Impact Of Global Standardization And Localization Of HRM Practices

Possible impact of global standardization versus localization of subsidiary HRM practices

Discuss about the Human Resource Management Practices Determine.

It is evident that HRM practices determine or facilitate the easy operation of the organizations both in global and domestic market. Thus, the development of globalization leads to growing number of “Multinational Corporations”. Hence, these multinational organizations largely contribute to the development of the country in terms of economic growth and poverty. It is learnt that development of these organizations in the international business environment considerably relies on the extent of dealing with human resource because of its mobility as well as diversity. As put forward by Wild, Wild and Han (2014), choosing the skilled people who match with the right job should be the major goals while performing in the global environment. The multinational corporations in such nations could deal with the challenge of addressing the human resource. They could make decisions regarding the need of acting similarly with the parent organizations to take the position in international business to fulfill the local requirements. Furthermore, standardization versus localization can also be considered as the terminology which is more generally employed to refer to useful areas such as marketing as well as human resource management (HRM). The purpose of the report is to understand how this standardization and the localization of subsidiary impacting the HRM practices. The assessment of the report would also help to understand the complexity of cross culture differences with the integration of international human resource management.

As opined by Cavusgil et al., (2014), the standardization of Multinational corporations in this context is usually considered as the standardization of global subsidiary management practice to human resource management practices.  For example, the international franchise including McDonalds as well as Starbucks has developed their products and HRM practices across the country. On the contrary, localization is referred to the execution by international subsidiaries of the management practices usually implemented by the domestic organizations in respect to the host countries. In this context, Carroll and Buchholtz (2014) commented that most of the multinational corporations could localize promotion as well as the distribution practices in spite of having a global advertising strategy. Notwithstanding, Jeston and Nelis (2014) mentioned that to remain active or competitive in the globalized market, MNCs need to integrate these opposite approaches into one single and overall strategy. Consequently, the MNCs face the true challenge of management practices. Although, the global integration as well as the local responsiveness have largely been used to explore international HRM strategy and practices, there is a lack of intensive discussion on this context. It is observed that the distinctiveness of three Head Quarter models provided the organizations with an idea baseline to subsequently investigate HRM practices of six subsidiary group as well as to contrast those with the findings found by Head Quarter.

Convergence and divergence

The presences of globalization as well as the multinational organization have fired the dispute of convergence and the divergence since the last decade of 20^th century. Few decades earlier, the debate was only centralized only on the convergence in one side and divergence is contrary to the convergence site. However, they were further criticized because of its implication

Standardization and Localization- It is found out that when the debate of convergence and divergence is fundamentally implied to the macro level, the standardization, and the location are seen to be associated with the organizational level. Most of the multinational organizations are in the need of making decision about managing their subsidiaries on the basis of the host country’s principles or dealing with it by a different set and then determine which route is more suitable as well as efficient for them. As put forward by Papadopoulos and Heslop (2014), MNCs are considered as the tools that communicate globalization, administrative knowledge as well as separated best practices across the world. These multinational organizations could deal with the complication of intuitional aspects in host countries, which could offset the consequence of consistency. Conclusively, the debate of standardization as well as the localization focuses on the organizational and to the meso level, which is the middle level of macro micro level.  

Standardization and localization of HRM- In the current present days, HRM is one of the significant administrative aspects in globalization. As put forward by Brannen, Piekkari and Tietze (2014), HRM is at large competitive advantages because of the difficulty of imitating it. Thus, it is also observed that HRM practices have some unique traits and principles that cannot be neglected in standardization. Firstly, human resource management fundamentally depends on the national culture as well as regional characteristics of the nation. In addition, HRM is one of the aspects of prosperity in internationalization.

It is observed that as the social and economic structure of the country have become more familiar as well as dependent to each other understanding about how communication among humans are becoming critical.  The managers and the executives of large MNCs are expanding the operation worldwide, their operations need should include the entities in different regions as well as nations understand, and provide solutions to the human resource matters and needs. As opined by Warner (2014), few decades earlier, growing globalization as well as the growth of the new markets like China, Brazil, India and Russia as more keen rivalry among organizations at the international as well as domestic level, which has increased the concern in comparative human resource management. Research indicate that effectual human resource management is positively connected to the financial as well as organizational performance despite best HRM practices are there because of global and cultural differences which probably are not always transferable across the nations.

Differences in HRM practices among different culture

Therefore, it can be added that generalizing HRM practices might not be possible across different countries due to the differences in policies, laws and cultures. Similarly, differences in culture could affect HR roles across the borders. Undoubtedly, culture has a significant influence on approaching to deal with the people; thereby, the culture differences quest dissimilarities in management practices. It is identified that human resource management practices vary across the nations due to culture and dimensions. As put forward by Goetsch and Davis (2014), the human working in the organizations as well as each individual has unique personality with the distinct needs, behavior, beliefs and values. According to Wach and Wehrman (2014), culture refers to a set of necessary assumptions often understand, shared by the members of the community including the beliefs about the world as well as it works.

A significant strand of the culture perspective is based on Hofstede’s conceptualization of four distinct cultural value dimensions. According to Hofstede, the culture patterns are rooted in the value system of substantial grouping of the people and they could stabilize for long period. These notions are significantly necessary in analyzing as well as understanding managerial behavior and reactions (Armstrong &Taylor, 2014). Particularly, as culture differences are embedded in managers’ frame and guide the managerial actions and preferences. In other words, all national culture factors could be considered as the potential influences on how the managers make the decisions as well as perform their roles. Notwithstanding, Hofstede has also been criticized for the limited number of dimensions that fail to capture the richness of national environment.

Sources and mechanism of culture influences on HRM- In the context of understanding how national culture features influence organization in general and HRM in particular, the author highlight the fact that culture environment is not external to companies. The mechanisms of social control are widely related to the values as well as patterns of social relations as manifested within the organization. In this context, this indicates that organizations and environmental culture interpenetrate.

This technique of interpretation focuses on different sources of culture influences on the design as well as implementation of Human Resource policies and practice. As commented by Storey (2014), national culture is considered to be shaping its members’ core assumptions. The individuals could take positions in a particular culture socializing similar values and beliefs. On the contrary, the enduring character of culture could help continuously to socialize new generations of members and strengthen the predominant culture values and norms.

Cultural Framework in comparative HRM-Hosftede Culture dimensions

Employees relations are guided by human resource management professionals and the global environment could make it more complicated.  One of the major and significant decisions for Human resource management when an organization determines to run the operation in the global market is how the global environment operation will be staffed. Among many other, there are three main staffing strategies that come under HRM practices an organization could apply while getting into the international market with each having its benefits and disadvantages. These strategies are such as home-country national strategy. This particular practice of HRM hires the employees from the home country or the domestic market to live and work. These individuals are considered as the expatriates. Another HRM practice could be host-country national strategy, which indicates employing people who were born in the country where the business is running (Epstein & Buhovac, 2014). Similarly, the last one is the third country national strategy, which indicates the practice of employing people from an entirely different country from the home country and the host country. Benefits of these three practices have been discussed in the following.

Table 1: Ways to maintain equity and fairness amongst the parent country nationals and host nationals

Examining and justifying criteria for selecting preparing, managing and repatriating international managers

It is observed that managers in the international market must be able to adapt to change. These managers rely on the degree of culture toughness. As opined by Janssens & Zanoni (2014), many managers are seen to be thrilled at the beginning of their international assignment. However, after few months, a type of culture shock creeps in and they start to deal with the frustration as well as feel confused in their new environment. It is further identified that organizations could further investigate an increased number of characteristics to decide whether an individual is effectively adaptable.

Age, experience and education- It is observed that most multinational organizations tend to attempt for developing the balance between the experience and age. The younger managers are observed to be dealing the international assignment.  The younger managers usually become worldlier and have greater admiration of other culture than the people who are aged. On the contrary, the young people do not have much of management experience as well as technical skills. They have the scarcity of real world experience. Thus, in order to acquire the expected balance, many organizations prefer to deploy both young as well as seasoned personnel to the international market (Moran, Abramson & Moran, 2014). This should be the appropriate way of hiring the managers when it comes to operation in abroad.

Language training- It is identified that one well-known weakness of many multinational organizations is that they do not consider the importance of language training. It is evident that English is considered as the primary language of global business; thereby, most expatriates from all nations should converse English.

Skills and abilities of being a leader- This refers to the ability of influencing people to behave in a particularly way; thus, people are convinced. The organization would probably have to rely on this skills and ability, when they have to select the leader for international assignment. Further, it is necessary to determine whether an individual who is a skilled leader in the home country would be equally potential in an international environment. Nevertheless, when determining whether an applicant holds the ability, many organizations tend to look for the particular characteristics as maturity emotional stability as well as the skills of communication.

Organizational specific requirement- As put forward by Kulik (2014), HRM practitioner should determine the requirements of the organization before choosing an individual, host country need to stop sending the expatriates. The government of the host country is single party that issues the working permits as well as visas to expatiates. The legislation and the changes of the employment should be addressed and the expatriate should move to another nation with the family where the living conditions could be challenging.

Globalization- As the political as well as financial extent, globalization is considered as the technique of denationalization of markets, legal structure and politics, which is known as the so-called global economy. It is identified that globalization may involve the extension that could go beyond the national borders of the same industry dynamics and these can be operated for the centuries of financial activities dealt by humans.  This helps to learn that global trade and financial markets could be more integrated. It is further learnt that increasing globalization of business has its large impact on HRM in terms of issues of unfamiliar laws and language practices.

Diversity in the workplace- As opined by Armstrong and Taylor (2014), dimension of diversity in the workplace include age, ethnicity, gender, physical disabilities, race, sexual orientation, religious belief and many more. Diversity could be a major issue for the organizations especially for the people who have to go to the overseas operation. The future success of any firm relies on the ability to deal with the diverse body of talent that could bring innovate ideas, perspective and views to their work. It can be mentioned that challenge as well as the issues faced of workplace diversity could be turned into a strategic organizational asset if the firms are able to cap

Conclusion

On the completion of the report, it can be mentioned that as the markets have come dynamic in both local and global environment, the HRM practices should be developed based on the changes occur. On the contrary, international business could be affected when the home country and trading country are at war. Thus, if two nations are at war then there will not be any international trade between the nations. In addition, if the attitude of the host country towards the foreign investment is negative; the host country could impose specific rules for MNCs.

Reference list

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

Brannen, M. Y., Piekkari, R., & Tietze, S. (2014). The multifaceted role of language in international business: Unpacking the forms, functions and features of a critical challenge to MNC theory and performance. Journal of International Business Studies, 45(5), 495-507.

Carroll, A. B., & Buchholtz, A. K. (2014). Business and society: Ethics, sustainability, and stakeholder management. Nelson Education.

Cavusgil, S. T., Knight, G., Riesenberger, J. R., Rammal, H. G., & Rose, E. L. (2014). International business. Pearson Australia.

Epstein, M. J., & Buhovac, A. R. (2014). Making sustainability work: Best practices in managing and measuring corporate social, environmental, and economic impacts. Berrett-Koehler Publishers.

Goetsch, D. L., & Davis, S. B. (2014). Quality management for organizational excellence. pearson.

Janssens, M., & Zanoni, P. (2014). Alternative diversity management: Organizational practices fostering ethnic equality at work. Scandinavian Journal of Management, 30(3), 317-331.

Jeston, J., & Nelis, J. (2014). Business process management. Routledge.

Kulik, C. T. (2014). Working below and above the line: The research–practice gap in diversity management. Human Resource Management Journal, 24(2), 129-144.

Moran, R. T., Abramson, N. R., & Moran, S. V. (2014). Managing cultural differences. Routledge.

Papadopoulos, N., & Heslop, L. A. (2014). Product-country images: Impact and role in international marketing. Routledge.

Storey, J. (2014). New Perspectives on Human Resource Management (Routledge Revivals). Routledge.

Teece, D. J. (2014). A dynamic capabilities-based entrepreneurial theory of the multinational enterprise. Journal of International Business Studies, 45(1), 8-37.

Wach, K., & Wehrman, C. (2014). Entrepreneurship in International Business: International Entrepreneurship as the Intersection of Two Fields. International Entrepreneurship and Corporate Growth in Visegrad Countries, 9-22.

Warner, M. (2014). Culture and management in Asia. Routledge.

Weiss, J. W. (2014). Business ethics: A stakeholder and issues management approach. Berrett-Koehler Publishers.

Wild, J., Wild, K. L., & Han, J. C. (2014). International business. Pearson Education Limited.

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