In the current economy why do national variations in Human Resource Management offer particular advantages or disadvantages? Considering the current globalised economy companies have to deal with national variations in Human Resources Management to work effectively. That matter offers particular advantages and disadvantages. The current global economy is based on a free trade market and most of the time obeys to a capitalist model of doing business. Exchanges of goods, capital, knowledges and human resources are now established on a worldwide level. In the same time national variations in human resources management are observable and relevant when we focus on the culture of a country. Indeed national variations can have different nature as …show more content…
Schuler and Rogocsky (1998, p.10) suggested, "that national culture provides an important explanation for the variance in the utilisation of different compensation practices in different countries". This example shows the strong bond between national culture and his impact on HR practices and HRM. The apply of specific HR practices and HRM policy has to fit the cultural values to be effective in the work environment. Considering this fact, national values have a real impact on HRM that means national variations can influence HRM policy of a company in the global economy. Considering the current economy, national variations can offer particular advantages or disadvantages. The impact of national variations can appear in four main areas of HRM which are human resources practices, management and bargaining with trade unions, level of state involvement in the labour world, management of relationships between employees and managers. A national value turns into a disadvantage when this value does not fit with the global economy. On the opposite, if the national value fits with the economy it can be an advantage for HRM and the business strategy of the company. A national variation between two countries becomes an advantage or disadvantage when it promotes or prevents the adaptation of the HRM policy of the company to the current economy. HR practices are in some extent adapted to national variations in order to fit employees needs. Schuler and
For example, in either recruit policies or retain policies of Coles, the Fair Work Act must be considered. The second factor is the condition of whole economy such as Inflation, change in pay rates and salaries. During the inflation stage, the increasing living cost will cause higher demand of income to satisfy the living standard. So, now it is the time to change reward system to be more effective. Meanwhile, the change of pay rates and salaries can affect the HRM as well. The third one is social factors such as different cultures of employees. For instance, when an US company operates a division in India, the HRM should be different than America's to ensure all employees with different cultures can work well together. The fourth factor that can affect HRM is technological change. High-quality employees must be skilled in the latest technological devices because it can improve the efficiency of work and help the achievement of the organization's goals. As a result, it will affect the organization's recruit policies. The fifth factor is that can affect HRM is environmental factors such as harsh weather conditions or greenfields. For Coles, if a supermarket operate in a greenfield area or in a harsh weather conditions, the recruit and retain policies must be changed to attract more people to work there.The last factor is legal which means any laws that can affect HRM. For example, the minimum wages set
International human resource management differs from human resource management in a domestic setting in which of these ways?
This report examines cultural and institutional factors of Mexico and how they can impact global HR management and practices. Specifically, by analyzing Mexican culture based on Hofstede’s dimensions, economy, labor legislation, union and employment tradition we reached the conclusion that the features of Mexican culture (high power distance, strong collectivism, high level of masculinity and uncertainty avoidance) and institutional factors have a strong impact on management styles and HR practices of business in Mexico and may arouse some challenges for global company and their expatriates, especially those from countries that bear different cultural features and institutional conditions. In order to minimize the potential conflict between Mexican local employees and expatriates, parent companies need to provide trainings (culture assimilation, country condition, etc.) before sending anybody to Mexico. Also, whether the expatriates should put more effort to disseminate home country (headquarter) culture or to adjust to local culture depends on the company’s strategy in terms of being localized or standardized around the globe.
It is hypothesized that cultural differences in behaviour will mean differences in HRM practices within different cultures but those within the same cultural cluster will be similar whereas those in different clusters will be dissimilar. Employees and managers from different cultures take decisions in different ways – the processes, behaviours and values are not the same. People have different value orientations as a result of individual psychology, life-stage and generation and assumptions about behaviour determined by cultures are linked to a variety of organisational behaviours.
If a company were to send employees to the above named different countries from the USA to make pay scales in the companies based within the foreign country. The USA employee would want to take into consideration that the other countries pay their employees different rates and the amounts of cost of living in the countries when it has high cost to live places the pay rate would have to be higher than when cost of living is low. You also have to look hard at pay scales already in place in those countries. The above data was all done on average cost of living. You can either do it for less than average or higher and is the exchange rate s lower than in the USA you can afford to pay a little higher to attract employees. HRM must consider the laws n each and every country first. The laws for every country are different and labor laws are most important in following then make pay scales by the cost of living in each.
While there are many various global issues that affect the International Human Resource Management to run efficiently, there are two key concepts that play a major role in understanding how to approach them with cohesive and a well coherent strategy; they are the International Human Recourse Management Strategy and Understanding the Cultural Environment. In the International Resource Management strategy, many companies will do their research in finding companies that offer the
Dowling Peter J and Welch Denice E and Schular Randall S(1999), International Human Resource Management, South-Western College
In an era of increasing competitiveness, globalization, economic rationalization, deregulation, technological revolution and changing workforce there is an ever-increasing need for human resource management to be able to capitalize on the special challenges that this changing environment brings. For a company to be able to successfully keep ahead of the competition, human resource management is seen to be a significant contributor.
Managing HR in MNC is different from the way the HR is being managed in the country, According to Morgan (1986) there are three factors that differentiate between IHRM and domestic HR: First, the countries of operations such as the -country where a subsidiary may be located, the host-country where the subsidiaries are located, and other countries. Second, the different types of employee, in international environment the HR management have to deal with the host-country nationals (HCNs), expatriates or home-country nationals (PCNs) and third country nationals (TCNs), for example if L’Oreal hired an Indonesian employee in their Indonesian subsidiary the employee is a HCNs, and when manager from L’Oreal Headquarter in France came to work in Indonesian subsidiary the manager is a PCNs, and if L’Oreal employs manager neither from Indonesia nor France to work in their Indonesian subsidiary the manager is TCNs. Third, is the way HR practices (eg. staffing, compensation, training, and etc) are conducted. Although IHR practices seems to have the same activities as domestic HR, in IHR the manager will be dealing with different environment and diversity of employees from different cultural background. Moreover, as mentioned earlier dissimilarities between domestic and international HR management mostly due to profound differences between host and home countries in term of culture,
Increased business globalization, emergence of new economic hubs like BRIC countries (Brazil, Russia, India and China) as well as more intense competition among organizations at the domestic and international level alike over the past two decades, have necessitated the need for studies in the comparative Human Resource Management (HRM) (Budhwar & Sparrow, 2002a). As a result, a growing number of conceptual (Aycan, 2005; Edwards & Kuruvilla, 2005) and empirical studies (Bae, Chen, & Lawler, 1998; Budhwar & Sparrow, 2002b; Easterby-Smith, Malina, & Yuan, 1995) have addressed the configuration of HRM in different
Abstract: Human Resource Management is fast gaining popularity and its importance is becoming unavoidable, this is due to the fact that Human Resource Management plays a huge role in the growth of any company irrespective of its size. Unfortunately it is yet to achieve global standards or strategy of operation; this can be attributed to the various differences between environmental factors, employment attitudes, cultural
Briscoe D., Schuler R., Tarique I., (2011). Internatonal Human Resource Management : Policies and Practices for Multinational Entreprise.
In this changing world, our global business theories and literature have implications toward the future. The future of this growth and success depends largely on the key component which is Human Resource Management. So, we as researchers hope to enlighten and inform you as employers the significance of an effective solution that both understands your employees and is beneficial to your company. That is why we offer our recommendations in the end of this article based on our findings.
Globalisation, as an integrated and independent world economy, has contributed to the rapid expansion of international trade and world’s economic growth (Paik & Vance, 2006; Mutsuddi, 2012). The increase presence of global firms is shifting domestic HR towards global HR in addition to carry out a wider span of HR responsibilities (Losey, Meisinger & Ulrich, 2005; Rao, 2010; Jie, 2011; Mutsuddi, 2012). The generation of cross-border labour market also had brought human resource management into an international context (Mutsuddi, 2012).
Globalization refers to the interconnection among countries, politically, economically and culturally. Globalization has come into existence due to the following factors: (i) betterment in transportation and communication, (ii) human and capital mobility, (iii) increasing formation and existence of NGOs and multinational corporations.