INTERNATIONAL HUMAN RESOURCE MANAGEMENT
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Transcript of INTERNATIONAL HUMAN RESOURCE MANAGEMENT
INTERNATIONAL HUMAN RESOURCE MANAGEMENT: DETERMINING
THE STRATEGIES FOR EFFECTIVE CROSS-CULTURAL TRAINING
RATIONALE OF THE STUDY
The internationalization of human resource management has increased the scope
of traditional HRM. Today, HR practitioners not only manage people from their home
country, but one that involve managing many diverse nationalities, with which the culture
of staff and employees are already well-known or predicted. Companies start business
within their country of origin and staff are hired from within that country. However, with
the arrival of globalization and the shift from industrial to information technology, a new
problem for HR practitioners emerged as employees become more diversified and hard to
manage. Companies expand to other countries, or moreover participate in joint ventures
or mergers and acquisitions. This move has many implications including the limited
choice of hiring employees from the country which the company expanded. Basically,
this gives HR practitioners a new challenge as they are faced with a diverse cross-cultural
workforce that they are not yet familiar with. For instance, a UK or an American
company expanded or having joint ventures in China would have to integrate their own
HR practice in that country. However, the Chinese and Western managers have different
beliefs and practices in terms of managing employees. Thus, a cross-cultural conflict
might arise, which could affect the productivity and culture of the company as a whole,
most especially in the branch they invested in China. Western expatriates might not be
able to adapt with the Chinese way of working or any Asian way of working for that
matter if they don't have proper training or knowledge about them. This gives the HR
team a huge responsibility in making sure that cross-cultural relationship within the
company is going well. An HRM expatriate might have problems having the best local
staff when they do not have enough knowledge about the foreign culture. Furthermore,
productivity might also be affected if their way of human management is not compatible
with the working nature of the local staff.
OBJECTIVES OF THE STUDY
The study will address the following three key objectives:
1. To determine the different cross-cultural training strategies of multinational
companies in the UK that employs expatriates from other countries.
2. To determine the advantages and disadvantages of their cross-cultural
training programmes and determine which approaches are highly
recommendable.
3. To build theories of effective cross-cultural training programmes for
international human resource managers.
CONTRIBUTION OF EXISTING LITERATURES
Human Resource Management
Human resource management (HRM) is known and accepted in the broadest sense of the
term, as a form of management that includes "all management decisions and actions that
affect the nature of the relationship between the organization and the employees – its
human resources" (Beer et al., 1984, p. 1). It is defined as the process of coordinating an
organization's human resources, or employees, to meet organizational goals. As can be
observed based on the definition, the tasks of those belonging in HRM can be complex as
it involves all issues that encompasses employee and firm relationship. Believing that the
most important asset of a business is the people in order to achieve sustained business
success is the core philosophy of human resource management (HRM). Realizing this
leads to a strategic management of people within the organization. Its philosophy is based
on the simple belief that human resources are the most important asset in achieving and
sustaining business success. This realization became the driving force behind the creation
of human resource management resulting in organizations taking a strategic approach to
the management of their people.
Human resource professionals basically deal with such areas as employee recruitment
and selection, performance evaluation, compensation and benefits, professional
development, safety and health, forecasting, and labor relations, as well as management
of diversity, job analysis and job design (Lipiec, 2001).
The Internationalization of HRM
In the current age of global economy, worldwide interdependence of resources, markets
and business competition thrives (Schermerhorn, 2001). The onset of globalisation has
prompted businesses and its leaders to think and act globally to be able to gain
competitive advantage. There are two opposing views: some view globalisation as an
opportunity for limitless growth and prosperity for both developed and developing
countries; while others see it as a threat to further the extent of inequality because of
increased competition and the dominance of market forces seen in multinational
companies (MNCs) (Johnson & Turner, 2003).
The implications of these changes in international business are far-reaching because of
the emphasis on interdependence which prompts a discussion of the different
collaborative arrangements between MNCs. As national boundaries have increasingly
been blurred, it has become imperative that MNCs take advantage of forming
collaborative arrangements or cooperative strategies which are believed to be a
productive method to promote growth. This trend has affected even companies directly
competing with each other as Hitt, Ireland & Hoskisson (2003) has given the example of
FedEx and the US Postal Service (USPS) forming an a seven-year alliance which benefits
both companies.
One of the areas of business organization that is affected by the internationalization of
business is the area of human resource management. Because business has become
internationalized, the process and factors that make up the HRM concept have also
become global. Thus, out of HRM, a new field has been formed – that is International
Human Resource Management or IHRM. The field of IHRM refers to the: "…
understanding, researching, applying and revising all human resource activities in their
internal and external contexts as they impact the process of managing human resources
in enterprises throughout the global environment to enhance the experience of multiple
stakeholders, including investors, customers, employees, partners, suppliers, environment
and society (Briscoe and Schuler, 2004, p,20).
Briscoe and Schuler (2004) explained that there are many forms of IHRM. These are: the
operation of parent-country firms overseas; and the operation of foreign firms in the
home country. The first one involves the situation of working as a parent-country HR
professional in the main or regional headquarters of the traditional multinational
enterprise (MNE). This may involve working as an expatriate HR manager in a foreign
subsidiary of an MNE (Briscoe and Schuler, 2004). Typical headquarters IHRM
responsibilities include selecting and preparing employees for and transferring them
between the various country locations of the firm, determining and administering
compensation and benefit packages for these international assignees, and establishing
HRM policies and practices for the firm's foreign operations (Briscoe and Schuler, 2004).
On the other hand, the second situation involves the HR manager working at home in the
foreign subsidiary of a foreign MNE (Briscoe and Schuler, 2004). The possibilities
include: working for a home-country firm that has been purchased by a foreign firm and
thus is now a foreign-owned firm; and working with a foreign headquarters (and, often,
expatriate managers sent from the foreign - now parent - company) and typically will
involve having to integrate into the local operations - the HR manager's home country - a
philosophy and organizational culture and practices that are different and/or unfamiliar
(Briscoe and Schuler, 2004).
The Need for Cross-Cultural Management
The situations that IHR managers might face involve dealing with different people with
different culture. Managing culture is one of the tasks that an international human
resource manager has to deal with. Culture is defined as a set of beliefs and values widely
shared in a specific society at a particular point in time (McGuire et al, 2002).
Furthermore, culture encompasses a set of fundamental values that distinguishes one
group from another (Hofstede and Bond, 1988) and these values can act as a strong
determinant of managerial ideology that consequently affects both HR practice and
performance (Laurent, 1983).
Culture is basically a combination of shared beliefs, social norms, organizational roles
and values, emphasizing a cross-cultural socio-economic perspective in industrial and
management research (Wang, 1993). One example is that the Eastern style of
management is different from that of the West. The Chinese approach is usually based
from historical leaders and philosophical figures such as Confucius, Sun Tzu, Mencius
and Han Fei (Satow and Wang, 1994), which involves anddepends on the connections, on
circumstances, on the level of affinity (who you know and what family you come from).
Here, there is no consistent legal framework and, even within the regulations that do
exist, the exception is the rule rather than the rare occurrence. On the other hand, the
management in America is objective and driven by data and rational models. Deployment
of statistics and financial modelling is the key in decision-making and strategic planning.
These differences alone can create problems. Chinese employees may not function well
with the Western management style and vice-versa. Thus, foreign expatriates should
obviously be trained, as making themselves familiar with the new culture can help them
create the appropriate management style that will make employees in the country perform
at their best.
Cultural Dimensions
One of the ways to assess culture is to take heed of its value dimensions. As explained by
Hofstede (1980), there are four cultural value dimensions:
Ø Large versus small power distance. Large power distance is the extent to which
the members of a society accept that power in institutions and organisations is
distributed unequally; while small power distance is the extent to which members
of a society or organization accept that power is distributed fairly (Adler, 1997).
Ø Strong versus weak uncertainty avoidance. Strong uncertainty avoidance means
the degree to which the members of a society feel uncomfortable with uncertainty
and ambiguity, which leads them to support beliefs promising certainty and to
maintain institutions protecting conformity; while weak uncertainty avoidance is
the degree to which members tend to be relatively tolerant of uncertainty and
ambiguity and require considerable autonomy and lower structure (Rodriguez,
1995).
Ø Individualism versus collectivism. Individualism is the preference for a loosely
knit social framework in society; collectivism stands for a preference for a tightly
knit social framework.
Ø Masculinity versus femininity. Masculinity is the preference for achievement,
heroism, assertiveness and material success; whilefemininity refers to a preference
for relationships, modesty, caring for the weak and the quality of life.
Related Studies
Sadri and Lees (2001) stated that there are key elements to determine a positive culture.
They are: the development of a corporate vision; the development of corporate values;
valuing and maintaining communications with employees; adaptability; and perpetuation
of the culture through tangible symbols, slogans, stories, or ceremonies that highlight
corporate values. However, these positive characteristics can be easier said than achieved
as the workplace involves different nationalities that do not share the same pattern of
beliefs. An incompatible management approach brought and implemented by foreign
expatriates can result in the development of a negative corporate culture. Expatriates who
have poor performance in their cross-country assignments cost multinational enterprises
(MNE's) billions of dollars, damage firm reputation, disrupt relationships with local
nationals (Harvey, 1996; Welch and Welch, 1994), and often precise a cost on
expatriates' psychological state (Solomon, 1996). Expatriates are proposed to gain
intercultural communication skills and, consequently, intercultural effectiveness through
a cultural learning process.
Fischer and Hartel (2003) conducted a study that tries to determine comparatively how
Thai and Western managers conceptualize intercultural effectiveness and to identify the
extent to which perceptions of socio-biographical characteristics are important to Thai
managers' perceptions of the effectiveness of a Western manager and vice versa. The
qualitative study found that both considered religion, age and gender, nationality as
important; while they have different views on the importance of stereotypes, linguistic
abilities, intercultural abilities and identifying task and contextual performance.
Hutchings (2002) investigated the need for careful selection and in-post support of
expatriates in China and argues that expatriates should be those who possess realistic pre-
departure expectations and cultural awareness and knowledge, and whom are provided
with in-post support, including work-related skill development, mentoring and
consultative groups. Through semi-structure interviews of Australian organizations
in China, the research found that that expatriate selection is very much ad hoc in nature
and that expatriate preparation and cross-cultural adaptability skills need to be improved
in a number of important aspects. Hutchings (2002) suggested that "there is a clear need
for expatriates to be fully briefed prior to being sent on overseas postings and that careful
selection should be balanced with goal-setting, performance expectations, and awareness
of socio-cultural limitations of operating from a business and social perspective in the
host environment" (p.46).
METHODOLOGY
The research design to be used is the descriptive approach. This type of research presents
facts concerning the nature and status of a situation, as it exists at the time of the study
(Creswell, 1994). This also believes that the relationships and practices that exist, beliefs
and processes that are ongoing, effects that are being felt, or trends that are developing.
(Best, 1970) Furthermore, such approach tries to describe present conditions, events or
systems based on the impressions or reactions of the respondents of the research
(Creswell, 1994).
Quantitative approach will be used in collecting data. Quantitative method is compatible
with the study because it allows the research problem to be conducted in a very specific
and set terms (Frankfort-Nachmias and Nachmias, 1992). Besides, a quantitative research
plainly and distinctively specifies both the independent and the dependent variables under
investigation (Matveev, 2002). It also follows resolutely the original set of research goals,
arriving at more objective conclusions, testing hypothesis, determining the issues of
causality and eliminates or minimises subjectivity of judgment (Kealey and Protheroe,
1996). Further, this method allows for longitudinal measures of subsequent performance
of research subjects (Matveev, 2002). Finally, it provides achieving high levels of
reliability of gathered data due to i.e. controlled observations, laboratory experiments,
mass surveys, or other form of research manipulations (Balsley, 1970).
Data Collection
The data for the study will be collected through survey. Survey is the chosen method to
collect data because its function is to generalize results from a sample to a larger
population. (Commonwealth ofLearning, 2000) The primary purpose and advantage of
surveys is generalization of the results (Commonwealth of Learning, 2000). Usually,
surveys are interested in gathering data from many than in obtaining intensive, detailed
information from a few individuals; therefore, it is seldom for a survey to consist of one
or very few individuals (Commonwealth of Learning, 2000). Consequently, in designing
a survey research study, one has to take into consideration the sample and the sampling
procedure: the sample size should be adequate to allow generalization of the results, and
the sampling procedure should also be such that small sub-groups within the population
(such as landless farmers) are properly represented in the sample
(Commonwealth ofLearning, 2000). This is because errors in sampling procedures may
not justify generalization of the results, thus lowering the value of the survey
(Commonwealth of Learning, 2000).
A semi-structured questionnaire will be used to collect data. This survey-questionnaire
will have two sections. The first part will intend to acquire the demographic profile of the
respondents, while the other section will contain a set of attitude statements. The purpose
of the set of attitude statements is to determine the level of agreement or disagreement
using a five-point Likert scale. In the Likert technique, the degree of agreement or
disagreement) is given a numerical value ranging from one to five, thus a total numerical
value can be calculated from all the responses. (Underwood, 2004) The equivalent
weights for the answers will be:
Range Interpretation
4.50 – 5.00 Strongly Disagree
3.50 – 4.00 Disagree
2.50 – 3.49 Uncertain
1.50 – 2.49 Agree
0.00 – 1.49 Strongly Agree
Sampling
The respondents to be surveyed are MNCs in the UK that have joint ventures or direct
investments in Asian countries such as China,Japan, or Southeast Asian nations. Potential
respondents will be first chosen from the DTI list of MNCs, and then emails will be sent
for their approval on the survey. Questionnaires will also be submitted through emails
and will also be returned to the researcher through emails.
The formula suggested by Saunders, Lewis and Thornhill (2003) will be used to
determine the actual sample size required in the study. First, the total population of a
particular online MBA school and a traditional MBA school will be acquired. The
estimated total response rate will be estimated with the formula that was suggested:
Total response rate = Total No. of Responses
Total No. in Sample ineligible
Then, the actual sample size will be calculated with the following formula:
nª = n X 100
Re%
In the formula, nª is the actual sample size required; n is the minimum sample size, and;
re% is the estimated response rate expressed as a percentage.
Systematic sampling will be used to calculate the valid number of respondents needed. A
probability sampling approach was chosen to avoid the bias of non-probability sampling.
Data Analysis
Data will be analyzed through percentage and mean analysis. SPSS software will be used
to compute the data gathered. Determining the mean and percentage on the level of
response of the respondents on the items in the Likert-type questionnaire will statistically
show the relationship between lack of cross-cultural training and learning, and poor
performance of the HRM expatriate.
Potential Limitations
The study is limited only to MNC's headquartered in Europe that has expansions in
mainland China. However, persuading companies to participate in the study may be
difficult because it will involve setting up appointments with the managers of the
company.
Another potential limitation of the study is that respondents may not take the
questionnaires seriously since it is only structured; meaning answer choices are already
provided. So, in order to promote participation among respondents, the study's purpose
will be clearly explained on the survey questionnaire.
TIMEFRAME
5-
April
15-
May 1-June
25-
July 10-Aug 25-Sept 5-Oct 25-Nov
PROPOSAL
INTRODUCTORY
CHAPTER
LITERATURE
REVIEW
RESEARCH
DESIGN
SURVEY-
QUESTIONNAIRE
CONDUCTING
THE SURVEY
CONDUCTING
INTERVIEW
DATA
COLLECTION
PRELIMINARY
ANALYSIS
FINAL ANALYSIS
SUBMISSION OF
PROJECT
Table 1: Timetable
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