Approaches and Challenges in Strategic HRM for International Operations

Strategic HRM.

Table of content
INTRODUCTION...........................................................................................................................2
MAIN BODY..................................................................................................................................3
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
In order to gain sustainable growth and profitability the companies require to expand their
international operations continuously. The company needs to make sure that they are have
competitive advantage in the market in order to survive and businesses already know that their
human resource is the ultimate source which can give them competitive advantage in the market.
In this report different approaches are explained which can help the company in staffing their
employee overseas in correct way. Recommendation regarding approaches which can be
beneficial for the company are also given. The challenges that are faced by the employees in host
countries are also described and ways in which human resource management can help employees
in overcoming these challenges are also given.
MAIN BODY
A) Analyse the approaches and strategies a newly internationalizing company can take to
train and prepare group of employees to work for company at overseas location.
In order to prepare and train the employees for the overseas project for a company that is new to
international market. The company can follow given below approaches in order to have proper
staff that can help the company to achieve their goals and objectives effectively and efficiently.
Right person for right job is the prime objective of the human resource management team.
Ethnocentric approach: it refers to sending the employees if parent company to the host
company. In this type of approach the management wants full control on the activities of the
subsidiaries situated in other countries (Aust, I., Muller-Camen, M. and Poutsma, E., 2018.). In
order to get full control over the management all the important positions of that subsidiary is
filled only by the personals of the parent company so that the management is under the control of
headquarters and the decisions are in the hands of only parent company. This means that the
subsidiary company needs to follow the management practices of the parent company. This
approach is followed by the company because of three reasons:
Firstly, the parent company feels that there is a need of more qualified employees and the host
country does not have employees that are qualified enough to handle the management of the
subsidiary.
Secondly, In order to maintain a unified corporation culture the parent company adopts this
approach where they can make sure that the corporate culture is unified.

Thirdly, transfer the nationals of home country who have sufficient knowledge and competency
to foreign country so that they can create value by transferring core competencies(Boxall, P.,
2018. ).
Polycentric approach: In this approach the company treats each subsidiary as a separate
entity and some of the decision making is in the hands of the subsidiary. In this approach the
subsidiaries are normally managed by the employees that are of the country in which subsidiary
is located. By applying this approach the headquarter company or the parent company will have
less control over the management and decisions of the subsidiary company. The rationale behind
this approach is that the parent company believes that the local people of the country in which
subsidiary is located know their culture better and can handle the business of subsidiary more
efficiently and effectively (Cheng, M.M. and Hackett, R.D., 2021.).
Some of the advantages of polycentric approach are firstly, the problems faced by the company
in managing expatriates gets eliminated and the cost of hiring locals or the nationals of host
country will be comparatively less expensive. Secondly, the morale of the staff of host country
increases which will make the more efficient and effective and also increases their overall
productivity.
Some of the disadvantages of this approach are firstly, there is a higher chances of conflicts
between the management officials of Host Company and subsidiary company because of the
difference in their thinking process. Secondly, there will be a lack of link between the subsidiary
and the host company which can make it difficult for the host company to exercise control over
subsidiary.
Geocentric approach: This approach is for the company that gives more weightage to
experience and knowledge as compared to nationality. Any person can apply for the post
irrespective of their nationality. Whether they belong to the country of Host Company or
subsidiary company or any third company, the ability and knowledge they hold will be the basis
for their recruitment (Di Pietro and et. al., 2021.). The companies that follow this approach like
to strategies from international standpoint right from the beginning. The rationale behind using
this approach is to get the most eligible and talented employees from around the world who can
work efficiently and effectively and can bring success to the company.