Understanding Human Relationships in International Organizations: a IHRM point of view
Elkin and Sharma (2007, p. 396) affirm, “Nothing in life matters more than people and their relationship.” The practice of organisational human relations is a major building block in the context of developing and achieving performance and productivity. Human resource approach is rooted on the basic principle of managing people within and outside organisational context. It starts with the belief that people are the most important organisational resource (Hornsby and Kuratko 2005). This perspective focuses on the organisation-people and people-people relationships. With the progression of internationalisation and the influential effects of the forces of globalisation, most organisations especially those that operate in a global market must come up with effective structures and strategies in order keep track and be aligned in relevance to latest business trends and opportunities. The internationalisation of businesses resulted in the growing application of expatriates to supervise increasing numbers of international operations (Bures and Vloeberghs 2001). On this case, the international HR Manager is faced with the constant challenge of having the needed skills and expertise in people management and labour relations. As paradigms have changed, the principles of International Human Resource Management (IHRM) are shifted in response to the needs of the diversified global workforce. Similarly, the understanding of how multinational enterprises (MNCs) operate is rooted on the idea of international management and IHRM as dimension (De Cieri et al. 2007). Believing that the knowledge of IHRM is highly imperative like any person working in every organisation, this is also tantamount to harmonious and effective management of human relationships. Because IHRM looks on the applicability of people management across geographical borders, international HR Managers and other personnel consider the vital role of business ethics and cultural values to IHRM practice, including how personal values influence ethical choices.
Using the work of Elkin and Sharma (2007), this paper further explicates on the assertion that (w)holistic human relations or the ‘total person’ approach to human relations is an essential, irreplaceable ingredient for effectively appreciating and managing international employees within the global organisational setting. Human relations or the ‘total person’ approach is ruled with the philosophy of business ethics and cultural values. Hence, these two key terms are the core topics of the succeeding discussions, with special attention given on human relationships at the workplace.
International Human Resource Management: a brief overview
Considered as an important dimension of international management that undergoes current developments (De Cieri et al. 2007), International Human Resource Management (IHRM) is generally characterised as management of human resources in international setting. Sims (2002, p. 360) defines IHRM as “the process of procuring, allocating, and effectively utilising human resources in a multinational corporation”. Basically, IHRM employs similar functions and duties of domestic HRM or people management in one country. While domestic HRM manages local (from one country) members of the workforce, IHRM manages a diversity of employees. Aside from the standard functions of HRM, IHRM encompasses more functions such as relocation and orientation of foreign employees, and adaptation to new culture. Schuler (2004) states that IHRM involves changing perspectives, requires more involvement in the employees’ personal lives as influenced by more external forces, and generally involves greater risks than domestic HRM. Sims (2002) also added that IHRM personnel deal with international taxation, relocation, and orientation; offer administrative services for expatriates; are responsible for the selection, training, and appraisal of international and local employees; and manage the host government relations.
IHRM goes beyond the usual HR functions. The current business setting, (i.e. selecting and recruiting potential employees in MNCs for instance), is said to be fundamental in the attainment and accomplishment of organisational goals in the global scene (Boxall and Purcell 2000). The IHRM functions apparently draw the line between an organisation’s endurance and destruction especially in the process of selecting and recruiting people to compose the needed job position. A complete understanding of managing international workforce and development of organisational systems and processes will enable international HR Managers to add value within a larger organisational unit (Sambrook 2000). But then again, such understanding should go beyond the traditional HR functions and emphasis is given on people as fuels and most important resource of every organisation, particularly on the ways they interact and treat each other.
Managing Business Ethics: on fairness and equality
Business ethics is primarily an applied ethics and incorporated on the idea of corporate social responsibility (CSR). It is associated with and influential to the value system of every person in business by serving as a moral guide or “base” (Sweet 2001) to the application of acceptable practices and principles necessary to become moral organisation and/or employee. Consequently, there is no clear moral compass to guide managers and leaders through complex ethical dilemmas requiring the judgment about what is right or wrong aside from the existing personality criteria on what they inherently know. Attention to ethics in the workplace sensitises managers, leaders and employees on how should their responses should be especially on cases of treating employees (Walters and Maher 1997). Business ethical practices and principles are evidently crucial to establish ethical work climate with strong corporate guidelines. These guidelines set the organisational ethical tone and let members of the workforce know that upper management authorities consider ethical behaviours as important part of business operations. Frederick and colleagues (1994) state that ethical guidelines are articulated in the forms of code of conduct, which outline the organisation’s main expectations to every contributing factors. They promote management strategies, accountability structures, organisational policies, incentive systems, training programs, and decision-making processes all working in unity to strengthen the organisation’s fundamental ethical beliefs.
There are numerous ethical dilemmas occurring in the global marketplace. Beauchamp and Bowie (2001) identify the fundamental issues in business ethics in forms of bribery, extortion, facilitation payments, environmental problems, and human right. Ferrell and associates (2002) add sexual and racial discrimination, price discrimination, and harmful products on the growing list of business ethical issues. In the Australian setting, Pedigo and Marshall’s (2004, p. 195) study indicate that cross-cultural dilemmas faced by Australian managers include “bribery, breach of contract, human rights and confidentiality issues”. The presence of these ethical business issues confronts every HR Manager on whether or not they are engage in such kind of activities. For instance, certain occurrences in the global marketplace like stiff and rapid competition heightens the issue of business ethics. Competition pushes some organisations and its subsidiaries to turn toward drastic measures as a desperate attempt to keep up with their rivals. More often than not, this case shows the beginning of cultivating unethical business behaviours like on overworking conditions on employees. For this reason, today’s HR Managers and industry leaders considered the great challenge to create behavioural models and corporate cultures that supports ethical practices while maintaining the profitability of their individual business (Vickers 2005).
Organisational ethics determines what is standard in the workplace. On establishing and maintaining human relationships within the organisation like Elkin and Sharma’s (2007) advocacy, the compliance to organisation’s code of conduct is the fundamental step. Pedigo and Marshall (2004) acknowledge the broadly acknowledged cultural differences in relation to ethical issues and practices and their importance. Although it is always evident that the constructive ethical practices are proliferated within an organisation, the relationship of constructive ethical practice to organisational performance is the constant and palpable execution of what is morally or ethically accepted ways among every individual. Every employee should be empowered to take leadership in ethical decision-making. Employees will follow a strong managers or leader when integrating values and ethics to every decision strategically made in terms of business life. Robbins (1998) believes that this contributes to the effective decision-making processes of the entire organisation. Robbins further asserts that there is no completion on existing discussion of decision-making processes without integrating ethics because ethical considerations is an important criterion in coming up with the most appropriate and comprehensive decisions. Like Elkin and Sharma (2007), Pedigo and Marshall (2004) believe that relationship building and valuing people is a very potent solution for many managers in coming up and representing their intended actions as response to specific ethical conditions affecting people and the organisation. Keeping businesses ethical holds long-term benefits to every organisation like avoiding conditions such as costly lawsuits that will threaten or ruin organisational reputation and operations. In the United States, people are aware of the damages that publicised unethical behaviours can inflict in organisations even the giant ones (Sims 2003). Therefore, it is important that ethical business practices are kept always.
Managing Cultural Values: the challenge of diversity
On the era of international manpower, the condition of equal opportunity at work continues to challenge many organisations worldwide. Despite the existence of national legislative frameworks on EEO, there is a consistent evidence of discrimination (Blair et al. 2000). In the UK, income inequality and discrimination are the two most prevalent issues in employment (Robinson 2004; Hurley 2003). Inequality and discrimination is possibly related on diversity. In the review of De Ciere et al. (2007), the universalist assumption of the broader fields of international management and business is not reproduced in IHRM. This means that IHRM acknowledges diversity and multiculturalism. Considering the above features of an international organisation, it is important to have an effective people management amidst human and cultural diversity by primarily considering the culture of an organisation. In a cross-cultural environment, the role of human communication is also acknowledged as an essential element to establishing and understanding how people from different cultures communicate with each other. Responding to cross-cultural issues is an attribute of IHRM.
Aronson (2002) acknowledges diversity as an important aspect of any organisation because it is about inclusiveness. It is not simply a code word for minority concerns but a new way of thinking about maximising the potential of everyone within a certain organisation (Aronson 2002, p. 46). It is basically about providing equality within the organisation. Aronson (2002) and Cross (2000) verify that managing workplace diversity seeks to address issues related to human resources, internal communications, interpersonal relationships, conflict resolution, quality, productivity, and efficiency. Diversity is one of the most effective strategies on managing individuals with different characteristics who eventually create the team (Cross 2000). Accordingly, the core principle of managing diversity is to find productivity gains through respecting and using the differences people bring to the entire workplace. Understanding diversity and multiculturalism is reliant to culture. According to Handwerker (2002, p. 107), “culture mainly consists of the knowledge on what or how people use to live their lives and the way in which they do so”. It consists of both explicit and implicit rules through which experience is interpreted. Lok and Crawford (2004) report UK’s cultural profile is similar to that of traditional bureaucracy or ‘pyramid of people’ (Latin) profile. It is commonly characterised by centralised decision-making, top-down or systematic communication, knowledge bounded by personal relationships, and input or employees control. As among the Western countries, UK’s firm are owned by public shareholders and governed by a professional manager, complimenting and less bureaucratic in organisational structure, promotes individualism, decentralised decision-making and more empowering to their workers (Lok and Crawford 2004, p. 323). The concept of culture at work, whether international or local but applied to the organisational level, extensive emphasis should be warranted for because effective HR practices play an effective role on achieving high performance levels of employees (Hofstede 2001). When employees are able to understand the culture of each other, unity amidst diversity emerges.
The role of communication in cross-cultural organisations is highly recognised. Brown (2001) considers communication within organisational context serves a number of fundamental functions (e.g. planning, directing, coordinating, and controlling) and a potent element in emotional expression and motivation (Eckhouse 1994). Communication keeps and maintains values and relationships necessary to keep the system of the united organisation. The ability of the HR Manager to promote effective communication influences employee behaviours and relationships. In a multicultural setting, the customs, beliefs, and practices of the host country contribute in the development of corporate culture. People mingle with different kinds of people as they try to explore different ways of living. They group together in response to problems that arise in the natural or socio-cultural environments created out of their actions. Culture by its nature evolves through time and changes affect every immediate stakeholder. In the organisation, building human relationships require the expertise of HR Manager to effectively handle the unavoidable circumstances wherein intercultural talks, tasks, and challenges take place. Providing employees with awareness, knowledge, positive attitudes, and right skills is important particularly on how to handle HR issues successfully.
There are universally accepted guiding principles used in dealing with values and cultural diversity and for better intercultural communication (Maddox 1993). First, the HR Manager (and group of people) creates contact with other cultural groups. A first move or friendly attempt to establish contact usually lessens and brings down cultural barriers. Forget negative cultural perceptions and biases about a particular group. Whatever managers perceive about people and organisation influence their management practice (Elkin and Sharma, 2007). Being objective in attitudes and values supports the understanding of cultural characteristics and differences. Second, HR Managers and employees must have prior knowledge of other’s culture to provide basic background on how they act such way and so on. A basic knowledge of a certain culture may activate a more friendly contact especially upon mentioning of anything that is familiar with them. Finally, traditional and age-old stereotypes and biases must be eliminated and downplayed. It must be understand that while there are more progressive countries, there are no superior civilisations. Each evolved and developed within contexts and thus, their progress is relative and subjective.
Provided that Western management models are widely used in the world (Elkin and Sharma 2007), IHRM must serve as the common denominator in understanding employee relations across borders but it must deviate against Western’s belief of people as things often regarded as identical, replaceable, and disposable. HR Managers and Transcultural Leaders must be able to immerse their selves to other cultures particularly on all levels of human groupings and acknowledge the importance of people. De Cieri and associates (2007) suggest that there should be imitation rather than integration over other form of progress in IHRM. International HR Managers and Leaders must be aware of the latest theories essential in the performance of their duties in a global setting by looking on real cases and applying learned skills based on existing practices and disciplines. This will result to further understanding of human behaviours and practices that will lead to harmonious human relationships. Unity among people intensifies the ability of the organisation to perform very well in the industry it belongs. Thus, the above assertion remains true and unquestionable.
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