INTERNATIONAL HUMAN RESOURCE MANAGEMENT
Introduction
The world today is in total transformation. Progress and consistent innovations create a form of interdependence between persons, between societies, and between countries. Globalization is increasingly making life more fast-paced and drives people to have a more global mind set. Knowledge, technology advances and lifestyles are passed on across national borders and territories with the aid of the media. Businesses are no exception. (2004) added that today, not only markets for most goods and services are global, but investment across borders continues to increase, and the number and value of cross-border mergers and acquisitions and international joint ventures and alliances continue to increase. Thousands of firms and millions of people work outside their countries of citizenship ().
As the phenomenon of globalization continuous to thrive, international firms and enterprises rearrange their operations to adjust to the demand of the international market. Business expansions outside the country of origin and across national boundaries demand a new set of knowledge, skills and strategies with international orientation. This new reality is true as written by (2004) for the human resource management function as it is for other business disciplines, such as finance or marketing ().
Human Resource Management in the International Context
Human Resource Management (HRM) also called personnel management, as defined by (2006) consists of all the activities undertaken by an enterprise to ensure the effective utilization of employees toward the attainment of individual, group, and organizational goals. The HRM function focuses on the people side of management. As a global company, the only way to succeed is to develop an effective global human resource management system with personnel capable of designing and implementing transnational business strategies (1990). According to (2004) the role of international Human Resource professionals is coming to the fore as firms continue to globalize at a pace. Information and communication technologies are transforming organizational structures and business processes, breaking down organizational and geographic boundaries (). As the approaches to and strategies for conducting international business have become more complex and difficult, so also have the staffing options for such firms. Staffing for the multinational firm within its home country as well as hiring by its foreign subsidiaries can involve seeking employees from any of the following types: PCNs (parent-country nationals), HCNs (host-country nationals), and TCNs (third-country nationals). Typical employment practices for managerial and often marketing and technical positions in foreign subsidiaries place heavy emphasis on the use of expatriates, particularly of the traditional type, i.e., employees on assignment for more than one year from the parent firm (2004).
Expatriation as a Staffing Approach in International Human Resource Management
(2005) argued that the internationalization of business has resulted in the increasing use of expatriates by organizations to fulfill a variety of functions in their offshore operations. Expatriation is the process of moving from one country to another while staying in the employment of the same firm. There are many reasons that multinational enterprises (MNEs) transfer personnel from one country (the home country) to another. These usually include the need to establish a new facility or operation; transfer technology to a foreign operation, solve particular problems or to use a particular expatriate’s technical or functional expertise; ensure control of the foreign subsidiary by the parent firm, enhancing employees’ career development; developing managers with global perspectives; helping to develop a common, worldwide organizational culture; and the training and development of local managers and technicians. Research and observation suggest that there can be numerous reasons for the use of expatriates, but the key reasons still appear to be for their technical or functional expertise, for control, to start a new operation, and for managerial development purposes (2004). The matter of expatriation in international human resource management practice brought about the Ethnocentric, Polycentric, Regiocentric and Geocentric (EPRG) Profile or approach as introduced by Heenan and Perlmutter 1979 ( 2004). First, an exportive or ethnocentric orientation to international Human Resource Management (HRM) staffing emphasizes a centralized focus with a headquarters-based authority and results in a full-scale transfer of the parent organization’s HRM system to the subsidiary. It facilitates organizational control while at the same time providing important international developmental experience for promising domestic managers in the parent organization. Therefore, this orientation has depended heavily on parent-country nationals (i.e., expatriates) for staffing key subsidiary position. Secondly, an adaptive or polycentric orientation focuses on widely dispersed authority in managing the existing parent subsidiary relationships where in the subsidiary adapts its human resource policies, philosophies, and personnel to the local environment with limited intervention or control from the parent organization. This orientation has resulted in a heavy reliance on recruiting local nationals (e.g., individuals from within the country where the subsidiary is located) to manage the subsidiary operation. Finally, an integrative orientation suggests that HRM policies and practices transfer from the parent to the subsidiary and from the subsidiary back to the parent organization resulting in a high volume of communication in both directions. This orientation extends prior research on regiocentric and geocentric approaches that focused on staffing subsidiary locations by using the most qualified personnel (within a region or globally respectively) regardless of nationality. Thus, in addition to the local national and expatriate candidate pools, the integrative orientation might also involve the use of third-country nationals (i.e. experienced managers from neither the parent nor host country, who have the skills to run subsidiary operations and often take on regional management responsibilities) ( 2001).
(2002) stated that while some progress has been made in selecting and training expatriates, many of the problems identified in the 1980s are still present today. These include inadequate selection procedures, lack of training, premature departure from foreign assignments, ineffectiveness of expatriates, and family problems and influences on job performance. (2006) thought that the biggest challenges being faced by the larger and more experienced international companies are about seeing the international assignees as just one part of their whole international workforce; the need for a more strategic focus which means to develop approaches to integrate expatriates more into the mainstream of the talent management and to manage home networks and expectations; shortage of talents because of demographic development; the change from local into global thinking; the concept of global nomads i.e. globally mobile managers; and the issue on repatriation. Repatriation is the opposite of expatriation: it involves the move of the International Assignee back to the parent company and country from the foreign assignment. Firms often fail to use the experience or knowledge gained in the foreign assignment and most likely have not thought about the career implications of this experience. Repatriates often find it difficult to relate the value of their global experience to managers with a domestic focus. In addition, the repatriate and his/her family often also have trouble readjusting to the home lifestyle. Most people are changed by the foreign experience and not only must relearn their original culture and lifestyle, but probably view it very differently than when they left. The kinds of practices that multi-national enterprises have used to ensure a successful expatriation and repatriation experience include assigning a “sponsor” back home to look after the expatriate while s/he is away (including keeping the expatriate informed about significant events and changes back home and looking after the expatriate’s career interests, including putting the expatriate’s name into consideration for key openings when the expatriate is ready to return home), providing career counseling to ensure job assignments upon return that meet the needs of the repatriate, orientation for the expatriate and his/her family for adjustment back into the home culture, use of the skills acquired overseas in special task forces and projects, and special support networks for the repatriate and her/his family both during the overseas assignment and upon return home ( 2004).
Furthermore, (2002) suggested three ways to improve expatriation practices. First, companies need to determine and reassess regularly what level of importance international operations play in their organizational mission. Second, companies need to determine what kind of expatriate training/preparation is necessary to achieve particular goals. The focus should be on the benefits to the organization, not just individual development. It is also crucial to recognize that, depending on their assignments and functions, different units within an international organization may have different training needs. Lastly, companies need to systematically manage the knowledge expatriates have gained and apply it to the benefit of the organization. This should take place during and after an expatriate’s foreign assignment. Knowledge management involves collecting, storing and disseminating information, so the corporation can use the expatriate’s knowledge, even if the employee later leaves the company.
Conclusion
Globalization as part of the modern world affects many facets of societal and economic life. Companies and businesses are motivated to deliver goods and services outside the country, across national boundaries. This phenomenon carried with it a demand for a drastic shift in the entire aspect of the company’s management of its people. One critical area of human resource management is staffing – getting the right people and assigning them the right jobs. International assignment or moving one employee to another country under the same firm is a common strategy. This practice is inspired by the purpose of developing global managers and building their capacities in response to an international audience. The approach is a huge challenge in itself and calls for a through analysis and planning in order for the company to carry out its international staffing practice with fruitful rewards.
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