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Friday, 18 November 2011

INTERNATIONAL HRM

Appar8us and International HRM Strategy: A company case study


 


            The challenge of every business, in whatever context it operate, is to effectively manage resources such as labour, financial, information, raw materials and so on. Internationally-based companies must be able to acquire and carry the fundamentals of international management and its dimensions including International Human Resource Management (IHRM) into action. There is convergence in traditional Western and Eastern HRM practices ( 2002). Conversely,  (2006, 23) asks if “are we sharing a commonality in a global business?” in relation to culture. These arguments possibly affect the IHRM theory and practice. Now, it is not enough for international HR Managers to learn the language of other countries to establish effective management practice. In order for them to meet the challenges of the global business community particularly on the HRM and leadership, they should also focus on accepting the need to have authentic interest in the alternative management models of other cultures (, 2007). Transcultural HR Managers should be able to identify, if not perfectly master, alternative management models of other culture for the purposes of diplomatic management of organisational conflict, contradictions, and the business of ethics, which all together indicate the critical test of their ability to deal with the ambiguity of IHRM.


This paper explores the practice of IHRM using the case of Appar8us – a US-owned company – that operates in producing medical tools used in surgery since 1972 and has built up a well-respected business in the USA, with an annual turnover of 0 million and 3000 members of the workforce. It expands its business operations across the European continent by opening subsidiaries in UK (1992), Sweden (1994), and France (1997). Using the report made by the Director of Human Resources,      , it sought to answer the respond on the following topics. First, this report analyses the company’s approach to IHRM by looking on comparative and universal management models focusing on the need for global integration and local responsiveness as well as its effects. Second, it caters on how more appropriate IHRM strategy would help to overcome the problems of European subsidiaries by balancing global integration with local responsiveness as well as to suggest IHRM practices more suited to global integration and which need to be more locally responsive and provide its rationale. Third, this report justifies recommendations made as product of in-depth analyses of the circumstances surrounding the case and bounded on IHRM standard principles and practices.


 


Appar8us’ IHRM strategy and other management models


Considering that the company is US-based, it could be safe to claim that it mainly employs Western ways of management. Most of Western management styles are commonly employed by a great number of multinational enterprises (MNEs) and criticised on treating people as things that are “identical, replaceable, and disposable” ( 2007, 414). The IHRM approach of Appar8us is based on standard and universally-acknowledged functions of domestic HRM. The major distinction is seen on the provision of national context. International HRM is traditionally characterised as the management of people in the global perspective. According to (2006), IHRM is “a branch of management studies that investigates the design and effects of organizational human resource practices in cross-cultural contexts” (523). It includes the “the process of procuring, allocating, and effectively utilising human resources in a multinational corporation” (, 2002, 360). It is recognised that domestic HRM is relative within a single country while IHRM is directed towards the added complexity because of the element of diversity that affects operations and the inclusion of an assortment of diverse workers (  2007, 2002; , 2002). On the case of Appar8us, the IHRM policies and practices are effectively devised within the consideration of the mother company that is based in the US. All HR policies and practices are limited on the given setting. Although the current HR policies and practices serve the company in terms of growth and profitability, other characteristics are relative. Appar8us’ HRM practices are rooted on the idea of consciously following a policy of best-practice HRM to keep out union power. There is strong performance management culture that exists and managed through an astringent appraisal system linked to remuneration and promotion. Total quality management (TQM) programme were implemented over the past 15 years of operations and teams operate work areas or cells. Communication and feedback mechanisms such as annual staff opinion surveys are conducted particularly evaluating on a variety of employment and production issues. There is a strict implementation of training and development programmes to enhance people’s competencies. Appar8us maintains a stable corporate culture by working on their mission statement ‘Appar8us – working for the health of America’. Provided these effective conditions in the US setting, this does not mean that it is applicable to the countries where subsidiaries conduct business. The attempt of the company to establish strong control over its subsidiaries by employing expatriate managers in both technical and managerial areas of the business is not a strategic option. What the company needs to do is to look upon the management models and practices that are acceptable on each country since it is recognised that every country has relative management models used. The concurrent IHRM approach of Appar8us is not totally acceptable in every given context of its subsidiaries. The universal idea of the HRM theory is subjective to assimilation within specific culture. Among the most important consideration in IHRM practice is the element of diversity and multiculturalism. An international HR Manager needs to integrate national HRM practices to applicable IHRM practices. For instance, universal IHRM theory believes on the presence of a variety of national and international remuneration issues.  International HR Managers are expected to be capable in matching up with current pay systems and acknowledging the veracity that different countries have different currency denomination. A variety of fringe benefits provided to host-country employees vary. (2002) included the conditions of housing, health care, transportation, education, and recreational activities for expatriate and local members of the workforce as essential issues in the HR function. On the case of UK,  (2007) notes the emergence of different views on management capability that reveal a compound relationship of national and organisational culture. The analysis of the case shows     ’s observation through particular example on the aspect of work schedule and participation to union. According ’s observation presented on her report, there is difficulty on work schedules (e.g. weekend working) and the pervasive unionisation among employees. In US, people work overtime in order to cope up with the demands of the market. This is rooted on the belief that people in Western management models are merely considered as things. In UK, people are recognised to be among the most important asset of the company ( 2005). There are defined working conditions that cater to the balance of work and life. It is the choice of the UK employees if they are going to work over the weekend or not. This incident is a clear example that the attribute of HRM in West (particularly in US context) is not identical to other setting. Thus, the HR Manager should be able to integrate domestic HRM practice in its IHRM practice and respond on local setting. Global integration and local responsiveness of specific HRM practices is important provided that it will serve the needs of both parties – the company and the employees alike. This condition goes through the other cases of Swiss and French subsidiaries of Appar8us.


 


IHRM strategy and overcoming problems of European subsidiaries


            A more appropriate IHRM strategy would help to overcome the problems currently being experienced in the European subsidiaries not only by means of balancing global integration with local responsiveness but also imitation rather than just integration.  and group (2007) argue that imitation is reflexive movement supported by IHRM theories and practitioners and rooted on what they learned from existing practices and disciplines. The observations of Jane should be used in addressing the difficulties encountered in the European subsidiaries. Provided that the universal assumption on international management and business is relative, the HR Department of each subsidiary needs to evaluate HR policies and practices in specific areas by emphasising on local setting. An appropriate IHRM strategy will support company strategy especially in generating profits. A good IHRM strategy, for example on the case of diversity, is tantamount to harmonious working relationship among employees and the management.  (2007) assert that human relation ship is important in life. This importance of people, when applied on the aspect of IHRM, serves as a major building block in the context of developing and achieving performance and productivity. Considering the above features of Apparaus and its IHRM practice, it is important to have an effective people management within its bounds amidst human and cultural diversity. This is done through the consideration of the important contribution of diversity in organisations based on the concept of inclusiveness ( 2002). Diversity goes beyond a simple code for minority concerns. It is a new way of thinking about increasing the potential of all employees ( 2002, p. 46). Managing diversity in organisations is reflected to the welfare of employees particularly on fairness and equality.  (2002) and (2000) prove that managing workplace diversity minimise issues connected to human resources, internal communications, interpersonal relationships, conflict resolution, quality, productivity, and efficiency. Since Appar8us employees work on teams, diversity is one of the most effective management strategies in terms of different characteristics possessed by team members ( 2000). Understanding diversity is crucial to transcultural business settings. The acknowledgement of diversity as a response to local concern is founded on the belief that the uniqueness of every team member is an advantage provided that it is used positively. Accordingly, the core principle of managing diversity is to find productive gains by respecting and using the differences among people.


 


Communicating diversity and multiculturalism towards advantage


            Aside from the deviation to the traditional belief advocated by most Western ways of management, people must be recognised as important assets of the organisation and fuels of productivity. A more appropriate IHRM strategy is bounded on the recognition of the benefits of diversity. It is suggested that in order to respond on local HR concerns of subsidiaries, host organisations should integrate the idea of diversity on its current HR policies and practices. In a multicultural business setting, the customs, beliefs, and practices of the host country, where the organisation has set up its business, are significant contributory factors in the development of a stronger corporate culture. There are many ways in which Appar8us can communicate and promote diversity to a level of advantage within the company’s subsidiaries. These are also among the practical justifications of the benefits of suggesting diversity as the enhancing factor of the present IHRM strategy.



  • Since most employees work in teams, the HR Manager must be able to extend and create contact with other people who have other cultural backgrounds. Scheduled team-building activities may help. Teamwork must be cultivated among members of the team regardless of cultural origin and orientation.

  • There is a requirement for the upper management to implement other cross-cultural training courses to expatriate managers apart from pure foreign language acquisition and learning. Again, it is recognise that HR Managers and Transcultural Leaders can only meet the challenges of the global business community particularly on the HRM and leadership when they dedicate an amount of concentration on accepting the need to have authentic knowledge in the alternative models of managing other cultures.

  • Foster communication and employee or human relationship through establishing a friendly working atmosphere. Being friendly helps. A first friendly move or attempt to establish contact, for example a US Manager toward a French Manager or Swiss employee, usually lessens and sometimes eliminate cultural barriers.

  • HR Managers and employees must have prior knowledge of other’s culture and orientation. This is to provide managers and employees to have basic background on how or why do these people act in such ways. However, all negative cultural images must be eliminated. Being objective in attitudes and values will support anyone in the understanding of cultural characteristics and differences.


In general, IHRM must serve as the common denominator in understanding employee relations across geographic and cultural borders. On the case of Appar8us, relativity in HR policies and practices and diversity and multiculturalism must be understood by all HR Managers particularly those who works outside the boundaries of the mother company. When this happens, the ability of the organisation to perform very well in the industry and niche market it belongs is progressive in pattern.


 


Reference



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