture of an organization presented here both of literature and of practice in several countries. Traditional and recent practice of IHRM culture is also plotted here in a comparative form. To meet a common goal of an organization and an individual task of HR is to bring people and organization together. Essential forces that fosters the research objectives are as bellow:

• Policies- Trust, consensus, equity and openness construct HR policies,
• Motivation- Way of promote employees, so, that they could furnish better out put in their workings. In other words, make the working environment welcoming that personnel are enable to work with enthusiasm, efficiency and initiative and also feel winner always;
• Relations- A composition of fair treatment and constructive criticism would be made the working environment friendly and profitable relationship,
• Change agent – Considering the future uncertainties organizations need to welcome modern technologies and categorized the suspicions.
• Quality Consciousness – Success of an organization depends on ensure of the best quality in all aspects of the organization.

Recent trend of IHRM entails proper deployment of employees as resources, fair in rewarded, motivation where necessary and assemble the factors those would be proficient if the organization put into operation their goal as well as the individual.

As the requirement of this paper, a set of research questions has been integrated with the needs to incorporate the research objectives and to raise the questions those enable anyone to be aware of the motto of the paper are as follows:

• What is ‘culture’ and ‘national culture’?
• Why the cultural environment is an important variable moderating domestic and international HRM?
• How does culture influences the formation of international HRM strategies for multinational companies?

Literature review

Literature review part of the paper, describes all of the research questions in a substantial form along with relevant example. A brief description of required topics are apprehended as bellow-

Culture and national culture: To understand human groups and societies culture is an imperative perception. Society of a country diverge one another through out its culture is the concept of national culture. On the other hand, the term culture stated as a complex outline of- assumptions, behaviors, metaphors, myths, stories and creative ideas that undeniably articulate an exacting society’s people. Culture is also taken care of as the heart of a society’s group of people.

Interaction among the people of a society prescribes how would be its organizational culture. For instance, because of the cultural differences both organizational structure and culture of USA and Saudi Arabia diverse from each other. In short, culture is the way that enables an organization transaction in its environment.

Concept of organizational culture describes the understanding and the sharing of the employees in configuration of- norms, attitudes, values and beliefs. A decided culture is cultivated by a set of organizations. In recent decades with the increase of women employees in the corporate world organizational culture has changed rapidly. Transformation of corporate values are enlightened in following tabular form:

Whatever the individuality of an organization- domestic, multinational or global that has to arrange three basic aspects in its structure as the figure given bellow:

• Artifacts: Schein E. (1992), states that first level of organizational culture revealed that a detail form of culture should includes products, services and behavioral aspects of the employees in the organization.
• Espoused values: According to Schein E. (1992), the second level of organizational culture has sketched the ways that done work through others.
• Basic assumptions: Schein E. (1992) defines the third level of organizational culture as- the factors granted by the employees in the form of perception, beliefs, thoughts, and values and feeling those enable them to act.

In organizational culture, there also have significant term- “multiculturalism” for the people who worked together but originated from different background. Anthony, W. P., et al, (2005), argued that factors of multiculturalism include- gender, race, sexual orientation, ethnicity, physical ability, age limit, political correctness grounds the multiculturalism and also of the democracy. Kotter, P. J and associates (1992), studied on organizational culture more than 200 companies. Their group study evaluated that for all categories of there have two level of organizational culture presented in following figure:

Boost and strengthen organizational performance, organizational culture has a vital role in following aspects:

• Play a considerable role on long-term economic performance of an organization,
• It’s also sketch vision of a firm for a long-time and acts as a factor of failure and success,
• Even though a firm has abundant contribution of resources and skilled and efficient employees but apart from corporate culture long-term financial performance is exceptional.
• However, it is hard to change corporate culture emphasized on performance attraction.

For international companies, in 1993, Professor Taylor Cox’s, formulated a model named Cox’s model of six arguments heightens organizational performance though these issues sometimes have faced questions against their policies and procedures. A short description of this model is as below:

• The cost argument: Unless managing multiculturalism there come up anxiety of discrimination, racism, harassment etc rather than job practices and working place turn into uncomfortable. Leave of women and minor go away without any return against an organization’s investment. All of these are source of cost augment. Efficient supervision of multiculturalism could be save those unnecessary expenses and working time.
• The resource acquisition argument: A concept that identifies best working places for women and recruit efficient personnel under multiculturalism. With the support of this perception, an organization could get competitive advantages.
• Marketing argument: Companies that practice both multiculturalism and multinational operation most of time their target market is women and minor groups. These issues have a significant impact on buying goods and services.
• Creativity argument: Level of creativity would be developed through diversity perspective, recent approach of diversity management and not focus on the norms that getaway from the past. Recently a report publish that group of diverse culture are more bright and creative than a homogenous.
• Problem-solving argument: Decision making, problem solving, group potentiality, multidimensional perspective, behavioral awareness, profit evaluation, shared values and critical analysis are the issues that could make available to present different culture aggregately.
• System flexibility argument: System flexibility is the concept that evaluates quick response of an organization to its both internal and external environment. Multicultural model is a system that espouses fluidity rather than determinant and standardization. Enlargement of fluidity amplifies flexibility that is the advantage to react at lower cost when environmental changes occur.

Important cultural variable in domestic and international HRM

India is a country that combines 18 states along with 18 different languages and in case of USA, which has 50 states. Almost 150 million people live in China and their verbal communication needs 85 thousand alphabets to be written. All of these are considered as cultural factor both in home and abroad. For a domestic and multinational organization common and significant variables that moderate international HRM are circumstanced as follow:

• Diversity management: In simple form, managing multicultural in an organization is the concept of diversity management. Different background like- education, society and in case of multinational countries, national working in a common place is the requirement of diversity management. This form of multicultural exercise develops individual creativity, potentiality in decision-making and self-learning capability.

Impact on formation of international HRM strategies for multinational companies

• Organizational performance factors: Three broad forms of factors determine organizational performance. Performance factors are involved in- qualified people, organization, decision, professional development, planning, goal, classify employee efficiency, motivation, evaluation, rewarding, opportunity, both internal and external environmental challenges, strategy formulation.
• Human resource planning (HRP): Attain future organizational objectives HRP is the process that pursue employee development, strategy and business integration and merge management activities.
• Job analysis and work study: An investigating procedure that systematically evaluates skill, duties and responsibilities for a specific job using two methods- job description and job specification.
• Recruitment and selection of HR: A set of sequential steps are needed in choosing employees for predetermined job. Such steps are- filling vacancies from within the organization, filling vacancies from outside the organization along with the strategy- where, whom, how, why and recruitment job placement (RJP).
• Career transition: Orientation, promotion (either merit base or seniority base), demotion, separation (either layoff or termination) are the form of career transition. Among them orientation is the program of introducing employer and selected employees of the organization.
• Skill training and development: Job instruction training, job rotation, apprenticeship, and coaching, lecture and video presentation, vestibule training, role playing and the behavior modeling, simulization and self study and program language are outlined an organization’s skill training and development.
• Performance appraisal: A process to evaluate performance evaluation is the concept of performance appraisal. Under the global competitive market, it ensures the accountability of the employees as well as the employee performance. In this procedure HR department utilize database of the employees and took necessary decisions. For performance, appraisal procedure rating scale and checklist are the most applicable method.
• Wage and salary administration: Determining structure of the wage and salary job ranking, job rotation, factor of compensation and point system are used as traditional techniques. Recent few years factors of wage and salary administration- source of compensation data, pay level, compensation structure, strategic objective, prevailing wages and rate, union power, government constitution, comparable with and equal pay, international compensation and productive cost.
• Employee benefits: Considering three objectives- social, organizational and employee benefit either direct or indirect compensation. Both direct and indirect compensation include- incentive and gain sharing, pay for performance, compensation management, basic wages and salary, security, safety and health, benefit and services.
• Equal employment opportunity: Proscribe discrimination in the structure of race discrimination and harassment, pregnancy discrimination, sexual harassment, national origin discrimination and harassment, age discrimination and harassment, religious discrimination and handicap discrimination in workplace among-male, female, minor and disables. EEOC 2 has developed at the beginning of 20 th century.

In recent times, strategy of IHRM for recent multinational companies is more focused on diversity management and the glass ceiling. EEOC exploits numerous laws in order to rule out discriminatory aspects designate such as the equal pay Act of 1963, civil rights Act 1991, 1964, 1978 (amended), title VII of the civil rights Act, the pregnancy Act of 1978, the ADEA 3 of 1967, the rehabilitation Act of 1973, the Americans with disabilities Act (ADA) of 1990 etc.

• Labor relations: Topical union relation turns into a pessimistic and broader form than before. To adopt strategy view of this aspect managers consider- based on the requirement of employees’ unionized employee-management relationship, evaluate how to keep a union excluding the impact on management and the way of bargaining for both in short dealing with unions of the employees by the authority.
• Total quality management (TQM) and productivity improvement: Strategy of total quality management and productivity improvement involves in- research and development (R & D), high quality and low cost, collaboration, leadership style, motivation, workplace diversity, leadership quality, cultural factors, restructuring the organization, downsizing, mergers and acquisition, joint ventures, globalization, evaluate productivity, modes of productivity development, ability and attitude.
• Ethics, employee rights and employer responsibility: From the view point of IHRM culture, ethics of an employee evaluated through- polygraph tests, personality tests, financial data and medical history testing and drug tests. On the other hand, employee rights are scrutinize, preserve through a set of strategic factors- management philosophy, rigidity of the labor markets and laws, union and employee power and to establish discipline and control structured an organizational culture.

Rights of an employee consist of- privacy, fair treatment, safety and security, collective bargaining power and communication and involvement in the organization. There is several employers’ responsibility against those employee rights. They are- stakeholder concept, ethics, familiar with the laws and practice of human dignity, communicate with employees and provide due process.

Culture at different countries from view of HRM

In the time of free trade and mixed economic system different region of the world’s manner of IHRM, culture diverse from each other because of their national culture. Present this diversity here incorporate IHRM culture of India, China, Japan, USA and the western multinational as bellow:

India: Recent IHRM culture of India is more focused on- managing the entire quality of the organization as required by ISO 9001 & ISO 9004 of 2000, practice of six-sigma, construct the organizational model following Shamrock , Federal and Triple I, accessibility of outsourcing HR, keep and grow existing manpower emphasize on enabling culture building and retention strategy for working out. An important side of Indian society is that they have four classes and treatment of these differs from each other.

China: China is the most populated country of the world and in recent years they try hard and soul utilizes almost all of their people. They produce prices based on the budget of consumer. In case of IHRM culture, their philosophy is to utilize their work force at cheap rate and turn them the biggest consumer market in the world.

Now China is considered as the “future” and at present their market is more attractive than USA, Japan, Western and European Union. Foreign multinational countries interest to invest in china because of their skilled, technological, cheap rate, power distance, uncertainty avoidance, product variety at diverse prices.

Though foreigner has to face language difficulties but get rid of this, there have a lot of opportunity and enrich cultural practice. Inter-personal relationship in workplace dominated through age of their manager, power, education and wealth.

Japan: Japan is famous in their qualities of product worldwide. Employees of the Japan are industrialist, punctual and have potentiality to invent varieties in product innovation. There have a tradition in workplace is that- employees of Japanese organization have the life time guarantee and follow merit base promotion rather than seniority.

USA: Common culture of US multinational companies hinge on four key areas published by Hudson Institutes report in 1987 named as “Workforce Report 2000”. This report pointed that there have several issues that construct and diverse organizational culture.

According to the “Workforce Report 2000” primary policies of US multinational companies are:

• With the world, economic growth arouses economic balance or equilibrium.
• For the service, industries enlarge efforts with the aim of large scale of production.
• Develop the environment that would be friendly for aging workforce and adaptability and flexibility.
• Make the working atmosphere conflict free between work and family especially for the women employees.
• Making the workplace easy and flexible for both the Hispanic American and African American, thus they could be able to have a meaningful involvement in national economy.
• Facilitate adequate training and development program for the employees.

Western multinationals: Labour market of western multinationals is highly expensive. But there have accountability of the employees, prior merit for promotion, transparency in operational activities, strictly follow the labour and commercial laws, total quality management (TQM), exercise six-sigma, fair in employee rights and practice of employer responsibility. A recent significant change in the western multinationals is that they alter their labour markets in China because of their potentiality in technology relocate.

Though there is present diversity in culture in different countries but in practice of IHRM, there are a set of common issues. These issues are articulate in a diverse approach according to the culture of the nation. Diversity of IHRM is illustrated in the paper in brief with necessary diagram. Brief form of IHRM includes concept of IHRM culture, importance variable of IHRM culture and strategic factors of IHRM culture for multinational companies. Practice of IHRM culture in different counties here considers- USA, China, Japan, Western multinational and India. Among them, exclude India and China exercise promotion in seniority base rather than merit.

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Google Company: International Human Resources Management

Google is one of the world’s largest and most renowned corporations. Due to its massive success, Google is under a constant observation as a source of impactful practices and innovative approaches. This paper is focused on the exploration of Google’s human resources practices such as recruitment and selection.

One of the primary features of Google is the corporation’s international structure. To be more precise, tens of offices of Google can be found all around the globe in about forty countries (Google Company, n.d.). In that way, it is possible to image that the workforce of the corporation is highly international. This type of workforce requited a wide range of diverse HR management, recruitment, and selection practices suitable for the different countries and cultures.

In order to attract human resources of the highest quality, the corporation employs a set of practices. In particular, the company’s HR needs are fulfilled with the help of such internal recruitment sources as transfers, internship programs, and promotions (Lombardo, 2015). In addition, Google HR authorities also rely on the external sources of recruitment such as educational institutions where they target the most gifted and promising graduates and job advertisements that can be located on the web page of the company in the section titled Careers (Lombardo, 2015). Two of the latter recruitment strategies can also be recognized as direct and indirect. To be more precise, recruitment by means of the placement of job advertisements on the web page can be referred to as an indirect method whereas locating and contacting the potential job candidates at their educational institutions is recognized as a direct method of recruitment (Lombardo, 2015).

Since the company’s major generic strategy is differentiation, its recruitment approaches are focused on the selection of people whose skills and goals are aligned with the company’s organizational culture and mission (Thompson, 2016). In particular, the selection criteria of Google do not take into consideration the length of the candidates’ work experience. Instead, the most relevant features of the job seekers for Google include creativity, focus on constant improvement, smartness, and intellect (Lombardo, 2015). Apart from the job interviews, the selection practices employed by Google include background checks, workplace testing (mainly used for the positions filled externally), and preliminary screening.

Moreover, Google has a set of practices that help the company hire the best people regardless of the countries and cultures. These practices involve setting a bar very high, finding people individually, offering good reasons for the candidates to seek jobs at Google, establishing hiring committees with multiple competent members (Feloni, 2016).

From the research, it seems that Google applies a set of universal standards for all of its locations. However, since the overall workforce is multicultural, it is possible to assume that Google faces challenges presented by the need to incorporate the diverse offices into a single culture. An alternative course of action would be a strict differentiation between offices and the establishment of a patched culture with adjustments to each location. However, this course of action is not recommended because it would create the internal tension between different branches. Doing this research, I learned that the companies as large and influential as Google serve as the drivers of globalization when they do not differentiate between cultures but unite their peculiarities into a homogenous organizational philosophy that is based on the pursuit of excellence, innovation, and constant improvement.

Feloni, R. (2016). Google’s HR boss explains the company’s 4 rules for hiring the  best employees.  

Google Company. (n.d.). Google locations . Web.

Lombardo, J. (2015). Google’s HRM: Recruitment, selection, retention .

Thompson, A. (2016). Google’s generic strategy & intensive growth strategies.

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• International Human Resource Management
• Human Resource Management

INTERNATIONAL HRM

Institution

Standardization and localization are two common global strategies which multinational enterprises adopt and implement to promote the success of their global operations. The standardization focuses on achieving the highest level of profitability as possible by taking advantage of location and scale economies. Standardization is specifically characterized by little customization ( Shaohui & Wilson, 2013, p. 398 ). Through standardization, multinational enterprises are able to address the pressures of cost reduction, especially when the level of local responsiveness is low. On the other hand, localization focuses on customization as the preferred strategy of increasing the profitability of a multinational enterprise. When the needs of customers vary significantly, multinational enterprises find it necessary to implement the localization strategy in the management of global business operations ( Cogin & Williamson, 2014, p. 702 ). This paper presents a discussion of the issues that are related to the implementation of the standardization and localization strategies by multinational enterprises with a goal of demonstrating how the two strategies manifest themselves in human resource management practices among international companies.

The implementation of global strategies by multinational enterprises is often informed by the interplay between localization and standardization. Most multinational companies are forced to choose between localization and standardization or strike a balance between the two strategies. In doing so, the drivers of two strategies are considered in the implementation of human resource practices within the international business environment ( Gomez & Sanchez, 2005, p. 1848 ).   For instance, multinational enterprises consider their business strategy and structure in order to determine whether or not it is appropriate to standardize their human resource management practices. most companies which operate within the international business climate seek to align their international business strategy with their human resource practices because they understand that their success within the international business environment depends on the input of their human resources, including skills, cultural awareness, innovation and competencies in production and service delivery   ( Pudelko & Harzing, 2008, p. 395 ).

The organizational structures of multinationals also drive the adoption and implantation of a standardized human resource management strategy. Standardization is mainly aimed at supporting efficient organizational structures. The age and level of maturity of multinational enterprises within the international market are other important drivers for the standardization of human resource management practice (Dowling, Festing & Engle, 2013). For example, multinationals which have operated for a long time within the international market and achieved the maturity stage of business growth are more likely to run standardized human resource practices. The standardization of international human resource management practices is an important motivational issue within multinationals because it allows employees across the world to benefit from standardized compensation and benefits systems ( Lertxundi & Landeta, 2012, p. 1788 ).

Corporate culture is an important issue and driver of the standardization strategy among multinationals. The multinational enterprises which standardize their operations and human resource management practices seek to implement a uniform corporate culture. For instance, multinationals which implement the culture of innovation across their international supply chains often standardize their human resource practices. This is aimed at ensuring that all business operations are run on the basis of same values and beliefs ( Pardo-del-Val, Martínez-Fuentes, López-Sánchez & Minguela-Rata, 2014, p. 829 ).

The competing drivers of localization is an important issue that multinationals must consider in the implementation of effective and successful human   resource management practices. The institutional and cultural environment of the host country is among the most important drivers of localization (Mendenhall, et al., 2013). Therefore, a multinational may choose to localize rather than standardize its human resource practices when the institutional and cultural environment of the host country is a direct opposite of that within the home country. In addition, the mode of operation within a specific international market drives the selection of a global strategy ( Parry, Dickmann & Morley, 2008, p. 2025 ). The subsidiary role of a multinational may mandate it to localize its human resource practices so that it would align them with its business partners within the host country. From these illustrations, it is evident that the tradeoffs between localization and standardization are based on the need of a company to survive or remain competitive within its international business environments.

The issues that are related to the implementation of standardization and localization global strategies are effectively addressed when multinational strike a balance between these strategies ( Wocke, Bendixen & Rijamampianina, 2007, p. 830 ). This including addressing the challenges of a global code of conduct regardless of the fact that it is used as the most preferred tools of controlling the behavior of employees within global operations. Furthermore, striking a balance between standardization and localization requires that multinational enterprises determine the strategic importance of international human resource management approaches, such as offshoring and the associated implications on the practice of human resource management ( Pudelko & Harzing, 2007, p. 536 ). The other issues that multinational companies must address include comparing international markets in terms of their appropriateness for the offshoring human resource management approach. Through a comparative approach, multinational enterprises are able to determine the most suitable global strategy for the specific markets which they target in their international expansion.

The competing goal of implementing a global mindset and the need to become responsive to the local business environment is a common challenge for multinational enterprises when they need to select the most appropriate global strategy (Dowling, Festing & Engle, 2013). This means that the conflicting aims of standardization and localization must be addressed by multinational enterprises in order to support sustainable human resource practices across their global supply chains. Standardization is preferred because it promotes consistency and transparency in human resource practices. On the other hand, localization aims at respecting local traditions and culture. Therefore, multinational enterprises are forced to evaluate the comparative benefits of consistency and respect for local traditions in determining the most appropriate global strategy that they need to implement within a specific international market ( Shaohui & Wilson, 2013, p. 402 ).

Standardization also aims at achieving ease of administration through effective and efficient human resource practices within international organizations. However, the competing aims of localization, such as the need to adapt to the policy and regulatory frameworks and institutional requirements within the hosting country must be considered by multinational enterprises ( Jun, Jiang, Li & Aulakh, 2014, p. 708 ). This consideration is important in ensuring that the need for ease of administration and efficient human resource practices does not conflict with policy and legal provisions and institutional requirements of the host country (Mendenhall, et al., 2013).

Standardization is generally an effective global strategy because it creates a sense of equity in human resource management or practices. However, the drivers of localization, such as the human resource practices and educational systems of the host country may affect the extent into which a multinational is able to implement equitable human resource practices ( Festing, 2012, p. 38 ). The educational system of the host country will influence the qualifications of human resources and therefore impact on the aims of standardization, including the creation of a sense of equity in human resource practices. Furthermore, the expectations of employees and workplace practices which characterize the host country are important issues that must be considered by multinational enterprises in order to strike the most appropriate balance between standardization and localization of their human resource management practices ( Jun, Jiang, Li & Aulakh, 2014, p. 707 ).

The level of interaction between the host country’s culture, the home country’s culture and corporate culture is another important issue which influences the adoption of a specific global strategy in human resource management. Multinational enterprises seek to standardize their global human resource practices and strategies through a uniform appraisal system, staffing criteria, development or training programs, corporate code of conduct and staff rotation ( Shaohui & Wilson, 2013, p. 398 ). This forms of standardization are however possible when the three aforementioned cultures interact. This is because when the subsidiary role of a multinational enterprise is not aligned with the culture of its home country, then it is more likely to adopt a localization strategy for its human resource management and practices ( Thite, Budhwar & Wilkinson, 2014, p. 922 ).

The implementation of standardization strategy in the human resource management and practices of multinational enterprises is based on the understanding that the work behavior that employees exhibit is generally determined by culture. For instance, the expectations of employees and their role definition is significantly influenced by their cultural norms ( Lertxundi & Landeta, 2012, p. 1789 ). The superiority of corporate culture over the culture of the host countries of multinationals is an issue of debate. This is because many multinational enterprises implement the localization strategy regardless of the fact that their value for corporate culture is maintained. Therefore, standardization is associated with the implementation of common practices in human resource management but this does not translate to shared values among employees who work in different cultures (Mendenhall, et al., 2013).

The mode of operation of a multinational enterprise is a significant issue to consider because it has a direct impact on human resource management practices. Therefore, the choice of a global strategy between standardization and localization is defined by the mode of operation that a multinational enterprise applies within specific foreign markets (Dowling, Festing & Engle, 2013). The issues of control and ownership vary depending on the mode of operation in international business. For instance, acquisitions often limit the ability of a multinational enterprise to transfer technical expertise and knowledge, systems, management knowhow and human resource practices. In such a mode of entry, localization becomes the most preferred global strategy or the management of human resources ( Welch & Björkman, 2015, p. 303 ).

Multinationals should consider their mode of entry when making decisions on their human resource practices because modes, such as whole owned subsidiaries, create more room for standardization while other modes, such as exportation, limits standardization ( Pudelko & Harzing, 2008, p. 396 ). Furthermore, government support is another issue to consider in the adoption of an international human resource management strategy because some governments support expertise and training and management contracts. It is therefore notable that standardization of international human resource practices depends on the political and legal environment and the receptivity or ability of the local work force to accept and adhere to corporate behavior and norms ( Gomez & Sanchez, 2005, p. 2990 ). Cost considerations are also used to assess the relative appropriateness of standardization versus localization of international human resource practices of a multinational enterprise.

In conclusion, the drivers of the global strategy are important issues in international human resource management because they determine whether a multinational enterprise will adopt and implement the standardization strategy or the localization strategy. Multinational enterprises must address the competing goals of standardization and localization of their international human resource practices so that they would strike a reasonable balance and implement the most effective approach in managing employees across an international supply chain. The goals of standardization which are considered in the choice of an international human resource management strategy include consistency, a sense of equity, transparency, ease of administration, effectiveness and efficiency. However, these goals should be balanced with the motivations of localization, such as the need to respect the local culture, adaptation to legal and policy frameworks of the host country and the alignment of the international human resource practices with the local human resource practices, the education system and the expectations of employees within a specific foreign market.

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