Application and analysis of international HRM theory

Describe about the Human Resources Management for GM Holden Ltd.

GM Holden Ltd is referred to as Holden. Holden was founded in 1856, by the founder James Alexander Holden and Edward Holden. In 1908, Holden became the subsidiary of General Motors with headquarters in Port Melbourne, Victoria Australia. Major area served by the company is Australia and New Zealand. Holden mainly deals in automobile and engines. After becoming the subsidiary the company had known to be General Motors-Holding Ltd, but the name was acquired in 2005 (Holden.com.au.2016). For providing General Motor vehicle operations and owing partial ownership in GM Daewoo, Holden was held responsible. Holden also offered number of models in badge engineering for sharing arrangements in “Chevrolet, Nissan, Opel, Toyota, Suzuki, Isuzu, and Vauxhall Motors.” In May 2015, vehicles of the company were sold in the countrywide with the help of network of Holden Dealer which is employing about 13500 people.  In 1987, there was formation of HSV (Holden Special Vehicle) in doing partnership with Tom Walkinshaw.  Holden started its exporting its FJ series to New Zealand in 1954. In 2013, it was announced that exports of Commodore will be resumed to North America in the form of VF Commodore because Chevrolet SS sedan was the model of 2014.  Finally, in the year 2016, SS Sedan got a facelift by VF Series II Commodore which will be unveiled in September 2015 (Holden.com.au.2016).

International Human Resources Management (IHRM) is defined as a branch of management study for investigating the design and its effect on companies HR practices in the context of cross culture. This field of study was evolved fragmentation and beginnings of the practices. IHRM includes almost all the functions of HRM like recruitment, training, selection and development with performance appraisal as well as dismissed the international level with additional activity for enhancing the global activity of the management. IHRM aims in creating local appeal without making compromising to the global entity. IHRM will be creating general awareness in the cross-cultural sensitivity between the managers who are globally as well as the hiring of the staff within the geographical boundaries. Training will be conducted over cultural and sensitivity activity of the host country (Stahl et al., 2012).

 There are some theories in the context of IHRM which will help the company in critically analyzing the business activity in regards to present and emerging international theories of HRM. There are several theories which will be explaining and analyzing the activities through HRM practices are explained through (Budhwar & Debrah,2013). Theories of X and Y by McGregor, Theory of Needs by McClelland and Two Factor Theory by Herzberg can be used for critically analyzing the business activities in terms of current as well as emerging international HRM theory. There are number of business activities which are getting affected by the HRM theory of an organization, which are given as follows:

Analysis of cross-culture differences

Improvement in employing advance workforce – The number of skilled workforce should be increased in the Australia and India. Presence of skilled workforce will help the company in moving forward with the operations of the company (Griffin & Pustay,2012).

Reduction in administrative work – There are number HR functions which has role of liaison among the functions of HR and business leaders. Implementation of this role is done poorly, but concentration of the admin duties is one of the major functions plays a great role. So there will be decrease in the admin expenses (Bratton & Gold,2012).

Development in internal HR skills – HR department should find ways to improve the skills of the employees. The company should invest money in improving the talent and skills of the people in India as well as Australia.

Improvement in capabilities of line managers – Improving the capabilities of the line managers will help the company in the decision making process. The line managers are one of the key people in expanding and growing the activities of the business.

Outsourcing the HR activities – Outsourcing is one of the effective way for employing skilled and advance labor for the company. Sometime outsourcing turn to be one of the cost-effective approaches for improving the performance of the business (Snell et al., 2015).

Complexity of cross-culture plays a great role in integrating the international business activities as well as IHRM practice. Before describing the complexity of cross-culture, first let us describe cross-culture. Cross-culture can be defined as features of group of people, which has different customs, values, behavior and attitudes that is transferred from one generation to the next. It is also said to have scientific process of comparing research which will be concentrating on the systematic comparison, which will be comparing from one-culture to other and explicitly aiming the incidence of the and causes of the cultural difference and complex issue among the huge domain in the worldwide (Nel et al.,2014). There are number differences which will be are arising due to cross-cultural differences in India as well as Australia, are given as follows:

Individual from different counter will be having various views on the individual cognition, aim in the social interaction and will be influencing the behavior as well as goal in the decision making (Jiang et al.,2012).

In India there is lack of skilled workforce which will create barrier in settling the company.

Similarities and differences in HR Practice and culture

People from Australia and India their culture tends to be self-independent for experiencing happiness and in the emotions of social disengaging (Berman et al.,2015).

Individual form Australia and India will be following the social orientation of the public will be overriding the advantages of an individual, so for striving the best-achieved benefit will help in giving decisions (Mathis et al.,2016).

There is some difference in the pattern of decision making process whether is independently or interdependently taken on the social orientation of risk taking capacity.

In the cross-culture, there is a difference in the view point of in India as well as Australia will be creating barriers in the communication of the organization.

For fulfilling the aims and objective of the company, the cross-culture difference needs to be identified in both the company.

Cross-culture serves to be one of the most important factors for improving the performance of the company. Cross culture creates a huge difference in the formation of the company. Company in both the country will be facing some difference due to above mentioned reason.

Activities performed by the human resource are directly related to the practices of Human Resource. For contrasting the difference and similarities in the HR activities and practices can be highlighted through the following points:

HR Practices – HR practices are said to be strategic in nature. It is major criteria for guiding and coordinating with the executives of the company. HR practices stand as foundation support for utilizing the company capital by operating on behalf. For example, HR Practices includes the formulation of a process for analyzing and measuring the effect of a specific employee for a program of reward (Hendry,2012).

Leadership Contribution – HR Practice stands as a way of developing the leadership criteria of the staff. The constructions of avenues will help the employees in the organization for getting an opportunity in the advancement of their skills. For example, designing of the mechanism will enable the promotion of the regular employees, which will also offer the staff member to grow towards the position of leadership.

HR Activities – Activities of HR will be embodying the directive with the help of HR practices. For example, the activities related to the practice of giving consistent training to the employee will be presenting the outlined information of the training program. An example of HR activity will be engaging in doing competitive surveys for ensuring that the workers of the company are getting fairly compensated as well as attendance and overtime of the employee are managed properly (Oke,2016).

Two steps – To utilize the human resources in the business one must understand, implement and generate integrated approaches for practice and activities of HR. The method will be viewed as having two-steps: first, an establishment of the designed practices needs to be done for achieving a goal of business in the efficient, safe and legal process. Second, execution of the practice will be done through the related activities which are necessary for enactment.

All the above mentioned points have clearly critically analyzed the difference and similarities in the practice of human resource management between the different cultures of the country. HR practices comprise strategic operations of the company. Human resource activities are carried out under the department of HR. HR practices are carried out with the help of employees. HR activities are allowed on the mission and goals of the different department and will be carried out with the help of methods used in the activities (Bennett & Ho,2014).

There are several criteria for selecting, preparing, managing and repatriating international managers. Repatriating can be explained to as when an expatriate is returning to home country, for which he will be experiencing “reverse culture shock” which can lead to dissonance in the work and family. The company should make an adjusted program for repatriation, for a company providing counseling to the employee for dealing with sudden changes. The company should utilize the experience and knowledge of the repatriate. Employee’s career progression and foreign assignment should be decided before hand for avoiding stagnation of the career for returning (Whetzel & Wheaton,2016).  

For expatriate manager there are different criteria which are as follows:

Strongly willing to work overseas.

Having suitable and well-adjusted family.

Flexibility in the behavior.

Adaptable and open-minded.

Good at handling stress.

Good and excellent in technical skills

Knowing a variety of languages.

The criteria for selecting and preparing international manager are given below:

An individual has to be a “people person,” which means that managers should be liked by the people. The manager should be comfortable in giving resolution to the conflict. The manager should know to work with a team and motivate them whenever required. The manager should have good English to communicate with the people.

A manager should be visionary. The manager should always be prepared in identifying a new product or service which will be increasing the demand for the company. The manager should always effectively utilize its resources and should have a vision of seeing a large picture regarding the expansion (Purce,2014).

The manager should be a good communicator. The manager should make effective present the company in public-speaking, email, visual presentations, teleconferencing and face-to-face. The manager should make a routine update of the employee regarding enhancing the performance of the team. The manager should be equal in sharing information between all the employees. The manager should not shout, curse, throw a fit, threaten or physically or verbally abuse any level of employees (Armstrong & Taylor 2014).

The manager should be technically proficient. The manager should be aware with the entire technicality for the company he is working with. The manager should also develop the best strategy and methods to be applied for a success of the company.

The manager should be selfless and always be prepare for falling in the sword, to meet the needs of the staff. Managers should always thing for his employees first and then move forward to think about self (McPhail et al.,2012).

The manager should always move forward to work and encourage the team member. The manager should and assist the employee of the company.

A manager should set an example for a lead of the company. The manager should dress in a professional manner, be always present in supervising the employee of the company.

The manager should always treat the staff and employees as professionals. The manager should have confidence in deciding the proficiency of the issue to get solved in the workload within them. The manager should take the workload on himself, not on the shoulders of the employees (Furusawa & Brewster,2016).

The manager should keep an update and enhance the skills of the team as well as of self. The manager should always move forward with the professional growth of the company.

A manager should always try doing something special for the employee as well as for the company. The manager should try to present a unique feature within the company.

Further moving with the research it has been noted there is various approach for comparing and contrasting the practices of IHRM. There are three types of approaches while staffing with the MNC’s (Tonks,2012).

The polycentric approach is the approach for framing the policy of hiring and promoting employees of the host country. This approach is the cheapest way of training and recruiting as well as few issues arising from the adjusting and communicating with all the employees from the similar place. Under this approach, each and every subsidiary stands as an instinct to the host country.

The ethnocentric approach, this approach has used the companies for having a strategy with an international orientation, where polycentric is maintaining staffs from the similar place, and ethnocentric will be including sending employees from the home country to the host country. Under this approach, each and every decision stands as centralization to the home country.

The geocentric approach is adopted during the implementation of transnational orientation. In this approach, individuals are recruited by skills, experience, and qualification excluding the factor of nationality (Nguyen et al.,2015).    

There are various issues involved in critically discussing the international business as well as its implication on the human resources management. Most of the MNC’S is relying on the approach of a balance sheet for deciding the pay as well as the benefits arising from it. This can be implemented with the methods based on home, headquarter and host (Dunning,2012). The companies should compensate for the extra-cost arise from living, premium service of foreign, medical, educational allowance for the children of the employees and maintenance of house in the host country. The company also has to make compensation for the dual burden of tax and excise customs. Moreover, the company has number of issues which is given below:

Difficulty in managing international projects.

Difficult in getting adjusted to a new environment for the employee as well as for the family.

Choosing an appropriate person for the foreign project.

Difficulty in getting adapted to new culture and communication pattern.

Clarification in the rules and regulation of taxation.

Facing difficulty in coordinating with foreign currencies and exchange rate

Difficulty in getting adapted to the compensation plans.

Complexities in getting understand the external constituencies, foreign politics, government and religious groups.

Distinguishing HR system from various geographical locations.

Huge exposure to risks like health, legal issues, human, terrorism and financial difficulty.

Cultural diversity maintenance becomes difficult.

Staffing policy creates a significant role in the international human resource management. The success of the company relies on recognizing and attracting the applicants who are competitive in the recruitment process. Staffing also creates challenge in the roots of global management for dealing HR policies and practices (Ball et al.,2012). Implementation of global talent covers a wide geographical area which is rich in culture becomes a challenge in the functions of IHRM. Compensation system of the IHRM will be creating dialogue and collaboration. In spite of having all the above mentioned challenges there are number of challenges faced by the IHRM are given as follows:

Increased failing rate of expatriation and repatriation.

The occurrence of deployment for getting the right mixture of skills in the company excluding the factor of geographical location.

There are several barriers for the women in the IHRM.

Recognition of talent for improving the capacity of the people working effectively in the function of IHRM.

The ethical problem occurred internationally.

The occurrence of knowledge dissemination in the process of innovation for managing the critical knowledge as well as a flow of information.

There can be an improvement in the crises of IHRM if proper planning is done by setting a clear objective to this rectified problem. The solution of the crises will help the company in saving direct as well as indirect cost. There has to proper assistance for the professional of HR in the way of development and implementing the strategies of HRM for complying the overall strategy. There should be a creation of a high-level framework for guiding and training the employee of the company on the best available international practices. There has to be development in the human capital. There has to development in the training courses of the employee working in the organization with high competencies. There has to be full development in the guidelines and framework of the company, for effective fulfillment of the HRM activities. It is further recommended that for effective execution of the HRM activities there has to proper coordination and collaboration of the line managers working in the company.

Conclusion

Managing IHRM in an organization is one of the complex issues. An MNC needs to strive continuously for improving the international strategies of HRM. Selection of the employee has to be done on in an effective way which helps the company in fulfilling foreign projects. Selection of the candidate should be in a holistic way, way getting adapted to the culture of working. Training of the employee should be conducted in an effective way for improving the advancement in the employee’s skills.  Management of the repatriation in the employee’s career progression and foreign assignment should be decided before hand for avoiding stagnation of the career for returning. Finally to conclude the report it can be said after going through the report one can fully understand the issue of International HRM. The selection criteria of international managers have been explained in details.

Reference list

Armstrong, M., & Taylor, S. (2014). Armstrong’s handbook of human resource management practice. Kogan Page Publishers.   

Ball, D., Geringer, M., Minor, M., & McNett, J. (2012). International business. McGraw-Hill Higher Education. 

Bennett, J. M., & Ho, D. S. (2014). Human resource management. InPROJECT MANAGEMENT FOR ENGINEERS (pp. 231-249).  

Berman, E.M., Bowman, J.S., West, J.P. and Van Wart, M.R., 2015. Human resource management in public service: Paradoxes, processes, and problems. Sage Publications.

Bratton, J., & Gold, J. (2012). Human resource management: theory and practice. Palgrave Macmillan.  

Budhwar, P. S., & Debrah, Y. A. (Eds.). (2013). Human resource management in developing countries. Routledge.  

Dunning, J. H. (2012). International Production and the Multinational Enterprise (RLE International Business). Routledge. 

Furusawa, M., & Brewster, C. (2016). IHRM and expatriation in Japanese MNCs: HRM practices and their impact on adjustment and job performance.Asia Pacific Journal of Human Resources.  

Griffin, R. W., & Pustay, M. W. (2012). International business. Pearson Higher Ed. 

Hendry, C. (2012). Human resource management. Routledge.  

Holden Australia – Discover New Possibilities. (2016). Holden.com.au. Retrieved 6 October 2016, from https://www.holden.com.au/

Jiang, K., Lepak, D. P., Hu, J., & Baer, J. C. (2012). How does human resource management influence organizational outcomes? A meta-analytic investigation of mediating mechanisms. Academy of management Journal,55(6), 1264-1294.  

Mathis, R. L., Jackson, J. H., Valentine, S. R., & Meglich, P. (2016). Human resource management. Nelson Education. 

McPhail, R., Fisher, R., Harvey, M., & Moeller, M. (2012). Staffing the global organization:“Cultural nomads”. Human Resource Development Quarterly,23(2), 259-276. 

Nel, P. S., Werner, A., Botha, C., Du Plessies, A., Mey, M., Ngalo, O., … & Van Hoek, L. (2014). Human resources management. Oxford University Press Southern Africa.

Nel, P.S., Werner, A., Botha, C., Du Plessies, A., Mey, M., Ngalo, O., Poisat, P. and Van Hoek, L., 2014. Human resources management. Oxford University Press Southern Africa.  

Nguyen, L. D., Kass, D., Mujtaba, B. G., & Tran, Q. H. (2015). Cross culture management: An examination on task, relationship and work overload stress orientations of German and Japanese working adults. American International Journal of Social Science, 4(1), 51-63.  

Oke, L. (2016). Human Resources Management. International Journal of Humanities and Cultural Studies (IJHCS)? ISSN 2356-5926, 1(4), 376-387.  

Purce, J. (2014). The impact of corporate strategy on human resource management. New Perspectives on Human Resource Management (Routledge Revivals), 67.

Snell, S. A., Morris, S. S., & Bohlander, G. W. (2015). Managing human resources. Nelson Education.  

Snell, S. A., Morris, S. S., & Bohlander, G. W. (2015). Managing human resources. Nelson Education. 

Stahl, G. K., Björkman, I., & Morris, S. (Eds.). (2012). Handbook of research in international human resource management. Edward Elgar Publishing. 

Tonks, D. (2012). In what ways have the staffing trends of expatriates changed and how valuable are they to MNCs?. 

Whetzel, D. L., & Wheaton, G. R. (Eds.). (2016). Applied measurement: industrial psychology in human resources management. Routledge.