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INTERNATIONAL HUMAN RESOURCE MANAGEMENT

EXAM Essay Question

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2/4 questions

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1 question lecture 1-5, 1 question on 6-10

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Use book chapters and articles

Core Reading… Harzing, A-W. and Pinnington, A. (2015) International Human Resource Management (4th Edition) Sage, London Plus specific articles per session

TWO PERSPECTIVES -

HRM STUDENT: More org-level, qualitative, macro level forces WORK PSYCHOLOGIST, more individual-level quantitative, perspective of individual

70’s/80’s/90’s -

Parent country nationals – Host Country Nationals – Thrid Country Nationals What would be the best practices for procuring, allocating, utilizing HR in other countries?

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Producing abroad, generally using wester perspective 1990’s using virtual technology

SINCE THE 2000’S -

Stagnated foreign investment

Decline of the MNC’s 1. Trend towards localizing production, supply chain and mgmt., catering the local mkt. Increase in working abroad, decrease in FI 2. Global digital and intellectual property, minimal foot print MNC’s (Google) and franchising. Platforms that don’t need populous country= increase in franchising 3. Small local firms using e commerce, to promote their products (Alibaba). Digital platform cutting out MNC’s C2B and B2B

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New Challenges -

Increase Global Migration 244m international migrants representing 3.3% of global population

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65 million people displaced by conflict, violence and human righs violations of which 21.3m are recognized as refugees and registered asylum seekers

Brexit

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Uncertainty about where/what will happen to EU workers

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Impact on UK jobs opening offices abroad, will the be replaced?

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Retention of employees, how can you make sure you can keep them. Lot to ask people move

Do different cultures work together well abroad.

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Problems large areas relating to each other

DIFFERENT APPROACHES TO IHRM Can’t always transfer best practice…

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Legistlation= workers council

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How important HRM in countries

The Matching Model: Tichy et al 1982 Characteristics

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Hard Model of HRM Highlights resource aspect and have a tight fit with org. strategy and structure.

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On surface is similar to scientific management as promotes ‘best fit’

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Similarities to Galbraith and Nathanson who link different personnel functions to org stgy and structure

Contributions

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HR is significant for achieving an organizations mission Illustrates the importance of HRM for an organisaion

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Company aims for tight control over performance systems to secure competitive advantage (guest 1995)

Limitations

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Fails to acknowledge complexities within firms, such as company politics, culture and power Assumes HR can be matched easily to business strategy, underestimates difficulty of having a reciprocal relationship between the two

Harvard Model: Beer et al 1984

Characteristics

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Broads classification of the content of HRM and the different levels of outcomes More soft characteristics and human HRM i.e employer-ee relationship (zhu et al) Interests of different stakeholders in the organisation and links their interests with the objectives of management

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People is the most important asset

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bBroader area of focus than ‘hard’ and aims to increase human satisfaction High co*mmitment work system (Walton) HRM is a series of policy choices:

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HR flows (selection, appraisal, development and outflows)

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Reward system

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Employee influence (TU and work council)

Work ststem

Outcome = commitment, competence, congruence and cost effectiveness Contribution

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Good for comparing between countries. Range of outcomes at indiv, org and societal level (poole 1990)

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Encourages holistic thinking about skill supply, drawing attention to skill as an important concept (Hendry and Pettigrew)

Limitations

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Does not really explain the relationship between stgc. mgmt. and HRM (guest)

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Descriptive not prescriptiveand doesn’t predict relationships between HRM policies and outcomes

Contextual Model: Hendry & Pettigrew 1990 Characteristics

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E.g. Brexit, politics Pays attention to hard and soft factors, outer and inner context

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Argue links between PESTLE(outer) and inner (culture, structure, leadership, task tech and business output)

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Past information related to org dev/mgmt. of change is essential (sparrow and Hiltrop) Organisations may follow different paths to achieve positive results and no straightforward flow from business stgy to HRM (budhwar and debrah)

Contributions

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Changes in HRM conceives as a response to strategy, scope of HRM function to respond effectively depends on context. 2 firms facing same external circumstances may not respond in the same way and HR remain different

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Can be used for detailed contextual analysis and case study research

Limitations

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Danger that HR is the outcome and driven by firm performance

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Does not pay attention to different interests of staff and management Lagged response can complicate relation of HR and context

5 P Model: Shuler 1992 Characteristics

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MNC more interested in HRM due to globalisation

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Looks at policies/philosophies

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Whether categorised as stgc or not

How do policies/practices differ Combines HR with strategic needs depends on: if HR activities are linked to stgc needs of business/operational needs or if they occur LT or ST or if they focus on snr mgr or non snr employees

Philosophy- makes statements to define values and culture Policies- shared values and guidelines for action

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Programmes- articulates HR stgy for coordinating effort and facilitating change to address people related business issues Practices- motivates needed role beh, e.g. leadership, managerial and operational roles Processes- defines how HR activities are carried out Contributions

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Shows interreletadness of activities that would usually be treated separately

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Provides understanding of interaction between stgy and hrm (adler) Demonstrates influence of internal and external characteristics

Limitations

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Overprescriptive and too hypothetical, difficult to implement (budhwar and debrah) Interest to scholars, but limited application for mgmt. practictioners HRM managers who have not had to align hr activities with stc needs will find process takes time and developing understanding requires extra effort

European Model: Brewster Characteristics

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A single universal model of HRM doesn’t exist

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Constrained (a) at international/national level by culture and legistlation (b) at organisation level by patters of ownership (c) at hrm level by tu involvement and consultative arrangements

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Need for more comprehensive understanding of role of different players and testing applications in the international environment

Contributions

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Enables analysis of HRM at a broader geographic/continental level. Better understanding of EU External factors became part of model rather than external, reveals diff in hrm between nations and across clusters, can provide understanding of MNC may attempt to adopt/reject local practices

Limitations

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Large diff between countries with more labour regulations (Scandinavian and german) and countries that are comparatively less regulated (UK). Exists considerable variety across EU model and even within clusters.

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Studies argued diff in HRM may be due to factors not included, e,g, skill level and available qualifications and employee participation in HR

Integrative IHRM Characteristics Relects HRM transfer on international level is contingent on invervening factors from 3 broad sources:

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COO effect

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Firm characteristics

Host political/legal/economic and socio-cultural environments

Contributions

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Integrates intervening factors impact on IHRM from evans, schuler, paauwe ad taylor

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Model indicates differential impact of intervening facotros or IHRM

Limitations

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Developed from thoeries in western context Model not been widely tested in other transforming economies (except chines) (Shen 2005)

Implications of HRM Models 1. Primarily anglo saxon which could be inappropriate for toher cultures 2. IHRM has expanded beyond mgmt. of HR to include strong connection with stgy, regional integration, cross cultural manage,ent, knowledge management. 3. Many factors affect HRM

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Comparing 2 Western Model: Matching v European -

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HRM in eurpoe has historically different legislations, institutions, organizational structures European organisations are constrained by national cultures & legislation, organizational ownership structure and TU involvement

BEST PRACTICE IN HRM -

Personalised benefits

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Knowledge of who to talk to

Company that cares Inclusive and easy access

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Appreciate work life balance

Global level…

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Use virtual/tech

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Use range HRM from different cultures Listen to ideas Good country HRM can attract workers to that country and v/v

IHRM CONCEPT Explores complexity in HRM caused by different operations and mix of cultures IHRM: Administration/development of HR policies (staffing/evalution/training etc) in international context, with each having its own PESTLE characteristics

IS IHRM MODELS APPLICABLE TO OTHER CONTEXTS -

Is hrm becoming more uniform as business becomes global Will hrm remain distinct in different regions Differences increasing or decreasing?

Universalist View -

Globalisation/internationalization/technology push towards monopolization ‘winner takes it all’ (kerr)

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Competition/mkt development encourage international companies to adopt ‘best practices’ to survive and compete  Matching model of HRM

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International best practice suggests proactive mgmt. strategices mean a search for transnational solution. Fun work environment slide, try to emulate global leaders (Bartlett and ghoshal) = isomorphism

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Globalisation will cause similar staff hrm policies and relations with stk (whitley) Universalist ‘one best way’ creating solutions of best fit= matching model. Greater convergence in mgmt. approaches (Rowley et al 2004)

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Contingency v Divergence -

Globalisation/internationalization have increased cultural diversity, need to fit HRM to local conditions (rejecting best fit) (Delery and Doty)

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5 P/ contextual model- right mix of HRM depends on complex variety of critical environmental and internal contingencies. Under contingency view, international org should constantly adjust IHRM stgy to fit with internal/external factors

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Difficulty applying NA matching model to Europe

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Competiive, changing env can limit case for one best way- may be factors pulling in contradictory

consider host country variables, internal factors (lifestyle) or HRM fit/influence on subsidiaries

directions e..g towards greater globalisation but placing new restrictions on trade to protect employment

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Capitalist industrialised economies have developed at diff speeds in different economies

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Different levels of capitalism combine with societal institutions to create different IHRM The ways different internationalisation occurs is path dependent and replects historical legacies and current instituaiton linkage (whitley)

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Asia: distinct and homogenous, ahave own integrated business systems. Significant varaitions in how firms in asia operate.

Crossvergence and hybridisation -

Crossvergent approach the most realistic?

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Evans argues that org need to be effective at standardisation and differentiation (hybrid localisation)

Hybridisation of mgmt. approaches – other culture concepts are integrated with indigenous ones Zhu et al: East Asia: hybridisation has occurred. Maintain indigenous mgmt. value and practice while being adaptive and flexible to good practice developed in other countries

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Challenges contingent approach and helps overcome tension and contradiction created by western HRM

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Continue to see existence of flobalisation and localisaiont

JAPAN 360 FEEDBACK Popular in US and EU Multi stakeholder feedback In Japan: 150 workers found ‘masculine’ culture played a role in acceptance/willingness to participate in 360 feedback

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In supportive org, lack of willingness to be honest in feedback

WHICH FACTORS AFFECT IHRM INTERNATIONALLY? -

Differences in institutions Differences in cultures

Institutional Theory -

Coercion and imitation

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Norms and expectations shared by members influence how org should be structured and mgr beh that is legit (meyer and rowan 1977

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Hall and soskicse: society with complementaries amoung, mould institutions of CG, mgmt. practice, inter firm relations and labour mkts

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‘varieties of capitalism’ framework applied to asia (Vietnam: truong and Rowley)

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Organisations seek approval by local govt, social networks, regional economic policy

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Bangledesh

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Social forces can act as constraing on degree of internation transfer when MNC adopt local institutional norms/rules for companies

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Hoffman states HRM model mnc adopts is a choice among narrowly defined set of legitimate options

Market, culture history shape of institutions Worldwide corruption levels

Corruption -

Distorts business processes Affects how managers can carry out their business

Study… Frisenbichler & Selenko

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Study among 413 firms and their managers

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Regional culture

Work engagement Corruption at regional level Firm performance (labor productivity)

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Corruption at regional level with more supportive leadership culture  individual managerial factors mattered more

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How does corruption affect performances, affected by regional context, managerial performances weaker

Cultural Approach -

National culture affects HRM (Hofstede) Cross country diff can be understood in terms of national culture differences and its manifestations in history, regulations, political systems and socialization

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Cultural distance of the host country from the home country can create difficulties for MNCs

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Traditional philosophies embedded in Asian societies make transfer of management practices difficult (?)

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National differences collectivism and orientation to providing/protecting employees suggest larger raises in asia than in US (Gully)

Affects decision making, communication styles, concepts of ‘best’ management practices

2 opposing trends: 1. Clear cross country differences that can be explained through history, regulations, politics or socialisation. 2. Cultural distance from home country can create problems for MNC’s adapting to a host setting because change in decision making, communication, personnel practices and concepts of mgmt. practice is different

Implications of Change for IHRM? Asia:

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strong influence on process of change (NA approach) the more dependent on foreign capital and MNC’s (e.g. Thailand) the more wester HRM will be adopted i.e. individualist values

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Different from rewards in most Asian firms ‘iron rice bowl’ policies in china and seniority based wages in japan

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Economic restructure in east asia led relocation of some processes from developed to developing countries. This liberalisation created more opportunity for domestic to adopt J HR practice thus key hrm practice (individualstic) have become more apparent in east Asian approaches to hrm

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China and Vietnam undergone period of economic reform and change in people mgmt. systems

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May be opposed by culture and institution. E.g. Asian emphasis on hard work/elder respect/strong

State led development modernised labour market in asia (rowley) Factors can generate resistance buerucratic control and inertia in japan rowley et al ties means difficult to transfer

Evolution, reform and transformation have different implication for HRM as no homogenous universal approach. There is no one best way.

SUMMARISE •

International HRM is the application of HRM theories/practices in an international context

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Which & how & whether things are transferred to another context depends on the underlying HR paradigm people follow.

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How firms operate and how people work within organisations depends on national institutions, economical, legal, cultural context.

EXTRA READING W1 HOFSTEDE: CULTURAL DIMENSIONS AND PLANNING 1984 Culture: collective programming of the mind which distinguishes the members of one group or society from those of another. Adoption of management depends on interpretations by receivers:

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Can they read

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Respect legitimacy

Understand Appropriate status Consider themselves competent

However everyone in a society is not programmed in the same way.

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Scope of cultural differences around the world… -

Studied a business and subsidiaries in 67 countries

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32 value statements

By same company so national differences couldn’t have been brought about by occupation 4 dimensions represent elements of common cultural systems of countries

Individualism v Collectivism Individualism: individuals are supposed to take care of themselves and their immediate families only. Collectivism: tightly knit social framework in which individuals can expect their relatives, clan, or other in-group to look after them in exchange for unquestioning loyalty FUNDAMENTAL ISSUE: Degree of interdependence a society maintains amon...