Human Resource Management: HRM Practices in Global Market and Internationalization

This report discusses the HRM practices in the global market and internationalization. It focuses on the impact of implementing a global organization strategy and the pros and cons associated with it. The report also explores the concepts of globalisation and internationalisation in relation to IHRM. It analyzes the recruitment and selection process and the training and development functions in international HRM. Additionally, it discusses the benefits and challenges of standardization in HRM practices.

HUMAN RESOURCE
MANAGEMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
Part a............................................................................................................................................3
Part b............................................................................................................................................5
Part c............................................................................................................................................8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
The Human resource management is an integral function of any organization which must
be structured and planned in efficient way. With the globalization, there are changes in the form
of HRM practices and policies which are essential to be employed by the companies. The HRM
strategies as per the dynamic requirements of external market assist in being competitive
(Almond, 2011.). The current report is based on discussing the HRM practices in the global
market and internationalization. For this sake, an American MNC Leisure Choice International
(LCI) has been selected. The respective firm is a sports and leisure company that owns various
fitness centres having amenities of spa, gyms, cafes and restaurants and alternative health
treatments. The operations of this organisation are widespread in more than 50 countries.
However presently, it is aiming to launch a new management concept the Global organisation for
10 year period. With this new concept of management, the firm is intending to bring
standardisation in its various management practices. Therefore, the report will make an
investigation about the impacts that can be seen over firm. Besides this, the pros and cons of this
strategy will also be discussed upon.
Part a
The MNCs in simple terms can be understood as a company which has its operations in
at least one country other than the parent country. The management of these firms are usually
done by the centralised head office which is based in the home country. LCI is also an MNC
which has its operation in more than 50 countries. The present intention of inducing the concept
of the Global organisation in its various sites can be quite challenging. There are four major
categories of the MNC- Decentralised multinational, global centralised corporation, international
company and transnational entity (Delbridge, Hauptmeier and Sengupta, 2011). The LCI is
looking forward to introduce the global organisation concept. With this strategy, the role of
international managers becomes critical who are responsible to take various kinds of decisions
on HRM policies and practices. The Global organisation strategy involves its investments in
several other countries. So, it makes efforts to market the products and services through the same
image or brand. The major emphasis in the strategy involves standardisation of its practices.

The goal of LCI to implement global organisation strategy is linked closely with the
international HRM (IHRM) concept (Story and et.al., 2014). With this, the core objective of
IHRM will revolve around the various targets to be achieved. The entire practices of various
international sites will be standardised with home country to attain competitive advantages
through better recruitments and productivity. With the evolution of globalisation, there are lots of
advancements which have generated a modification in the HRM with IHRM with modern
concepts and models.
Illustration: 1 Model of IHRM
Source: Paik, Chow and Vance, 2011
To maintain a balance between local and global requirements, the MNCs have to focus
on various HR strategies. In context of LCI, the organisation has to apply the model of IHRM so
as to proceed in a structured manner. Initially, the company may start to think over the human
resource plan and their orientation. This includes recruitment, selection, their placement etc.
After this, the firm will have to plan for allocation of its recruitments within its diverse
subsidiary entities (Gomes and et.al., 2015). After the successful allocation, the company will
have to make efforts for their proper utilisation through enhancement of employees’ skills and

efficiencies. The LCI has based its home country in US while having its successful operations in
various host countries like Germany. In these sites, till now the management has used a blend of
polycentric and ethnocentric approaches while having recruitments. This type of recruiting
strategies is useful for MNCs to maintain the balance of strategic integration, local
responsiveness and innovation. The ethnocentric approach of hiring helps in keeping up with the
parent organisation’s culture, mission and objectives. Therefore, the candidates of home country
are appointed in the various subsidiary branches (CG Davidson, McPhail and Barry, 2011).
Similarly, to get more local responses, the polycentric approach is used so that the host country’s
employees can make a personalised relation to understand their customers. Under the new
strategy, the enterprise will also be responsible to make proper arrangements of employees’
training, their orientation and development regarding organisation culture and practices.
From the analysis, the two concepts of globalisation and internationalisation can be
connected with IHRM. The LCI organisation attempts for globalisation by expanding its services
and sharing of its cultural, financial, and economical integration. This allows transfer of capital,
people, data etc. in easier way for parent and host country sites (Cascio, Wayne, 2012).
Similarly, the said enterprise will make exchange of goods and services with the parent branch to
make its presence at international level. With these concepts, the respective firm intends global
organisation strategy to be implemented which will bring changes in various HRM approaches.
As per the social, economic and political environment of various sites, the organisation will
implement the strategies at standardised level so as to keep up with its major mission and vision.
Further, the IHRM models help the stated enterprise in making recruitments and development of
the employees. The changes in the internal management of various sites will enhance the role of
international managers as responsibility regarding maintenance of uniformity will be engaged on
them (Parry and Tyson, 2011). Moreover, they must have to make research while implementing
new strategy through IHRM models so as to get efficient results.
Part b
People resourcing
The human resource planning (HRP) is a major task of an organisation to accomplish
the ultimate objective of a company. An effective HRP helps in getting the right candidate within
organisation to fill the position and get the tasks fulfilled in appropriate manner. In context of

international HRM, the process and methodology of recruitment is highly distinct. The
international managers must be acquainted with various techniques of making recruitment and
selection to fit in international background. LCI is intending to apply the global organisation
concept with major objective of bringing standardisation in its various functions (Almond, 2011).
Therefore, the major base of recruitment and selection planning will be based on home country’s
management function.
To start with the HRP process, the managers must decide the country for which they are
undertaking the process i.e. home country, host country or the third nation. On this basis, the
further process regarding the technique to be applied for recruitment and selection method can be
chosen. The major decision in this process is associated with whether to centralise the
recruitment work in home country or decentralise in the host countries? The LCI Company’s
managers can attain the objective of HRP in various stages. For this purpose, the competencies
of HR managers must also meet the required objectives. The managers must have the linguistic
potential, cultural sensitivity and diversity etc.(Wilson, 2014). Further, they must be aware of the
approach that should be applied for the best interest of company.
The LCI organisation is applying the blend of polycentric and ethnocentric approaches
in recruitment activities. As per this, in some of the sites, the employees are recruited from the
home country while in others they belong to host country. Both have their own benefits and
drawbacks for the organisation at different levels. With the introduction of global organisation
strategy, various management functions will be standardised. As a result, the HRP process will
also become uniform in various sites which may affect the entire venture. The HR planning will
be highly affected as in many countries; the employees who belong to local regions are able to
give their best efforts. However, at present due to the blend of polycentric and ethnocentric
approaches, the enterprise can take the advantage in many aspects (Festing and et.al., 2013).
While, the international manager must develop the framework for talent acquisition and proper
diversity management, at workplace after the integration strategy of entity. This will largely help
employees in adjusting with the workplace environment.
The managers at various sites of LCI will have to develop a talent management plan as
per their external environment. Due to the proposed uniformity in process, they may encounter
various types of situations affecting their HR policies and practices. To minimise the adverse

impact, the organisation may evaluate its current level of talent and adopt the various recruitment
and selection plan as per the standardised process to meet the determined objective.
Training and development
The training and development is the most integral function in IHRM to make employees
fit in the workplace environment. The organisations that have the globalised operations in
various countries must have to make decision regarding training and development of workers in
a planned way. Due to ethnocentric approaches, the recruitments are made from the home
country in various other subsidiary branches that are located in other countries. Sometimes this
may stand as a problem for the employees to make adjustments in the new environment (J. Hurn,
2014). In such scenario, giving orientation and training to the employee may help in a great way
to get them acquainted with the new workplace atmosphere. The culture of home country is
dominating in the ethnocentric approaches due to which the selection of a worker must be done
accordingly. The IHRM aspect in such condition states to make effective procurement of human
resource from different sources and their utilisation in the effective way. The international
managers may find it difficult to implement the training and development programs to suit the
needs of each employee. Therefore, the company may ensure to conduct an evaluation of training
needs so as to get the proper knowledge of current situation (Minbaeva, Mäkelä and Rabbiosi,
2012).
The leadership and management is also a factor which should not be overlooked by the
management. In case of global strategy, the leadership and management followed by the home
country will be dominating. In many countries due to different culture, economies and political
environment, the same type of leadership or management practice may not give the expected
results. Therefore, the international managers are required to be very effective in adopting the
management style. The LCI Company may take the decision of following the democratic style of
management so as to keep the authority of making final decision centralised within top level
management. While, to implement this type of management in each site can be challenging due
to diverse culture of the organisations (Thite, Wilkinson and Shah, 2012). Therefore, the HRM
department must make provisions that can help in mitigating this issue by attaining more
cooperation from the workers.

In addition to this, the HRM department may adopt some measures to create culture
awareness to the staff through their customised training programs. This type of training is useful
for the fresh recruits who are new in the organisation and have been recruited from the home
country to the host one. This training will aid them in interacting with colleagues and
understanding the cultural challenges. This will highly increase the likelihood of making staff
culturally competent which can be useful for the enterprise. Thus, the stated venture may develop
its training and development functions with HRM department to overcome the barriers of various
cultural aspects (Shen, 2011). Besides this, the leadership style and management can also be
adopted in a way that can help to suit with the external situations of the country.
Part c
The LCI Company’s objective of bringing standardisation in various operating
procedures will bring a number of benefits as well as challenges to the management. In context
of firm’s German branch, the site uses the international structure in which they use mix of
polycentric and ethnocentric approaches. Along with this, other management operations are also
executed as per the national, legal and cultural aspect of the country. However, with
standardisation of processes, the management concept will be changed and executed as per the
standard practices. This may affect the operations as it may not blend with external environment
like legal, national and cultural aspects (Dickmann, Brewster and Sparrow, 2016). To make the
strict norm to follow a standard process may restrict creativity level to some extent; however
with the same goal of serving the customers through same product and service, this may provide
a number of benefits. Some of the crucial benefits that can be retrieved from new process are as
follows:
 Simplification in performance management: The international managers can easily
develop the standard targets and ranges to be accomplished by the employees. Further,
staffs are also aware of various expectations of the organisation with them (Uysal, 2014).
They have to follow a similar procedure which makes it easier for managers to measure
staff performance against the set standards.
 Quality control: In context of services, the LCI wants to maintain the service quality at
uniform level in all the countries. For this purpose, the standardised operations will be

highly helpful in reducing errors and maintaining high quality by following the standard
process.
 Less training cost: The said organisation can save its training cost extensively by
documenting the various procedures as a kit which will act as a guiding principle
(Common, 2011). The fresh recruits can refer this kit to understand the crucial aspect and
standard process to be executed in the workplace. Thus, it will save the additional cost of
training to be given to the new recruitments.
 Promptness for future growth: The Company can easily make its expansion in various
countries by following readily available work processes. Besides this, new workers can
also carry out the cultures and vision of the organisation in new enterprise at host country
by replicating the procedures (Parry, Stavrou-Costea and Morley, 2011).
 Save from knowledge loss: If various details of business process in stored in employees’
mind, there can be loss of company in case of retirement, attrition or resignation of staff.
However, the documentation of entire process within management database can help the
stated business to maintain their processes as usual. However, replacing the valuable
employees is a complex task, still the well planned standard processes ensures same
velocity of the business operations (Vaiman and Brewster, 2015).
Limitations of Standardised process
 Limited creativity: The implementation of the standardisation in management process can
highly limit the scope of creativity among the entities. For instance, the national,
political, cultural and social aspects of Germany will be largely distinct from US. In case
of same standard process which has to be followed according to headquarter of the LCI
company, the creativity can be affected. Germany may try to implement various
strategies as per the external environment to suit the needs at local level. However, with
standardisation, the said nation may not apply other management concepts (Zheng, 2013).
 Less flexibility: In the standardisation strategy, the organisation may lose their flexibility
in adjusting as per the market environment. In Germany, the management is based on
various externalities like social and cultural environment. As per this, the plan of work is
executed with the help of work councils. Training is provided in house as well as through
external institutes to maximise the output (Zhu, Zhang and Shen, 2012). However, this

flexibility may get disturbed after standardisation where all the sites will have to follow
the uniform procedures in every task.
 Less competitive: The firms may less competitive in the market due to standardisation as
every move of the sites will be similar for both host and home country. In such condition,
LCI’s management concept and strategies will be easily predictable for the competitive
firms in various markets. Thus, it may have to face less competitiveness in the dynamic
market.
 Controlled environment: From the standardisation of the management processes, the
workplace environment becomes quite controlled (Horwitz, 2011). The dominance of the
home country in various management functions is higher which may make the office
premises more controlled. This may inhibit the individual liberty of the employees and
also the working conditions at various host country branches of LCI like Germany which
is already operating successfully.
In case of Germany, the operations are running systematically at present. However, with
the new concept of standardisation, the international manager must have to closely observe the
external environment like political, legal, cultural and social atmosphere. As per this, the
standard process of management will be applied in the company which will affect its HR policies
and practices. The management may find it difficult to match the standard process as per the
culture and social environment of the country (Marler and Parry, 2016). Therefore, the managers
must strive to work on HR practices to blend it with the culture and external environment.
Moreover, the recruitment of staff must be as per the standard process through various methods
so as to get the employees mixed up in the dynamic environment.
CONCLUSION
The HRM functions are the most crucial one in the organisations to be executed. With the
global operations of the companies in present days, the role of IHRM comes into existence. The
IHRM is a modern concept which is more pervasive due to expanding operations of various
entities in different countries. In context of present company LCI (Leisure Choice International),
the new management concept related to global strategy is planned to be implemented. For this
purpose, the international managers are required to make various preparations regarding

management practices. The foremost impact will be evident in the context of HRM policies and
practices. The report concludes that the new concept will bring standardisation in various
operational procedures. This will have a varying impact on company at various sites of the
subsidiary branches. The company will have to take decision regarding procurement and
utilisation of human resources in a different way so as to get them adjusted within the new
environment.
Apart from the recruitment process, their training and development will be challenging
tasks as they are required to make aware of cultural sensitivity at various locations. The new
model of IHRM extensively helps the managers to make application of the required process.
Germany branch of the LCI organisation is working smoothly in the country with the help of
various strategies and processes. However, the management will be highly affected in the host
country due to implementation of global strategy in various ways. Therefore, different measures
will be adopted by the firm’s management group regarding leadership, training and recruitment
processes to get adjusted in the new concept.

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