International HRM and Macro Factors

This assignment delves into the impact of macro-environmental factors on international human resource management (IHRM). It examines cultural dimensions, market influences, and global business challenges faced by multinational enterprises (MNEs). The analysis focuses on the UK market as a case study, considering Mackies Crisp's potential entry strategies. The report outlines various approaches to IHRM and the complexities of recruiting employees in diverse international settings.

MANAGING
INTERNATIONAL
BUSINESS

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
TASK 2............................................................................................................................................3
TASK 3............................................................................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES ...............................................................................................................................9

INTRODUCTION
International business is the trade which is done beyond global boundaries of the country.
Managing international business is the task in itself. Efficiency is needed to handle or manage
these types of businesses. There are many methods which can be used to make the organisation
better internationally. Mackie's is the Scottish company that provides different types of crisps to
their customers (Wild, Wild and Han, 2014). They expanded their business in many countries.
This report includes about the critical macro-environmental factors that can influence Mackie's
Crisps international business activities and are likely to impact on company's operations.
International human resource management approaches are discussed in this report. Suitable
approach for the cited organisation is recommended here as well. Further, management style of
business and approach to the typologies of national culture within a country are discussed.
TASK 1
Mackie's Crisps is currently working with many countries which make them to manage
their international business activities. There are many macro environmental factors which
influence the management of international business.
Macro environmental factors
These factors can be analysed and evaluated by PESTLE model. This model includes
many external factors which have impact on business operations of cited organisation. These
factors are described as below: Political factors- Every country has different rules and regulations of trade. Company
doing business with many countries should be updated with all the policies of
international business. Mackie's Crisps work according to different business policies of
country with which it is dealing. This can be very hard to maintain and do operations
because of these rules (Cavusgil and et.al, 2014). It can be difficult to manage
international business if company is not updated with business rules and regulations of
country with whom they are working with. The cited organisation is dealing mainly with
UK. The country has made new free trade policy which has impacted the business of
firm. Trump is now ruling the country which has deeply impacted the political
environment. The venture is also dealing in the US, therefore there are different political
factors of the US affect the operation of the business. Such as when the country is not in
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the form of political stability, in that case income of the people decreases and they used
to decrease the spending on different products and services. Thus, it can be said that
political factors will have adverse impact over the performance of the organisation Economic factor- Economy of the country is never certain and it can deeply impact the
international business of Mackie's Crisps. Currently, the economy of UK is growing. It
positively impacts on the revenue of company. Present economic condition of country
has made cited firm to grow more and expand their operations and activities. Country is
also facing high inflation in its economic conditions. It is in news that UK will leave EU
membership in the coming years. Economy will become uncertain and unstable in this
situation. Business of cited company will be difficult to manage in these economic
conditions of country. Organisation needs to use all its strengths to sustain in this
uncertain economy. The venture is also dealing in the US, therefore there are different
economic factors of the US affect the operation of the business. Such as when the country
is facing inflation, then the prices of products will increase and it will have negaitive
impact over the demand of the products. Social factors- There is rapid change in the tastes and preferences of people which make
them to demand from the firm. The cited business is active socially and fulfils all its
responsibilities towards society. They work in the direction of making their customers
satisfied. Mackie's Crisps keeps on working for the local growth. Public of UK is going
towards making their health better (Deresky, 2017). The organisation needs to make
healthy products for their customers in country and make them satisfied. The venture is
also dealing in the US, therefore there are different social factors of the US affect the
operation of the business. Such as taste and preference of the people is toattly different
from the people of UK. Thus, they need to identify the needs and wants of the people of
UK and then produce the products and services. Technological factors- A wide range of new and innovative technology comes in market
by which companies can increase their growth and enhance market share. Using these
technologies will be beneficial for increasing the productivity of the company. There are
many new and advanced technologies which are coming in UK market. The organisation
uses innovative technology in their activities and operations. This makes them to achieve
their set and targeted business objectives and goals effectively and efficiently.
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 Legal factors- Many legal issues can arise for Mackie's Crisps because they work with
many countries. It can be difficult to maintain healthy relations with each one who is
directly or indirectly related with the operations of company. UK government has many
legislations for manufacturing industries like employment rights act, etc. The cited firm
needs to be updated with all the legislation which are to be followed by them. It will help
them to maintain healthy and proper relations. The venture is also dealing in the US,
therefore there are different laws factors of the US affect the operation of the business.
There are different laws and legislation that are being followed by the country which
need to be considered by the venture. Such as minimum wages act, employee safety etc.
 Environmental factors- There are many campaigns held in the UK for making a safe and
secured environment in country. This made the public think in the direction of using that
products which do not harm environment. The company should use those technologies in
their operations and activities which do not cause any harm to the environment of
country. The venture is also dealing in the US, therefore there are different environment
factors of the US affect the operation of the firm. The firm packaging is dependent on the
trees and other natural resources. Thus, they need to protect the trees and use such
resources which are renewable.
Thus, PESTLE analysis states that there are many factors which influence the
international management and business operations of company. There is high inflation rate in
Britain that will decrease the sales of Mackie's Crisps (Crane and Matten, 2016). Company can
also lose their customers because of the same. High inflation rates make the customers to buy the
products of lower rate then the cited firm.
Marketing strategies
There are many marketing strategies which can be made for cited organisation for
making them enter into the new market. The above PESTLE analysis states that there are many
ways by which the company market their products and services, that are as follows:
Mackie's Crisps can use many strategies which will be useful for them to enter the global market. Promotion- The company should promote its products on the social sites to attract
customers. It will help them to enter the global market. Research- The cited organisation should do proper market research in which they want to
enter.
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 Mergers- Mackie's Crisp can merge with company which is globally active. It will make
them to enter the global market.
TASK 2
International human resource management relates to managing the human resource at the
international level. This management style will help the company to achieve all the objectives
and gain some competitive advantages among their competitors.
Human resource management is very important and essential for an organisation.
Importance of HR management: There are several areas where the organisation need human
resource management so that they can handle the people in the organisation, the areas where
human resource management are needed, that are as follows: Staffing and recruiting: it is the key area where human resource management is required.
In recruitment, it plays very significant role. It is their role that they need to select the
best source of recruitment and select the best person for the best post. Efficient performance- HR management will lead the cited company to give efficient
performance. This will increase their growth in the market.
 Achievement of objectives- The firm will effectively achieve the targeted and desired
objectives. This will also help them to increase their market share.
Challenges faced by MNE's at the time international human resource management.
There are many challenges that will faced by the multinational enterprises in recruiting
qualified personnel for overseas assignments. These are some challenges which can be faced by
multinational companies while selecting employees at job in the foreign country. It can be
difficult task for companies like Tesco, M&S etc. Those challenges are described below:
 Language barriers- The global companies can face barriers of language in selecting
skilled employees. They can find difficulties in communicating with the employees.
 Understanding- It will be problem for the organisations to understand the different needs
and wants of employees. It can be difficult to keep the employees satisfied.
 High pay- Employees can demand high pay for the job which will increase the cost of
company.
Difference between HR and IHRM
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International human resource management is the wider term as compared to domestic
human resource management. Main motive of HR is to select or recruit the employees which are
suitable for the job. On the other hand IHRM wants talented employees despite of different
countries. IHRM manages all the employee's whether in different countries whereas HR only
manages the human resource of one country (Armstrong and et.al, 2015). International human
resource management deals with all the employees at three level globally. First is at origin
country, second countries where the company's branches are located and third the country from
where their employees had come.
For entering and managing emerging markets four approaches of international human
resource management are very helpful. These four approaches are as follows: Ethnocentric- This approach makes the company to think that working style which they
are using in their country can be used for other countries as well. All the rights of taking
decisions are kept in the hands of members of company at origin country only. It is very
useful for parent country (Approaches of international human resource management,
2017). It is thought that ethnocentric approach is trustworthy. For example Samsung uses
this approach human resource management. Geocentric- Best and skilled employees are selected in this approach for the suitable job
apart from their nationality. Geocentric approach of IHRM is very helpful in making the
efficient team. Better team will give better performance for the company. Resources are
allocated in effective manner. Such as this approach is being applied by the host
organisation or start-ups
 Polycentric- In this approach of international human resource management employees of
same country are recruited to work where the branch of company is situated. It removes
barriers of language and makes the company grow in foreign market (Verbeke, 2013).
This makes the local people of country satisfied. For example this approach is being used
by the financial organisation
 Regiocentric- Employees are transferred to country in which they work. Regiocentric
approaches makes the employees work in that region from they actually belong. This
approach is very helpful in making the company grow globally and increase their market
share.
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Parent country should adopt ethnocentric approach because it is very trustworthy with
that they will able to take all the decision by themselves so effective decision can be taken. Host
country should adopt geocentric approach as it will make them select the best and skilled
employee apart from their nationality. This is because all the employees are working in the host
country where production takes place, so effective employees will be needed. In the country
which is the one from where their employees had come. They should use polycentric approach
because it removes the gap of language within the organisation.
Mackie's Crisp can use the approach of polycentric in their international human resource
management. This approach will totally remove the language barriers. It will appoint the
employees from host country only. Employees will work hard for their own country. It is most
appropriate approach according to the current condition and situations in UK. Polycentric
approach will make the economy of country grow more. The cited organisation will also be
benefited by using this approach in their IHRM. This approach will be beneficial for both the
firm and the country (Hammer, 2015). It will also help the country at the time of its total removal
from EU.
TASK 3
Qualities, skills and knowledge of a specific country or group. These characteristics can
be based upon the political, social, environmental, religion culture within the country. It is
important for the company to understand the culture of place where they want to expand their
business (Hatten, 2015). For making the business grow it is important to understand the culture
of place. Their new customers will be satisfied by following their culture in the working style of
the company. Understanding the culture of country will give benefits to the organisation in the
form of increase in revenue, customers and market share among their competitors. They will also
gain some competitive advantages because of understand and proper research of culture. It is
necessary for Mackie's Crisps to enter the global market. Every country has different culture
which is needed to be understood by firm to grow at that place. The cited company will have to
adjust its management style and approach to the typologies of national culture within UK. It will
make their business grow in country and will also in making the economic growth stable or
certain. In my view culture is very important and deeply impact the workings of company.
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Organizational culture is a system of shared assumptions, values, and beliefs, which
governs how people behave in organizations. These shared values have a strong influence on the
people in the organization and dictate how they dress, act, and perform their jobs. Every
organization develops and maintains a unique culture, which provides guidelines and boundaries
for the behavior of the members of the organization.
Culture influence international business operations
Due to Globalisation, the interaction between different firms which are belongs from
different cultures has been increasing (Chaney and Martin, 2013). Therefore, in this culture
which is a manifest in behavioural norms, their assumptions are also hidden and different
individual's nature are occurring at a different stage of path are directly influencing on
international business and its operations. In this if cited business want deals with the foreign
partners then they have to conduct their operations on in effective manner only on that basis they
can easily enter into the new market and can easily deal with their partners. Different types of
cultures are there and it is really important for the company to deal with the different individual
as well as different cultures and coordinated with them properly by using languages, signs and
symbols and influencing them so that such things helps down cited organisation in increasing
their international operations. Language is a very crucial medium because it helps down the cited
business in communicating with their foreign partners and also helps them in understanding their
ideas and views (Nicholas and Steyn, 2017). So, exchange of language is very crucial for the
Mackie's crisp because it helps them in conducting their business operations across the various
nations and by using that they can easily deal with their foreign partners. Other than that there
are several other factors at which there is impact over the culture of the country, that are as
follows:
 Local and professional: A local organizational culture, employees identify with their
boss and their teammates. This type of environment risks having a low level of diversity,
since there are social pressures to act, look, and talk in a certain way. However, these
defined norms allow for a great amount of predictability. In a company with a
professional culture, employees identify with their profession or the content of the work.
 Open and closed system: In an open system, newcomers are welcomed easily. People
are inclusive and take the approach that anyone will fit in well with the organization. A
closed system is more exclusive, where newcomers have to prove themselves. Open
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cultures have managers and leaders who are approachable, and thus tend to see higher
employee satisfaction.
Four dimensions of culture to analyse your chosen country.
 Power Distance Index:In this theory people are expecting that the power is distributed
equally among them and instead of that they have to accept such power which is less than
compared to the powerful individuals. The issues are come out that how a society handles
inequalities process among people. The scores which are give In form of high and low in
which high PDI indicates society accept an unequal power and authority as compared to
the powerful individuals and in case of low PDI it means that power is shared among
individuals and a society does not accept such powers when it distributed in unequal
manner.
 Individualism vs Collectivism:It refers to the strengths of the individuals which they ties
them with other peoples within their community. A high IDV indicates that weak
connection among those individuals who are not a part of their family and here the
peoples are not responsible for others action (Bargiela-Chiappini and Nickerson, 2014).
A less IDV indicates that individuals are loyal towards such group from which they
belong and the group will also provide interest to them and in group the individuals take
responsibility of others individual.
 Masculinity vs femininity:The masculine side represents a taste and preference of the
society In terms of achievement, heroism and the reward they get for the success. The
femininity means a taste and preference of the cooperation, for which they are caring for
the weak people and also improving the qualities of individuals and they provide greater
importance to the relationship that company is having with their supervisors, individuals
and employees and they cooperate with one another.
 Uncertainty avoidance index:It expresses that at what extent the society members
feeling uncomfortable due to uncertainty and confusing situation which creates in the
market.
These all dimensions are followed in UK market which makes them grow.
Mackies Crisp will have followed many methods to set their business in this country. They can
do proper research of the market and decide their target customers it will make them sustain in
the country market.
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CONCLUSION
This report includes about the macro environmental factors which can affect or influence
the international human resource management. These factors impact the marketing strategies of
company for the new entry. There are many ways by which the company can enter into the
global market. There are four approaches of IHRM. One of the approach is selected according
the type of different countries which is Parent country, host country and the country from the
employees came. Many challenges are faced by the MNE's in recruiting the employees.
Dimensions of culture can influence international business operations.
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REFERENCES
Books and journal
Armstrong and et.al, 2015. Marketing: an introduction. Pearson Education.
Bargiela-Chiappini, F. and Nickerson, C. R., 2014. Writing business: Genres, media and
discourses. Routledge.
Cavusgil and et.al, 2014. International business. Pearson Australia.
Chaney, L. and Martin, J., 2013. Intercultural business communication. Pearson Higher Ed.
Crane, A. and Matten, D., 2016. Business ethics: Managing corporate citizenship and
sustainability in the age of globalization. Oxford University Press.
Deresky, H., 2017. International management: Managing across borders and cultures. Pearson
Education India.
Hammer, M., 2015. What is business process management?. In Handbook on Business Process
Management 1 (pp. 3-16). Springer, Berlin, Heidelberg.
Hatten, T. S., 2015. Small business management: Entrepreneurship and beyond. Nelson
Education.
Nicholas, J. M. and Steyn, H., 2017. Project management for engineering, business and
technology. Taylor & Francis.
Verbeke, A., 2013. International business strategy. Cambridge University Press.
Wild, J. J., Wild, K. L. and Han, J. C., 2014. International business. Pearson Education Limited.
Online
Approaches of international human resource management. 2017 [Online]. Available through:
<http://egolgappa.com/approaches-to-international-human-resource-management/>.
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