Internal and external factors in International Human Resource Management and Domestic Human Resource Management
International Human Resource Management conducts the activities of managing the staff of the organization across the international borders and according to the needs and requirements of the respective countries (Bratton et al. 2021). Domestic Human Resource Management is the process under which the activities are conducted to manage the staff in the organization within the boundary limits of a country. The report will explain the external and internal factors involved in the This academic essay will discuss the activities conducted for managing the staff of the organization in the domains of International Human Resource Management and Domestic Human Resource Management. Moreover, the essay will demonstrate the basic understanding of Hofstede’s Cultural Dimensions Theory and the dimensions involved in the process. The essay represents the mentioned dimensions under the theory and the applicability of these dimensions in today’s world.
Domestic human resource management is a process under which the staff or employees of a company is managed on the national level. The activities of Human Resource Management in DHRM are conducted in one single territory, and it is limited to that particular area only (Cieri, Sanders and Lin 2022). Whereas International Human Resource Management is the process that conducts the activities on the international level and manages the human resource of a multinational company operating in different parts of the world. IHRM is a broader perspective on managing a company’s staff as its major purpose is to achieve the organization’s objectives and the aim of the employees. There are notable differences observed in conducting the activities of domestic Human Resource Management and international human resource management in every part of the world (Kim, Vaiman and Sanders 2022). The differences in IHRM and DHRM demonstrate the methods conducted in both situations for effectively managing the organization’s staff. One of the most significant differences between IHRM and DHRM is the size of activities conducted for managing the company’s staff. The activities conducted under IHRM are large in volume, increasing the number of activities managing the organization’s staff. On the other hand, the activity conducted under DHRM is limited to a particular place that decreases the volume of activities conducted (Hamid, Muzamil and Shah 2022). For example, if an employee is assigned a project of an international company, additional training is provided to that employee, increasing the number of activities conducted for the staff. The training provided to the staff includes skill development and training about the project assigned to that employee. One more difference in the activities conducted under IHRM and DHRM is the divider perspective while making decisions for the company (Bratton et al. 2021). As the volume of activities is large in the case of IHRM, it is a higher probability of making crucial decisions for a wider area.
There are various factors involved in making major decisions for the staff of the company in the IHRM. On the other hand, while making decisions under DHRM, very few factors are involved as the decisions are for a particular place and low in volume. For example, while finalizing a project on an international basis, it is important to consider the cost and language barriers during the process (Vrontis et al. 2022). Moreover, in the activities of IHRM, the decisions for staff are made in different locations of the world, making it a more difficult job to complete. Another significant difference between the IHRM and DHRM is the environment with the employees in the organization at every level. In the case of IHRM, the employees are sent to different world locations. The human resource manager has to maintain personal contact with that employee to ensure safety and security. Due to this, the level of interaction and environment in the personal life of the employee is high in the IHRM compared to the DHRM (Anjum, Ming and Puig 2022). In the case of DHRM, there is not that much need for involvement in the employee’s personal life because of domestic decisions to be made for that employee. For example, suppose an employee is sent to work in a different branch of an organization across international borders. In that case, it is important to know every tiny detail about that employee to ensure his safety (Boxall and Huo 2022). On the other hand, in the case of DHRM, the employee remains inside the national borders of the territory because of which only adequate information is required of that employee. One more difference between both the methods of managing these staff in the organization is to handle the change in the employees and their behaviour at the workplace. Under the IHRM, the methods implemented for changing employees involve international activities that make it difficult compared to the DHRM (Zhang, Wang and Jia 2022). For implementing change in the organization and in the employees’ way of working, the nationality of the employee matters and plays a significant role. In the case of DHRM, the operations are conducted in a particular territory and inside the national borders, due to which the change in the employees becomes easy. On the other hand, under the IHRM, the activities for bringing change in the employee in the organization are conducted according to the values and cultures of other countries in the world (Omidi and Zotto 2022). For example, suppose an employee is working in a foreign country, then for bringing a change in that employee’s way of working. In that case, the management has to consider the values and beliefs of that country and that organization.
Differences in activities conducted under IHRM and DHRM
There is one more difference that is observed in the methods that are used under DHRM and IHRM in the organisation. The difference observed is the risk involved in implementing the policies for managing the organisation’s staff under both methods (Sinha, Patel and Prikshat 2022). Every policy and procedure implemented in the organization worldwide involves some amount of risk that affects the personal growth and development of the employee. The risk involved in the implementation acts as a barrier end slows down the growth and development of the organization to achieve the objectives. In the case of IHRM, the risk involved in implementing strategies for employees in the organization includes political and economic risk in the international market. While implementing these strategies in the international business, for making significant decisions in human resource management, social and cultural risk slows down the process (Hu et al. 2022). On the other hand, the risks are also involved in these situations arising in DHRM, but it is of low volume. The risk observed in the international business also includes protests from the employees towards the organisation’s top management and restrictions from the government of that particular country where the business is established. For example, while making crucial decisions for the organisation’s staff, the human resource manager should consider the risk involved to avoid any conflict between the employees and the citizens of that country (Anjum, Ming and Puig 2022). Lastly, the difference in conducting the activities under IHRM and DHRM is about the external influence on the implementation of strategies on the staff of the organization. It is seen that when a business enters an international market and expands its operations into other countries, it faces a lot of criticism and appreciation from external factors. These external factors influence the company’s decisions and create barriers to implementing the strategies for the organisation’s staff for the human resource managers.
Moreover, the business faces many environmental and legal issues in the international markets. On the other hand, the activities conducted under DHRM face comparatively less external influence due to the limitation of boundaries in a particular territory (Swanson 2022). The changes implemented for the organisation’s staff are also confined to a limited space that reduces the external influence on the company’s operations. For example, suppose a company has its operations in other countries. In that case, the decisions made by the headquarters of that company are influenced by the external factors happening in the respective countries where the company is operational. The external influence is from political, legal, social, cultural, and economic domains. All the external influence factors modify the decisions of the company guitar made to improve the activities conducted by the staff of the organization.
Hofstede’s cultural dimension theory is developed by Geert Hofstede that demonstrates the cultural values among the organisation’s employees while working towards a common goal. The theory represents and explains the role of behaviour and the cultural values involved in the employees at the workplace (Pizzi et al. 2022). The theory’s major purpose is to establish a framework for improving cross-cultural communication and avoiding conflicts among the employees while working. Some significant parameters are used in implementing the half seeds cultural dimensions theory. The parameters involve methods in techniques used to evaluate the behaviour of the employee in the organization and at the workplace. In theory, the valuation is done using the power distance index, which is considered a tool for effectively completing the process before time (Sent and Kroese 2022). According to the situations among the employees in the organisation, the power distance index is divided into two domains: low power and high power. A high power distance index helps to conduct the activities for the organisation’s staff that involve respect for other employees. This theory also helps to identify the differences between the cultures and values among the dimensions that creates an advantage to the human resource manager in the organization (Khan et al. 2022). The differences identified in the cultural of the people are analysed to improve the managing operations in the organization.
Significant differences between IHRM and DHRM
On the other hand, the low power distance index helps improve the organizational structure by including cultural beliefs among the employees at the workplace. Another parameter considered under the theory is the uncertainty avoidance index. This parameter is majorly used to avoid risk and uncertainty in the organization while implementing the Strategies for the staff. While implementing the change in the way of working of the employees in the organization through this method avoids conflicts among the employees (Kaasa and Andriani 2022). For this purpose, the organisation frames script rules and procedures for the employees to increase the effectiveness and productivity at the workplace. It develops a high tolerance for uncertainty and risk-taking abilities among the employees in the organization. Another aspect of the theory is about the long term and short term orientation sessions provided to the Employees in the organization (Andriani et al. 2022). Under this method, the theory helps the employees in the organization to think about their future in the longer term.
Moreover, it helps set a long-term vision and mission for the company and frame its objectives. The theory helps the employees teach the attributes of perseverance and persistence at the workplace to increase the effectivity and productivity. In the short-term orientation process, the major focus is on the short-term goals of the employee and the company that are achievable in less time. The result is expected to be quick in the case of term orientation as it is to be completed in less time than the long term orientation of the employees (Neves, Almeida and Vieira 2022). Another significant factor under the theory is the indulgence and restraint among the employees at the workplace. Under these domains, the theory understands the culture and behaviour of the people in the international market to implement policies most effectively. Indulgence refers to a society where people lead a good life without stress and anxiety. At the same time, restraint represents a society with people bound by the regulation of laws and social norms (Stephen 2022). This theory uses both domains to implement change in the organization according to the external factors in the international market. Masculinity and femininity are also considered the aspects under the theory for observing the cultural change in the environment of the international markets. Muscularity refers to the characteristics of the people, such as gender roles, and it majorly focuses on materialistic achievement and growth. This theory also demonstrates ways to conduct the activities for international management and international marketing
Moreover, masculinity refers to the rough and tough situations among the people of that respective country. Only the other hand, the concept of femininity refers to the quality of life that the human resource manager observes before implementing the policies and procedures in the organization (Leonaviciene and Burinskiene 2022). Due to this reason, the difference in the nationalities and the cultures of the people are analyzed for the effective implementation of the policies and strategies in the organization.
As the cultural difference among the people worldwide is increasing every day, Hofstede’s cultural dimension theory plays a significant role. All the dimensions mentioned above under the theory are applicable in today’s scenario of the world and conditions in the respective countries (Sent and Kroese 2022). Moreover, as the competitiveness in the business is rising at a rapid rate, the need for implementing policies and procedures under theory is important. The dimension of the power distance index is also used in business studies to guide the team members and complete the group task effectively. For example, in Malaysia, the power distance index is very high. The team members weigh their managers’ orders to complete the task and achieve the organizational goals (Pizzi et al. 2022). Another dimension under the theory is individualism, and collectivism is also applicable to some of the central relation countries in today’s world. Countries such as Panama and Guatemala include citizens who believe in collectivism instead of individualism. This country has a very low score under this theory dimension and needs some improvement. For example, while implementing the marketing campaigns, the organizations in that country have observed that people are more inclined toward the collectivism in their community. The marketing campaigns or Digital campaigns that focus on the name of their community are more appreciated than the individual campaigns.
Handling change in employees and their behavior at work
Another application under theory is about the dimension of muscularity and femininity in the international market. For example, in today’s world, applying this dimension in Japan is difficult as it is based on a patriarchal society and has a very high school in this dimension (Saleem et al. 2022). This dimension makes it difficult for the female team members at the workplace and creates a barrier to their personal growth and development in the organization. In Japan, the structure is followed strictly, and rules and norms are considered a very strict pattern in the organisation’s framework. On the other hand, some European countries such as Sweden, have a very low score in muscularity and femininity. In this country, the values and beliefs are based on the feminine society. All the issues in challenges are solved through the discussions among the team members in the organization (Vos and Boonstra 2022). In this condition, the female team members are given opportunities to showcase that talent for contributing to the team to achieve the organizational objectives. The next application of the dimension under the theory is about the uncertainty and risk involved in implementing strategies in the organization. Under this dimension, the countries with high scores include the people who consistently control their lives for particular tasks. The countries with low scores involve more relaxed and stress-free people from work. For example, in today’s world, this dimension is applicable to many countries as the demand for production services increases the economy, increasing the employees’ work activities (Omidi and Zotto 2022). For example, in European countries like Greece, the score of the uncertainty avoidance index is very high, and on the other hand, in the countries Singapore, it is very low. Another dimension of the theory includes the application of indulgence and restraint attributes among the people while making a change in the organization. In today’s world, it is applicable in the countries where the leaders of those countries follow the socialistic ideology (Anjum, Ming and Puig 2022). For example, in Russia, the indulgence and restraint index score is very low due to the recent culture followed by the citizens and the country’s government. In Russia, the gratification of the people is suppressed most of the time. The people’s behaviour is regulated consistently by introducing strict policies in the economy by the government. Due to the Sweat norms implemented by the government, the citizens of that country fail to open up and showcase their talent in the international and domestic markets (Boxall and Huo 2022).
From the above discussion about international human resource management and domestic human resource management, it is concluded that there are various factors involved in implementing the strategies in the organization. It is observed that the activities conducted under international human resource management are more complex than in domestic human resource management. The activities in the international market require more effort by the human resource manager according to the values and beliefs of the respective countries. On the other hand, the activities conducted in the national boundary open organisation require fewer human resource managers’ efforts to implement the change in the organisation. The discussion also mentions Hofstede’s cultural dimension theory, which explains the different dimensions in which different cultures of the countries are analysed. The dimensions under the theory use different methods to observe the cultural differences among the people in the international market for implementing these strategies most effectively. Moreover it provides the cultural framework to examine the values and beliefs of the employees and the citizens of the respective countries. It also provides a basic understanding of the applicability of the dimensions of the theory in today’s world and the businesses there are expanded in other parts of the world. It explains the role of these dimensions in influencing the decisions of the organisation according to the cultural values of the respective countries where the organisation is being established.
Risk management in IHRM and DHRM
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