International and Domestic Human Resource Management

world-wide and internalated homosexual Resource ManagementINTRODUCTION adult male visionfulness direction has become an Copernican issue as much and more than firms operating multi interior(a)ly ar in select to civilise an discernment on how to operate competitively in an spheric cable organisation milieu (Dowling Welch, 2005).As the spheric playing field has become more competitive, global companies be obligate toadopt efficient HRM and give more center on to their international than their ho engross servant operations. Dueto the sensitivity of the issue, the wipe out-to doe with HR must address the key issues such as the impact ofglobalization, milieual influences, ethnical differences, the domestic HRM policies in differentcountries and the global workforce multiform in the action (Arm virile, 2009).The aim of this attempt is to provide a undefendable overview of the main differences and similarities mingled with international and Domestic pity ing choice worry. The essay will to some outcome discuss the recital of tender-hearted alternative counsel in a domestic and international take unitedly with thefactors that affect this growth. Fin all toldy, a conclusion will be drawn with an compendium of the researchfindings.DEFINITIONS OF DOMESTIC AND INTERNATIONAL HUMAN RESOURCE MANAGMENTWhen we look at the historic development of gentleman vision counsel, we find that itevolves from the term force play management. The gradual development of management action from administration of personnel to strategical planning of humane preference, has given acompetitive advantage to international companies. Personnel management focused more onadministrative functions and how to image the employee rather than commit the employee tothe organization strategic planning emergence. But the put in Human vision management agreement is structured more on the commitment of the staff and involves the employee in thestrategic plan ning and development process of the organization. It as well stress that organizationsshould consider their employees as assets than variable costs (Armstrong, 2009, Torrington et al,2005). It is non quite easy to provide a precise and exact bill of Human imaginativenessmanagement due(p) to the varying and different activities it refers to. unmatchable attempt made by Storey(1995) is HRM is a distinctive access code to employment and management which seeks toachieve competitive advantage by the strategic development of a highly committed andcapable workforce using an array of heathen, structural and personal techniques. On the differenthand, Human resource management is as well as defined as re put forwarding two activities. One is the generic wine term concerned with the key objectives of human activity, which atomic number 18 the staffing,performance, change management and administrative objectives, and the opposite activity is theHuman resource approach to take ho ld out the activities stated under the generic term nonp atomic number 18il(Torrington et al, 2005).In articulate to clearly see the commonalities and differences sh bed by Domestic and internationalisthuman resource management, citeing the activities which change or evolve when HR goes transnational is a vital excite. To this effect, a module developed by Morgan (1986) is helpful. Themodule presents three dimensions of International Human resource management with various(a)categories of HR activities, countries involved and employees in International activities. The firstdimension deals with the tasks of Human resource management the procurement, allocation andutilization of HR which goes further down to circumstantial activities mentioned primitively in this story underthe generic term explanation for HRM. The second dimension deals with three clownish categoriesthe host state where the adjuvant is located, al-Qaeda expanse of the companys headquarter, othercountrie s which ar source of manpower, finance and other inputs. The ternion dimension isconcerned with three category of employees Host-country nationals, Parent-country nationals andThird-country nationals. Thence, according to Morgan, The interplay between these threedimensions is what define international Human resource management (Dowling Welch, 2005).At this point, it shows that the elements or issues related to International HRM utilise are complex, high in number and have broader scope than those found in Domestic HRM practice. In order tocope up with these complex issues the management may need to choose a scheme-ethnocentric,Polycentric, regiocentric or geocentric that shell fits its disdain plan. In ethnocentric strategy, acompany uses identical Human resource strategy both at house and in its abroad business activity.The polycentric strategy, with embracement the inclination that each country is different in every aspect,gives strange subsidiaries autonomy to employ host country nationals and exercises localappropriate HR practices to the subsidiarys location. Regiocentric approach is when companies arestructured on a regional ground and best regional practices of HR are prescribed. Lastly, geocentricstrategy holds an sluttish for all employment opportunity where, all nationals from the HQ, subsidiaryand third country may be employed. It upholds Best person for the job motto and campaigns highercompany integrity with slight room for nationality (Storey, 2007).In the next section, the paper will discuss if the HR practices at the domestic aim plunder beimplemented at international take aim and would try to identify the factors that may facilitate orhamper this process in general.THE behave OF HUMAN RESOURCE MANAGMENT AT DOMESTIC AND INTERNATIONAL LEVELThe increase business activity at international level has shown the importance of understandinghow Multinational companies can operate efficiently and effectively in the global dimension. Ingeneral, International Human resource management involves the internationalizing company indifferent practices such as diverse HR activities than found in the home country, greater involvementin employees private lives, greater endangerment of exposure to the human and finance involved, moreexternal influence from the host country and greater complexness than found at Domestic HRM level(Dowling Welch, 2005). An International HR manager in any case needs to address the challenges due tocross cultural differences, global competition, manner of speaking and political differences when posted atinternational level. A disunite from the different intensity level of HR activities and strategic coordinationof different business units, both Domestic and International HRM share selfsame(prenominal) major activities ofHRM. In addition, an International Human resource manager also needs to understand the degree ofsoft or hard HRM present in the home base and extraneous subsidiaries. Comp anies with Hard HRMpolicy are more business focused and kick in cost minimization systems patch companies that engagethe employee in participation have Soft HRM policy (Storey, 2007).Dowling Welch (2005) set some factors that moderate the difference between Internationaland domestic Human resource management. According to Dowling, these variables are culturalenvironment, the industry with which the Multinational is to begin with involved, the extent of relianceof the multinationals on its home country or domestic mart and the attitudes of seniormanagement in international operation. Let us discuss to what extent these variables would act asmoderators between Domestic and International HRM practices.INDUSTRY TYPEOne pregnant variable that moderates International and Domestic Human resource management isthe type of industry an MNC is involved in and the international competition it faces.Putting the business playing field in one straight line, let us say we have at one end of th econtinuum a multi-domestic industry and the other end a global industry. The multi-domestic enddesignates an industry operating in various countries plainly the completion in that industry type isspecific to the country. term at the other end, the global industry group is about an industry thatoperates in different countries but interlinked with other industries in the same group (Dowling Welch, 2005).Industries that descend under the multi-domestic structure have a on the loose(p) reign and are not strictlycontrolled by the Headquarter of the MNC. They exhibit a highly modify HR structure and playa passive role in the transfer of HR practices outside their boarder. Examples for this category can be dispersal agents and insurance companies. The global industry represents a model whereby HRmanagement transfers management practices abroad and these practices are replicated and put inuse by the subsidiaries. Example for this group includes commercial aircraft companies andcompute r manufacturing companies (Dowling Welch, 2004, Beardwell Claydon, 2010).CULTUREThe other important factor in the moderating International and domestic Human resourcemanagement is horticulture. (Dowling Welch, 2004)Armstrong (2009) define organization culture as the patterns of determine, norms, beliefs, attitudesand assumption that may not have been articulated but shape the way in which the people in theorganization behave and get things done. (Armstrong, 2009, p384). Hofstede in his part put cultureas the collective programming of the mind which distinguishes the members of one group orcategory of people from another (Hofstede, 2001, p9).Other authors also have assay to define culture in different slipway but in general it is expressed as aprocess present in a social environment which holds the rules and regulations and the acceptednorms on how people are expected to behave. According to Hofstede (2001) there are fiverindependent dimensions of culture that let off the major difference between national groups. Thefirst is power outstrip. It is the degree to which members of an organization below the leadership crying(a) accept and expect the unequal distribution of power. High power distance shows an autocraticleadership while low power distance denotes a democratic practice. Uncertainty bendance refers tothe degree in which the people in a society feel uncomfortable for lack of structure and avoidam queen-sizeduity. High hesitancy avoidance exist in countries having a strong rules and job scrutiny asthey try to avoid uncertainties and low uncertainty avoidance is registered in countries promotingmore lax and pliant social rules and regulations. Hofstede third dimension is the laissez faireversus collectivism point. This dimension is concerned with the tendency of peoples receipt toidentifying themselves either in larger groups or more to themselves. High individualism is scored incountries like the USA where people mostly identify themselve s in slight family groups while in lowindividualistic countries people like to co-habit together and form large social groups. Masculinityor femininity is the fourth dimension which refers to emotional roles attributed to both genders. Itbalances the tough masculine uprightness of assertion and aggressiveness with the softer femininevirtue of emotion and caring. Japan lots high on this regard while Norway is the lowest. The fifthdimension is the abundant term versus short term orientation course. This dimension deals with the recognitionof status in a society and perseverance. In general understanding the cultural norms of a foreign country and adapting to the environment would benefit a company in an international level andmore importantly the HR policies of an organization are mostly influenced by the cultural practicesurrounding the organization. Human resource activities like hiring of staff, promoting, rewardingand dismissal of employees are determined and affected by t he cultural practice of the host country (Dowling Welch, 2005).There is a instruct of thought that stresses the concept of Etics and Emics as an important aspect tounderstanding culture in different settings. The Etic concept refers to the culture-common aspectwhile the Emic approach deals with culture-specific concepts of behaviour. accord thedifference between the two concepts is helpful in cross-cultural business communication. To thiseffect identifying which Human resource activity falls under Etic and which falls under Emic is alsocrucial as it have an effect on the performance of companies outside their home country (Dowling Welch, 2005).As noted earlier Emic refers to practices specific to one culture and are not transferrable crosswayscultures and Etic refers to the common practices found in different cultures and are transferrable across cultures. Other dimensions of culture that may affect Human resource practices are thepolitical condition of the country where MNC op erate, its economic regularize and development and its healthy position. The Multinational companies need to be careful in countries with strong spectralviews as they may have both civil and religious laws in use (Dowling Welch, 2005).RELIANCE OF THE MNC ON ITS HOME COUNTRY DOMESTIC foodstuffThe status of the organizations home domestic market is another moderator differentiatingInternational Human resource management and Domestic Human resource management.One major factor pushing companies to go outside their home market is the small market demand intheir home country but also the international market may not be their target market for bigcompanies as they have high demand in their home country. Hence, when analysing companyperformance, focusing only on the international market activity may not give the true stand or rankof an international company. Some international companies originate from small countries withsmall domestic demand or saturated domestic market and play a big role in the internationalbusiness activity. As an use ABB Company from Switzerland, INTERBREW from Belgium and wecan also mention PHILIPS Electronics originating from The Netherlands. United Nations Conferenceon Trade and Development (UNCTAD) made an annual survey on foreign direct investment and withsome detailed analysis made, it published a list and it reveals that Coca cola and McDonalds areranked 27th and thirty-ninth respectively. As stated earlier the main reason for this situation is, these bigMultinational companies have high domestic demand in their home country the USA. This may influence to some extent on their international business practice as well as deprive their managersan international management experience (Dowling Welch, 2004).MANAGEMENT ORIENTATIONThe last moderator presented by Dowling Welch, (2004) is the level of orientation of seniormanagement. Managers from different cultures have different perceptions towards the overallmanagement system of a company. L ack of knowledge of competitive management dexterity on aninternational level would lead to failure as it may fail to identify and address the issue differentlyfrom the domestic management issue.Beardwell and Claydon (2000) also observe the significance role Multinational companies play in theworld economy and with regard to the interrelation and restructuring of management issue atinternational versus the national level wrote Management style, Strategies and policies areshaped by home business system -the financial, institutional, legal and political framework inwhich they developed as domestic firms. Thus there is a intractable country of origin effect in thebehaviour of MNCs whereby the country the MNC originates from, exerts a distinctive effect on themanagement style, particularly the management of Human resource. (Beardwell and Claydon,2010, p19)On the other hand Taylor et al (1996) presents the exportive, adaptive and integrative models andexplain why the international c ompanies adopt different form of Strategic International Humanresource management. The adoptive models reflect that Human resource policies are designed tomatch the local environment of the subsidiary. There would be less transfer of Human resourcepractices from the bring up company and use distinction as a priority point. In the exportiveorientation the subsidiary copies Human resource management policies from the parent company.This upholds the integration of global management system and is ethnocentric in nature. Theintegrative orientation model is the selection of best HR practice across the world and is moreliberal and flexible in allowing the subsidiary adopts local HR practices (Beardwell and Claydon,2010). But each orientation requires different consideration in line with the HR policies practiced bythe parent organization.BUSINESS INTEGRATION AND GLOBAL STRATEGYAs the global commerce is increasing so has the activities of International Human resourcemanagement becomes an important and more complex than Domestic Human resourcemanagement. While we acknowledge the expanding business activity, there is a school ofthought that confirm and concur on the alignment of business practices on global scale. The ideaposits three major perspectives towards the practice of Human resource management, universalistic, mishap and physical body.The Universalistic perspective is about identifying the best standard of Human resource practicethrough various and continuous Human resource activities while the Contingency or externallyfit perspective suggests the need for a intermixture of different policies and practices to get high resultsor best HR performance. The Configuration perspective stand for the interaction of businessstrategies and HRM practices used to determine business performance (Beardwell and Claydon,2010).Another observation toward the HR practices in the international level says that, organizationsoperating under same environment would be compelled to wards a akin managementpractice. This Isomorphic pull as they refer to it or isomorphism has three forms. Managementpractices under the Coercive form adopt foreign HR practices due to external pressure, such aspressures or expectations from the state, juristic or cultural environment. The Mimetic form iswhen companies copy HR models from other companies operating on the same line of businessand accept it as the standard form of practice against various uncertainties. The last model is theprescriptive and it is a pull resulting from the professionalization functions or widely accepted HRpractices (Brewster et al, 2007).In the practical field most organizations have been confronted with the deregulation of themarket, free global trade and also slow business transactions. To this they have been forced toapply uniform and cost minimization strategies and as these international companies apply theprescribed strategies it indirectly put pressure on the host country management system to adopt/copy same management practice (Bratton and Gold, 2003).EXPATRIATESOne important point in International Human resource management is the movement ofemployees across national boundaries to foreign country assignments. These employees aretermed as Expatriates while Employees transferred from subsidiary branch into Headquartersare referred as Inpatriates (Dowling Welch, 2005). As the global business activity ofInternational companies increased, it demanded high arrogant system and follow up of thesubsidiaries business performance. To this effect, MNC have chosen the use of Expatriates,Parent company nationals, as a controlling mechanism by assigning them in key managementpositions in the subsidiary branches of the parent company (Bartlett Ghoshal, 1989).The efficiency of the deployed expatriate may also depend on the adaptability the expatriate onhis/her foreign assignment. A study conducted by suss out Mendenhall and Gary Oddor in 1985suggests that expatriate triumph and ad justment depend on several(prenominal) dimensions. The first is self-oriented dimension, which deals with the expat personal competence and adaptability to theforeign environment. The second dimension is the others-oriented dimension, which brood ofrelationship development and willingness to communicate in reference to the reluctance to plunge and learn the language of the foreign land. The Third dimension is the perceptualdimension, which is concerned with the ability of expatriates to comprehend the behaviour offoreign nationals and the fourth dimension is cultural toughness and this is to gauge how quicklyan expatriate adapts to a harsh environment (Brewster Harris1999). Apart from parentcountry nationals, Nationals from host country and third country are also considered asexpatriates. But this paper will focus only on expatriates from parent country nationals todiscuss the main reasons as to why an MNC send an employee on a foreign assignment.Expatriates are depute in a forei gn country as,An agent of direct control- The appoint expatriate is used to control the activities of the subsidiary and ensure its compliance through supervision (Dowling Welch, 2005, Bartlett Ghoshal , 1989)An agent of socialization- The expatriate in question understands the companies values and beliefs and acts as a medium to transfer these qualities of the parent company to the subsidiaries (Dowling Welch, 2005)As network builder- An expatriate having a knowledge pertinent to his/her job capability will in due course bond with people in different key positions and together build a network of mutualness (Dowling Welch, 2005)As boundary spanner- This refers to activities performed by the expatriate, such as gathering discipline that bridge internal and external organizational context. It would be the expatriates duty to promote the company profile as well as gather knowledge that may be of use to the betterment of the company (Dowling Welch, 2005)As language nodes- Expat riates with foreign language background would eventually become an asset specially when they repatriate to their home country (Dowling Welch, 2005).The advantages of using expatriates are mainly to assert organizational control, internationalwork experience and follow up the achievement of the companys objective by the subsidiary.Whereas the disadvantage points are the problem with the adaptability of expatriates to theforeign environment and the high cost incurred by the parent company to the selection and cooking of expatriates (Dowling Welch, 2005). The process of selecting the right person to theright position is crucial to the success of the oversees mission and it is to noted that anexpatriates success in one environment does not imply that the same expatriate will fill gaps inall circumstances (Brewster Harris, 1999).To this end, In order to select an expatriate for an international assignment, Dowling Welch(2005) have set six basic factors which may assist managers in the process. As individual factorsthey have set Technical ability, cross cultural suitability and family requirements are listedessential while in as situational factors country or cultural requirements, language and MNErequirements need to be analysed and considered in the selection process. In anotherperspective Schneider and Barsoux (1997) list nine point they believe are important for theselection process. They are interpersonal skill, linguistic ability, ability to valuation account and cope upwith uncertainty, motivation to work and live abroad, flexibility, patience and respect, culturalempathy, strong sense of self and sense of humour. (Dowling Welch, 2005)In general the extent of the selection criteria is wide and companies need to identify and consider the most important and pertinent points to the position to be filled.CONCLUSIONThere are various factors that differentiate International Human resource management fromDomestic human resource management. The Globalization of world economies has forcedinternational companies to adjust and continuously change their company strategy and Humanmanagement systems in order to survive the competition. To this, the function of Humanresource management has become an important subject as it has proved to be a vital point tothe success of International as well as Domestic companies. In this paper various perspectivestowards International Human resource management are discussed briefly. Authors in the fieldare also quoted on how the present and futurity shape of Human resource management is andwould be. In summary, the paper has seek to identify the main similarities and differencesbetween International and Domestic Human resource management. From the literature reviewpresented, different internal and external factors are discussed to the complexity ofInternational human resource management, presented the various interpretation of HRM andhave tried to show how management and the market would dictate the shape of Humanresource management in general.