Nature of International human resource management

Discuss about the International Human Resource Management.

The international human resource management is basically similar to the management of human resources through inclusion of various HR activities, payroll, talent management processes along with processes of recruitment and selection of employees on an international scale. The IHRM includes all the major activities of managing human resources through management of business functions such as recruitment, selection, training, appraisal of performances and termination of employees too, all of which are done on an international level for promoting successful business operations and improve organizational efficiency. The various functions of IHRM could help Foster’s Group in Australia to achieve the goals and objectives and gain competitive advantage over its competitors in both local and international levels (Alfes et al., 2013). The topic will focus on the various trends and challenges for international HRM and its probable impacts on international business of Foster’s Group in Australia (fostersbeer.com, 2017).

While managing IHRM within a multinational corporation, three different types of employees are involved such as the home country employees, host country employees and the hired country employees. The Home country employees find working at Foster’s Group the most convenient, because they stay at Australia only and this can allow them to work at the place where the corporate headquarter is located. The employees who belong from Australia where the subsidiary is located are the host country employees whereas the employees who are neither home country employees nor host country employees, though work at the subsidiary corporate headquarter re third country employees (Armstrong & Taylor, 2014). An employee from some other country working at the Australian Multinational corporation could be a third country employee. Institutional theory is an important theory concerned with the international HRM practices that allows for consideration of various processes to establish structures, schemes, rules, norms and routines as important guidelines for management of social behavior. The institutional theory enables to combine the various components of IHRM, manage the HRM practices on an international level, and ensure business success with ease and effectiveness. This kind of theory can help in managing proper flow of the global human forces and form power struggles (Bratton & Gold, 2012).

There are various contemporary needs for business in making strategic decisions including gaining sustainability related to finance, environment and even enabling proper certification and licensing to manage the business functioning properly. Foster’s Group is known for its good quality beverages including Wine and beer and so proper management of supply chains is essential. The contemporary needs of the organization include gaining sustainability by taking care of the vineyards, extract the best quality juices and make great wine and beer, which can ensure running business responsibly and generating huge amounts of profit in business. Enough revenue should be generated so that it could cover the costs and continue the business operations to meet the contemporary needs of gaining financial sustainability (Brewster et al., 2016). Foster’s Group, Australia has good amount of capital and enough funds to meet the objectives of the organization and make premium quality wine so as to remain successful in the business long run.

Contemporary needs of business in strategic decisions

Contemporary needs of Foster’s Group could be met by creating very less harmful impact on the environment, though delivering high quality wine to the consumers. The company has focused on marketing and supply chain management to increase the interests among customers and develop good mindset, thereby influencing their buying behaviors too. Beer and wine are made from various agricultural products and this is why, it is important to meet the contemporary needs by managing environment friendly practices and create a sustainable position in the market. The IHRM needs have been met by employing various individuals from the host countries and even from outside Australia (Budhwar & Debrah, 2013). To make them habituated with the surroundings and adopt the current business practices of Foster’s Group, Australia, proper training and development sessions should be provided to improve their skills, knowledge and expertise level.

To fulfill these contemporary needs, Foster’s Group must develop proper strategic management plan for making predictions of the future and identify the new ideas, trends and make sure that the resources are utilized properly. The HRM managers must ensure that employees with proper skills, knowledge and expertise should be hired who had knowledge of the agricultural components had needed for wine production along with the sustainable practices that could be considered by the organization (Buller & McEvoy, 2012). It would also be important to train them well and good, make them knowledgeable about the ways of approaching the objectives, and maintain sustainability through fulfillment of contemporary needs in business (fostersbeer.com, 2017).

The most important trends for International human resource management are integration of the economy of the world and internationalization of business, which can result in management of international trade properly and bring out positive outcomes. Another major trend of the IHRM is the increased flow of foreign direct investments along with the emergence of cross-cultural business activities and inter-firm agreements for Foster’s Group, Australia. With the recent trends in IHRM followed by Fosters Group, the social, economic and political factors have changed and created impacts on the various approaches of conducting international business (Daley, 2012). The outside environment influences the IHRM activities largely because of the different laws, business customs, political environment and rules that are present in Australia.

The major issues and challenges in IHRM include difficulty to manage the international projects, having problems to adjust and give time with the families as few employees are away from their home country while working at Foster’s group in Australia. It often becomes difficult o manage the human resources properly while recruiting and selecting the right individual for doing the right job and there are other barriers too such as cultural barriers, language barriers and differences in external environment as well (fostersbeer.com, 2017). Few other challenges faced by the IHR manager could be tax related issues, unable to coordinate the foreign currencies and rates of exchange and the difference in HR systems for the various geographic locations. The Government rules and regulations are also different in Australia, so the employees who would be recruited or might have left their home country should be subjected to various issues like health, legal and financial complexities too. During the international management of human resources, the failure rate of repatriation and expatriation is quite high and getting the appropriate mix of skills and knowledge among the newly recruited employees is quite difficult, regardless of the geographic location (Griffin & Pustay, 2012). Other challenges for IHRM could be distribution of knowledge and information related to the organization and often it had been seen that the flow of information had deteriorated.

Trends and challenges for IHRM

The labor laws are different and even the political environment, which are considered as major challenges. There are various stages related to the advancement in technology and the employees who have visited Australia from their home country may not be able to feel free with the new technologies at Foster’s Group. The level of education achieved is another challenge for IHRM, because the employees who want to work at Australia and pursue education at the same time may not be familiar with the Australian educational system and know about the various learning facilities and systems due to the variance in culture (Jiang et al., 2012). The variation of culture is based on five major dimensions including the individualism vs collectivism, power distance, uncertainty voidance, masculinity and long term vs short term orientation. Mobility is another major challenge because employees will have to leave their home country and visit the place where they need to work in Australia and ensure that they perform to their potential. The main barriers to effective IHRM are variations in rules and regulations, perception of human resources management, resistances to change or adopt the new environment and differences in culture during the management of learning and teaching styles (Marchington et al., 2016).

Based on the recent trends, it could be understood that the HR department must enable a proper mix of staffs within Foster’s Group who possess all the relevant skills, knowledge and expertise to adopt the new work culture. The recent trends include providing training and developmental sessions to the employees that can not only improve their skills, but will also enhance their performance level and ensure that they commit fully to the organization for achieving the desired goals and objectives (Mendenhall, 2012). In this way, the employees will also be able to gain working knowledge of the culture and language as well as know the values, beliefs, morals, customs, laws, rules and regulations of the organization where they have been working at present. This would also promote flexibility, identify the differences in performances of employees, and furthermore provide them with developmental programs for improving the areas where they lacked certain skills and strengths. Nowadays, Foster’s Group has managed to recruit and select individuals from diverse backgrounds, culture and from different educational backgrounds as well for managing workforce diversity and ensure better innovation and creativity for allowing the organization to gain competitive advantage in business. This could enable providing a strategic direction to the organization as well as allow for focusing on the goals and objectives with ease and effectiveness (Renwick, Redman & Maguire, 2013). With the presence of a diverse workforce, it would be easy to gain potential benefits from enhanced innovation and creativity along with better decision-making ability for improving organization’s competitiveness. Thus, the recent trend of managing a diverse workforce should create a positive impact by proving proper training to individuals and making them skilled of managing and dealing with other people within the organization and respect the diversity of views and opinions of theirs as well (Snell, Morris & Bohlander, 2015).

It is evident that people as well as organizations learn from mistakes and so it is believed that challenges related to the IHRM practices can often lead to making changes and improvements for enhancing the organizational efficiency and ensure that the issues are not faced again in the future. The challenges in IHRM could often bring negative implications such as change in prices of products and services offered by Foster’s Group. There are various evidences which showed that lack of educational skills can often be the cause of not understanding the projects undertaken by the company and furthermore deteriorate the organizational effectiveness (Sparrow, Brewster & Chung, 2016). The business internationalization at Foster’s Group has resulted in better mobility of the human resources and created a diverse workforce. But there were many employees who had felt depressed and faced issues regarding country permit, finance and even legal issues while visiting Australia, where they worked at Foster’s Group. Mobilization of human resources is costly and it can hamper the production level of the company sometimes too. New technologies should be implemented otherwise, it could also result in degrading the business performance and prevent proper business functioning as well. Often, discrimination at workplace is experienced when individuals from different backgrounds and cultures are recruited. Lack of skills and proper education could also create issues and affect the IHRM practices, as the employers would not be able to recruit and select the potential candidates and assign them the right kinds of tasks (Stahl, Björkman & Morris, 2012). Knowledge about the different culture is important for the third party employees, because they need to adopt the new culture to perform to their potential at Foster’s Group. The challenges could even pose major threats because relocating to another country might even change their health condition and create financial issues and furthermore make them unable to perform efficiently and manage the IHRM practices. This would hamper the efficiency of IHRM practices and degrade the efficiency of business operations and processes, thereby resulting in creating negative impact while managing international business (Alfes et al., 2013). Political risks could prevent the organization to enter new markets and even recruit the most skilled employees. The challenges also create difficulties to manage suppliers and supply chains and even hinder the human rights policies that not only results in inappropriate management of human resources but also deteriorates the effectiveness of IHRM practices (fostersbeer.com, 2017).

There are both similarities and differences between the HRM practices in Australia and other countries. In Australia, the multinational corporations implemented various policies to reduce the central Government employment. The private sector has been mostly focused on to manage the savings methods and manage the IHRM practices properly to sustain in the global business environment and make a positive impact on the public service resourcing too. The organizational values and beliefs more or less remain same for the multinational companies, and so it creates very lesser issues for the employees to cope up with the surroundings. Every diverse culture present within the workplace of multinational companies consists of individuals from different backgrounds, ethnicity, religion or race (Armstrong & Taylor, 2014). The diverse culture and workforce can bring the varied opinions of many employees, which will not only create ease of managing global business, but will also increase the overall business performance.

The first and foremost criterion for selection of international manager is to check whether the individuals do possess enough leadership skills and knowledge of managing the human resources properly or not. Management of human resources is a serious issue and organisation’s success depends upon how well the human resources are managed. Selection of international managers is done who has the ability to mix the organizations culture and can get the employees involved in the working environment with ease. The international managers must also have proper leadership skills to ensure that the international assignments and tasks are allocated properly to the employees and they are even guided in the right direction for successful achievement of organizational goals and objectives (Brewster et al., 2016).  The local and international values along with international trade theories must be known to the international manager to create an useful strategy for the international markets and make the global business and human resource management successful and noteworthy. 

The employees might not understand foreign laws and rules including tax implications properly, which could threaten the international business scenario. The prices were not set properly due to the new global trading activities along with lack of ability to position a particular brand. Fluctuations in currency rate is another major issue in international business whereas the cultural differences and communication barriers also create difficulties for managing global business (Daley, 2012).

The most important approaches to manage human resources globally are ethnocentric, regiocentric, polycentric and geocentric approaches. The ethnocentric staffing enables to provide the most important positions in foreign subsidiaries with individuals from the  home country. Many expatriates of Foster’s Group are transferred to a foreign subsidiary in Australia. The polycentric staffing approach allows for recruiting the individuals from the host country while the regiocentric approach to HRM enables mixing up the foreign and local employees to work as an unit and create a good level of autonomy from the headquarter present at the home country. As the head of HR, I would consider the regiocentric staffing approach the most suitable for managing human resources internationally (fostersbeer.com, 2017).

Conclusion

The topic was concerned with the international human resource management where the three trends were technology, education and mobility along with the challenges including language and cultural barriers and even different trade rules, regulations and foreign policies. These challenges often created difficulties for management of global business properly and furthermore deteriorated the efficiency of managing recruitment and selection of the most appropriate employees and international managers within the workplace of Foster’s Group. As the head of HR, I had presented few  criteria for selection and management of international managers and approaches to IHRM to ensuring that the human resources would be manage properly and successful global business should be possible.

References

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