Now we going to expose the challenges that IHRM got to face. We understand the main problem was to persuade the mangers that the culture is different, the social system is different, the legal concepts are different etc. Overall it's a totally new environment which is difficult for the international HR manger to identify these changes and choose accordingly. This is the key difference between HR and IHRM, in IHRM the supervisor operates in an alien environment which makes decision making and implementation much difficult. Thus the recruitment and training of the mangers, communication between the hq and the subsidiary becomes more important than in a local operation.
The IHRM is centers more how to choose, recruit and keep managers for international operations, rather than centering on how to control international employees.
Now, we relocated along, "expatriates". An expatriate can be an employee who is working and short-term surviving in a international country (Dowling & Welch, 2004, p. g. 5). The fundamental difference between domestic HR and IHRM is the fact that staff are relocated across national limitations, thus expatriates e are born. Hence it is natural in an IHRM at the mercy of focus more on managing these expatriates.
There can be three types of employees in an international firm. Employees from where the organization is headquarted is recognized as Father or mother Country Nationals, employees from where in fact the subsidiary is located are known as Host Country Nationals, other country nationals are known as Third Country Nationals (Dowling & Welch, 2004, p. g. 5).
Now it began to make sense, IHRM is more technical and complicated than home HRM, because you now not only have to have a thorough understanding about the web host country, you also need to choose who are we going to use as employees HCN's, PCN's or TCN's, or an assortment of them. If so in what proportions? How do the organization select the right person? How is training, compensating and alternative activities are carried? we hope to find answers for these questions through the report.
Cross-cultural communication
Similarly, among various countries cross-cultural communication is very necessary so that they can understand each others through religious beliefs, culture, art, books, foreign policies, fiscal polices, etc. such kind of bridges of understanding will lessen and decrease the gap between two culture. Thirukkural, a known tamil poet, who have been translated in more than 25 languages and who had been famous for moral themes or templates and brevity, has very aptly remarked on power of talk:
The goodness called goodness of speech
IS goodness which nothing can reach
Since gain or spoil speeches brings
Guard from the slips of tongue
Weight what and, speak, because
No prosperity or virtue words surpass.
They overspeak who do not seek
A few and perfect words to speak
(Gupta. reprint 2004)
It is said that conversation is grater than words, brain is greater than speech, will is grater than brain consciousness is higher than will, meditation is higher than will and ability of understanding is greater than meditation. sanakumara, surmonzing narad atma vidya or brahmavidya (knowledge of the supreme) says : ability of understanding beings sine quo non for proper meditation, that's is higher than meditation. if we can not properly understand and discriminate good and bad, truth and untruth and discriminate between good and bad, truth and untruth, and so on pairs of opposites, how can we meditate? Thus there is absolutely no doubt that the energy of understanding is associated with speech, one of the various tools of communication.
point 02 - Ethnic Differences
That culture played a major role in IHRM as it consists of understanding and controlling a new culture and a new communal system. what aspects should an international HR supervisor should focus on and how he should react to cultural differences in an international arena. However the topic had many more to offer than what I initially anticipated.
Culture is how a group of people solves problems and reconciles dilemmas (Trompenaars & Turner, 2002, p. g. 02). There are so many elements in a culture and there is nobody way of understanding or defining a culture. Nonetheless it was visible that having an intensive understanding of it was essential for many who are engaged in IHRM.
In order to give meaning and understanding to the culture there were several models reviewed. However the one which looked most appealing and attractive was the Hofstede's five dimensions. He developed a model that targeted ways of calculating a countrywide culture and exactly how these measures my work differently in different context. The ethnic values that are important in a national culture, could be mirrored in the way business within that country are managed and sorted out (Hofstede, 2006).
According to the Hofsted's there are 5 ethnic damnations.
Power distance - this is actually the level to which vitality is allocated unequally on the list of employees in between the higher positions and the lower positions. Eg- India is a high electric power distance culture ( even have a solid system) and USA is less vitality distance culture.
Individualism vs collectivisms
In a individualistic country people would priorities them self ( USA) while collectivism country people would priorities group needs.
Uncertainty avoidance
People would try to lessen risk they face in a situation ( keeping away from paralysis through research ) usually countries with long record and traditions have a higher doubt avoidance. Countries such as USA well come higher risks.
Masculinity / femininity
Masculine- difficult value dominating Eg; success, money, satiates, competition
Feminine- tender beliefs prominent such as personal romantic relationships, care for other's, quality of life etc. When we take Sri Lanka for a example I believe we have womanly culture even though have many masculinity futures. The very best example because of this is during the tsunami situation whole region gather to help the tsunami victims within ours.
This is an outstanding model where you can get an instant idea about something intricate as a national culture. we believe that this simplicity itself is the major brief coming of this model. Hofstede selected a country and provided marks to each dimensions, thinking that the culture is static. But everybody knows that in the current context culture is anything but static, it changes at an instant speed, thus a country that was once collectivist could now be individualistic scheduled to numerous reasons such as economic pressure, government procedures etc.
And also Hofstede never required into consideration the intricacy of the duty. For a good example USA is an individualistic culture, but certain sophisticated projects and functions may force a person to are a group to succeed in that particular task. Thus the complexity of the duty has obligated someone with individualistic figure to be collectivistic.
But overall the model is excellent to get a view of what an unidentified culture would appear to be, but we do not believe you may make acoustics business decisions predicated on this model.
Now we had understanding about how exactly to investigate a countrywide culture, and also the value of culture to employees and international HR managers. It was obvious that this should be the starting point of any international HR plan. Decisions should be taken where culture is held at the guts, as the success of implementation will depend on how well international employees accept your ideas.
point 03 - The Organizational Context
All the prior section reviewed about the exterior environment which topic discussed the way the interior environment should be organized in accordance to international procedures.
Again we touched after areas such as need for culture in HRM and also the corporation strategy and HRM etc. Although these areas are extremely interesting we found it difficult to see the practicality than it. For a good example in one point it was said that when a certain culture is high in power distance and also have respect for authority then the authority should be centralized in case not it will decentralized. But in practice it is not the culture that affects the structure most however the objectives and the duty of the organization (creation companies are definitely more centralized while service oriented companies are decentralized).
The most interesting form of composition for all of us it was the Matrix composition; it was not the same as all other traditional composition and got certain unique features. A matrix framework creates dual lines of specialist and combines efficient and product departmentalization (Robbins, Millett, 2004, p. g. 475). The best interesting part about the Matrix composition was that it broke the departmental restrictions and goes against the unity of command word where now one staff reviews to two mangers. This sort of structure is suitable for a huge matured company. When a business expands its information handling capacity could get overloaded, under a matrix structure this is improved as it allows the flow of communication and increased flexibility.
But what we discovered was even large intricate organizations are unwilling to move along with a matrix structure. To begin with it is a complex composition, and second of all breaking departmental boundaries has its own repercussions such as there exists higher room for issues, there will be regular issues about span of control and level of authority and there will be challenging for vitality among professionals etc.
What was clear for all of us is that it's difficult to look at an organization and say this is the best composition for you. Regardless of the structure selected it must be adaptable enough to improve regarding to situations and most importantly factors such as nationwide culture, employee tendencies must be studied into consideration prior to deciding on a composition.
An organizations composition is the backbone that allows it to stand still, the HR activities of the organization and all other activities will depend on the support it gets from the structure. Thus HR has a larger responsibility in building the structure, the structure should be strong enough not and then stand still against the internal environment but also from the exterior environment as well. That's the reason in IHRM we look at aspects such as nationwide cultures, work procedures, ethics, norms, behaviors etc. In order that HR managers can design a framework that is ideal for the external environment.
Lesson 04 - HRM in the Host Country Context
Host country is where the subsidiary is likely to be set out. HRM in host country is how you will plan your employees, recruit them, coach them and compensate them once the subsidiary is operational. But as always the topic went a step further than what I expected.
Certain kind of questions an international HR supervisor would ask himself. Such as for example should pay for performance be applied? Should EEO be used here? How far are we going to distribute power?
We feel that we always give attention to big areas such as reimbursement, recruitment, training etc. that we somehow consider the above mentioned questions as irrelevant. But we believe in today's context those questions will be the burning issues. Before making a decision on training and reimbursement we have to outline what sort of organization is going to operate. This 'way' may be the overall commercial strategy, or would be the vision of the organization, whatever it is, it ought to be the platform of the new subsidiary.
Why we call it as the system is basically because, once an organization have discussed how it designs to use such as should it execute purchase performance or should it practice EEO etc. Then the organization has created a clear route for it traveling. Given that the main areas have been put together we can decide what our recruitment insurance plan is going to be like, or how we will compensate. For an example let's say that people went along with purchase performance and EEO. Now the HR director knows just what to do, he is able to design a payment package that could compensate according to the way employees perform. Also he is able to design a recruitment coverage where applicants get an equal chance of getting picked.
But then there were other questions that came up up. How can an organization decide what's the best path to move forward for this subsidiary? Should it be based upon the organization strategy or the environment of the web host country? These were answered quickly by another few discuss.
The topic is trying to instruct to us how a business should look for sponsor country specific factors that will have a primary impact within the operations of the organization. As an example it might be the corporate way a pay for performance system but certain legal and cultural conditions in the sponsor country won't allow an organization to make use of such a technique (like in Japan where pay is in line with the seniority).
An business has a selection when it comes to selecting just how it plans to operate. It can either standardize work techniques where mother or father country benchmarks are maintained globally. Or it can localize the functions according to the host country. Both of these factors are like two extremes of any continuum, the challenge is to find the point where both options are blended in correct quantities.
But in reality we feel organizations do not desire to localize procedures and are willing in standardizing whenever you can. From a professionals perspective this is totally agreeable as it would solve whole lot of problems at the organization level. But when it comes to the operational level it will create ambiguity and distress. But still to be able to help ease the pressure at the organization level and also to save time, organizations will be more attracted towards standardizing.
And this is one of the main element explanations why expatriates are being used so frequently by multinationals. Aside from many other benefits they bring to the subsidiary they most importantly help the parent country to truly have a greater control over the operations, thus allowing them to standardize functions to a larger extent.
point 05 - Sustaining International Business Operations
To our knowledge staffing is merely one aspect of IHRM and to be able to maintain, there are so a great many other factors that needs to be mentioned (such as management style, syndication of vitality and autonomy etc. ).
There are several ways approaches to staffing available for MNE. Ethnocentric is where the subsidiary is given little autonomy and key management positions are performed by foreign nationals (Dowling & Welch, 2004, p. g. 58). There can be many instances found within Sri Lankan because of this particular staffing coverage such as Hilton, Suntel, IOC, Laughs etc.
Polycentric is where each subsidiary is cared for as a distinct nationwide entity with some decision making autonomy (Dowling & Welch, 2004, p. g. 59) cases could be Airtel, Dialog etc. Geocentric is where in fact the MNE requires a global approach to its operations. It really is accompanied by a worldwide designed business and nationality is disregarded and only ability (Dowling & Welch, 2004, p. g. 60) e. g -: United Nations, HSBC. Regiocentric is like the geocentric procedure, it utilizes a wider pool of professionals but in a restricted way (Dowling & Welch, 2004, p. g. 62) e. g -: Unilivers.
However what we should going to understand how important the subsidiary is to the business. The higher the importance the greater the control the organization requires over the subsidiary, thus it is much more likely that they would go ahead with an ethnocentric or any other similar procedure where they can have increased control. That's the reason we see mature organizations such as Suntel and Hilton still using an ethnocentric strategy. And a new subsidiary like Aitel Sri Lanka using a polycentric approach says us that it is not of significant importance to the group. Regeocentric and geocentric approaches are distinct from the above two, because to be able to practice these techniques the MNE should be large and pass on across many countries.
Our observation might not be 100% true for any organizations, but it could apply for many MNE's especially small and medium once.
point 06 - Recruitment and Selection for International Assignment
When recruiting and selection you asked your self was what should be so different in selecting a domestic director and a global manger. In the end if you are successful as a domestic manger you merely have to apply the same thing in another country with a bunch of foreigners. This time around we was completely wrong, we soon discovered that there is a significant difference in selecting a domestic manager and an international manager.
The very first thing we recognized about a global manager is the fact that his process is lot more complicated than of your domestic manager. There's a lot expected from an expatriate, he will have to perform in an unfamiliar environment, he will have to experiment with different roles in various situations (e. g-: an interpreter, a boundary spanner, a realtor, a negotiator etc. ), the support of the family and friends maybe absent, he's likely to be flexible and take up to the coordinator country situations quickly etc.
An important point you want to understand, "expatriate failure". We found it very interesting because we was unaware of this term and also when we looked deep in to it; it is something practically experienced by many MNE's. Expatriate failure is thought as the premature go back of expatriate (that is, a go back home before the period of task is completed) (Dowling & Welch, 2004, p. g. 86).
There were several reasons highlighted for expatriate failure, the most frequent issues are the lack of ability of the expatriate to adapt to the host country and family concerns. Why we say is that when an expatriate is determined, the organization makes certain that he has performed well domestically. This certifies that he gets the necessary technical competencies. Therefore the reason behind not performing internationally is not because he lacks complex skills, it's just that he doesn't understand how apply his knowledge to that particular culture.
And also humans are social pets; they always desire to be a part of an organization and a community. But when an expatriate is send in foreign countries he gets take off from his community and gets isolated. This adds tremendous physiological pressure on the expat. That's the reason we believe that these two factors are the most frequent known reasons for expatriate inability.
Lesson 07 - Training and Development
Now we want to know how important it is to choose the right person to head an international procedure. Achieving success in a domestic environment does not ensure the success in an international environment. But selecting the prospect with all these factors is difficult. So it was my knowing that if organizations cannot find individuals with the required characteristics, they must use training and development to bring those individuals to the required level.
Before this conversation starting this you want to identify and understand the difference between training and development. As explained by Natural stone (2005, p. g. 335) training stresses immediate improvement in the current job performance, while development entails those activities that put together a worker future tasks. Thus the right word to be used in IHRM would be development.
The interesting part of this talk that expats are generally in most occasions going act as trainers themselves. This is a true fact; one of the primary reasons of using expatriates is because they may have certain skills that web host country employees do not. Thus they'll in time coach these new skills to sponsor country employees. Now we'd idea about how exactly important training of expatriates is really. Not only should an organization train them on handling cross social instability and breaking the dialect barrier, they also needs to be trained to take care of the coaches' position (somebody who trains variety country nationals).
Many expat's fail credited the inability to adjust to number country environment. Thus getting a good cross ethnical training session is essential to an effective international operation. It was also pointed out that preliminary appointments should be considered a key area in cross ethnic training. I totally agree with that statement, the expat should be given a chance to experience the variety country for himself, which is more effective than any class room session. And vocabulary is a huge barrier for most expatriates to perform well, thus it will also become a part of the cross social training.
We strongly feel that there should be some matter given in producing the expats specialized skills as well, particularly if he's going take on a new management position that was absent in this chapter.
point 08 - Performance Management, Re-entry and Profession Issues
we had an understanding about performance management from a previous discourse but re-entry was a new area. So we were going to getting excited about identifying the hyperlink between these two topics.
What performance management is really and how it can benefit an organization. This is because there are so many other factors that needs to be taken into account when evaluating an expat, things such as the coordinator country environment, the culture, employee action etc. And another significant difference in IHRM performance appraisals is that it takes into account factors like the expats potential to hook up with the host country culture and social values, ability to comprehend its employees etc.
Our understanding is the fact that having a thorough, fool facts performance appraisal and doing it correctly is vital for an organization. This is the best point where the organization can do a comprehensive audit about the performance of the expat. As explained earlier expatriate failure is a major issue in most of the international organizations. This can be avoided to a greater extent if the organization carries out a thorough performance appraisal.
Repatriation was a interesting area. The interesting part was that a lot of international manager after an effective international operation after re going into to the coordinator country underwent certain issues. This was so common that it's been included in to the expatriation process. From we want to feel there two attributes to this history. One being that the director who is returning after quite a while will see it difficult to look at to his culture and environment after being from it. Secondly issues related with the work environment such as change in positions, change in reporting styles, change in company culture, new recruits etc.
I imagine the change in the work environment is the the one that affects the most. Our understanding is that in order to avoid this, the expat should constantly talk to the father or mother country during his task.
point09 - Compensation
People work because they know that at the end of your day they may be paid a respectable amount. So if a business wants to keep its best employees intact it must ensure that they compensate appropriately. We thought that same rule applied in IHRM. We knew that international mangers are paid much better than local mangers, and our understanding was that it is because the task they manage is difficult. But compensating in IHRM is lot more complicated than in HRM.
First of most you want to discuss about a topic that people found very interesting. You will discover two ways a business can compensate an employee. The heading rate strategy is where in fact the salary structure is within parallel with the number country requirements (Dowling & Welch, 2004, p. g. 144). The total amount sheet procedure is where in fact the salary composition would be similar to home country criteria (Dowling & Welch, 2004, p. g. 146).
Our understanding would be that the salary structure is usually designed to profit the expat. For a good example if an Australian supervisor is transferred to Sri Lanka they would adapt the total amount sheet way since Australians are paid much better than Sri Lanka. When a Sri Lankan manager was to visit Australia they would adjust the going rate way.
The reason behind this as we understand is that a lot of expats are delivered to handle mature management positions, which is most likely that they would have to start out great deal of things from starch such as accommodation, schooling, furniture etc. Thus the organization must ensure that not only these are paid much better than their subordinates but and yes it should be identical or much better than what they're paid in their father or mother country. Otherwise an organization will never be able to get talented individuals.
The important things to understand once we feel is that it's very difficult for someone to accept a global assignment. There is change in culture, living standards, family issues, re location issues, concern with moving into uncertain territory, profession issues are some of things that an international administrator must face. Despite all this, if an organization wants an individual to accept a global assignment the simplest way of breaking the above barriers is by compensating them appropriately. we believe that is the reason why expats always gets the power as it pertains creating their salary structure.
Another important area in payment as we found out was allowances. As we want to understand it offers two purposes. First of all an allowance makes the remuneration program attractive, thus professionals will be drawn in acknowledging international assignments. Subsequently it can help to increase the living criteria of a global manager. Especially mature managers have a certain image to maintain, they represent not only their standard however the standard of the entire firm. Hence an allowances will help senior managers to safeguard that image.
point 10 - Business Etiquettes and Sociable Customs
There were always something new to learn in etiquettes, because every culture has their own unique way of conducting business.
The important things that people want to understand that no subject how qualified and well outfitted a administrator maybe he is able to mess the whole lot up by simply doing something that's not excepted for the reason that culture. That's how important etiquettes are. By doing things according to the host's culture you show that you respect them and their culture.
Handling these etiquettes should be one of the factors discussed in the expatriate training programs. Since it will help the future expats to take care of business smoothly, since that time they know very well what they should do and what they shouldn't.
The interesting part is that you can damage a romantic relationship by doing something, or by not doing as well.
