Assessing Global HRM: Standardization, Adaptation, and Effectiveness

This essay examines the effectiveness of Human Resource Management (HRM) strategies in global organizations, focusing on the balance between standardization and local adaptation. Using Amazon as a case study, the essay explores how the company attempts to standardize performance management and recruitment processes globally while adapting cultural factors, compensation structures, and leadership approaches to local markets. The analysis reveals the dilemmas in aligning different approaches toward common goals, especially with varying business requirements and diverse employee groups. The essay suggests achieving internal consistency through standardized recruitment traits and leadership roles, while promoting market adaptability based on local employee feedback. It concludes that while both standardization and market adaptation have pros and cons, decentralization and considering foreign operations as strategic business units can improve the effectiveness of global HRM strategies. Desklib offers a platform to explore similar essays and solved assignments for students.

Effectiveness of HRM

Introduction
• Global HRM practices should have both standardization and local
adaptability
• Standardization is important to maintain the uniformity
• Local adaptation is important to have higher effectiveness in the
market (Smale, Bjorkman and Sumelius 2013)
• Probability of challenges is high in coordinating between the two

HRM strategy of Amazon
• Performance management approach of Amazon is uniform across
the world
• Employees are appraised in standard manner across the world
• Growth and promotion process is also standardized (Edwards et al.
2016)
• This enables in international allocation of the employees from any
regions

Cont.
• Cultural factors are locally adapted
• Paid holidays and leave benefits are different
• Approach of leadership is also different
• Compensation structure is also different

Proof of standardization
• Geocentric process of recruitment is followed by Amazon
• Objectives of the HRM policies are same and standardized
• Performance oriented approach is followed by Amazon
globally (Cogin and Williamson 2014)
• Centralized management roles to a certain extent

Proof of adaptability
• Local market employees are selected for ground level jobs
• Tactical decision in relation to HRM is locally adapted
• Training approach is different in different countries of
operation of Amazon
• Hierarchy level is based on power distance in different
countries

Dilemma in the global HRM
• Challenges in aligning all the different approaches towards a
common goal
• Intensity of changes in business requirements in different
countries is different (Novitskaya and Brewster 2016)
• Global employees from different social and cultural groups
might not comfortable with the common HRM objectives
• Challenges in maintaining the uniformity in the HRM process
and appraise the employees in same standards

Achieving internal consistency
• Employees should be recruited based on the common traits in
order to reduce the threat of diversity
• Leadership roles across all the foreign business units should
be same and standardized
• Market adaptability should be promoted only on the basis of
feedback of the local employees
• Local level managers should be provided with certain amount
of autonomous power to deal with the ground level situations
accordingly.

Critical analysis
• Core approaches of HRM policies of Amazon are same except
the added factors
• Amazon tries to maintain the uniformity in core HRM
objectives
• Only the cultural factors are adapted according to the local
market trends
• Might have challenges in implementing the standardized
process on global basis

Recommendations
• It is recommended that decentralization process should be
initiated
• Each foreign country operations should be considered as
strategic business units
• Upper level management should comprise of host and home
country managers
• Changes should be done majorly on tactical level rather than
on corporate level

Conclusion
• Both standardization and market adaptation process are
having pros and cons
• It is difficult to align between the two components
• Different views of the global workforce are also difficult to
manage
• Decentralization will be effective in managing to some extent

Reference
• Edwards, T., Sanchez-Mangas, R., Jalette, P., Lavelle, J. and Minbaeva, D.,
2016. Global standardization or national differentiation of HRM practices in
multinational companies? A comparison of multinationals in five
countries. Journal of International Business Studies, 47(8), pp.997-1021.
• Smale, A., Björkman, I. and Sumelius, J., 2013. Examining the differential
use of global integration mechanisms across HRM practices: Evidence from
China. Journal of World Business, 48(2), pp.232-240.
• Cogin, J.A. and Williamson, I.O., 2014. Standardize or customize: The
interactive effects of HRM and environment uncertainty on MNC subsidiary
performance. Human Resource Management, 53(5), pp.701-721.
• Novitskaya, O. and Brewster, C., 2016. The impact of national context
effects on HRM practices in Russian subsidiaries of Western MNCs. Journal
of East-West Business, 22(1), pp.1-27.