IHRM Cross Culture - 2

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International HRM in Cross-Cultures:

International HRM in Cross-Cultures

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INTRODUCTION The globalization of business operations in cross-cultures is having a great impact on managing human resources. Under this topic we shall discuss different aspects of human resource management in global context: Concept and importance of International HRM Role of International HRM Limitations in growth of International HRM Focus or trends in International HRM practices which multinational organisations are adopting to succeed in diverse cultures across nations.

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Meaning International HRM which deals with practices of managing people on international scale, has got attention of enterprises operating globally. IHRM examines policies, decisions, issues, challenges and trends in managing a global workforce. Peter J. Dowling and his associates have “concluded that the complexity involved in operating in different countries and employing different national categories of employees, rather than any major differences between the HR activities performed.” International HRM basically involves HR activities of procuring, allocating and utilizing human resources in international business.

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Role of International HRM International HRM is the basis of success of any global multi-national organisation International HRM enhances employees effectiveness to achieve goals of the organisation and meet the needs; To develop employees to assume more diverse tasks, assignments, face challenging situations, and Better understand cultural variations across nations. In this context the role of International HRM department is considerably enhanced as it has to deal with heterogeneous functions.

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International Human Resource Department has to give additional focus on various aspects such as: More involvement in the employee’s personal life; Deal with different groups of employees, namely, parent country nationals, host country nationals and third country nationals, for which HR policies and practices may differ. IHRM managers have to understand cultural differences, i.e multi-cultural environment; Manage external influences, i.e. host government authorities, business and other interest pressure and labour groups, etc. Lay different emphasis on management training to deal diverse workforce, their orientation and to meet international environment; and Provide guidance on taxation and compensation aspects.

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Limitations in Growth of International HRM In view of above reasons, planning a strategy in International HRM is important keeping in view host country practices and government legal requirements. It is recognized that HRM and industrial relations practices differ across countries as these have their historic origin in countries. Personnel Management and Industrial Relations are embedded in societal rules, norms, values, ideology and no MNC can afford to ignore the influence of local culture .

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Personnel Management is influenced by multiple ‘policy centers’ such as trade unions, employer organisations, participative bodies, government authorities and environment context. The environment is made up of three tightly interwoven contexts, i.e., The technological features of work situation; The market opportunities or limitations; and Relative distribution of power between the actors, i.e. trade unions, employer associations and the Government.

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Focus on some Human Resource Management Practices Shift to Recruitment of Host Country Nationals One of the four approaches are used for recruitment by the MNCs: Ethno-centric – Key positions held by citizens of home country. Poly-centric – Primary positions are held by nationals from host country. Regio-Centric – Primary positions are by people from countries with similar cultures, experience and management practices. Geo-centric – Best qualified individuals are hired at home and abroad regardless of nationality, treating world as market to implement global business operations.

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(b) Expatriate recruitment and factors for their adjustment and success in host country. This aspect is covered in detail in a separate topic. (c) Cross-cultural Training As part of pre-departure training of expatriate managers, an area of focus is cross-cultural training . The goal of cross-cultural training should be to equip the managers with knowledge, skills and attitudes which enable them to achieve the following adjustments and effectiveness which are indicators of international success: Managers to be personally adjusted, i.e. they feel happy and satisfied with situation abroad, Professionally effective if they perform their tasks, responsibilities on-the-job competently, and Inter-personally adjusted and effective and they take interest in interacting with locals capably.

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Example: Pre-departure training, says Peter J. Dowling and his associates that “It can prevent costly mistakes such as that of the highly paid expatriate who brought two miniature bottles of brandy with him into Qatar (a Muslim country in the Middle-East). The brandy was discovered by customs, and the expatriate was promptly deported and ordered never to return”.

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The six competencies needed in a specific country can be drawn. The six competencies that were perceived, recently in one study, as being most important for success of global managers (in descending order of importance) are: Leadership, Initiative, Emotional Stability, Motivation, Ability to handle responsibility, and Cultural sensitivity In another study, in addition to the above two more highlighted are: to handle stress and flexibility