Global HRM: Strategies, Challenges, and Influences Report

This report delves into the multifaceted world of Global Human Resource Management (HRM), exploring its strategic role in international business, including providing cross-cultural training, fostering global collaboration, building effective teams, and developing international human resource policies. The report dissects different approaches to staffing policies, such as ethnocentric, polycentric, and geocentric models, outlining their pros and cons. It also examines factors that contribute to managerial failure in foreign postings, including domestic difficulties, lack of support, and poor selection. Furthermore, the report identifies ways in which management development and training programs can enhance the value of human capital, such as cultural and language understanding, cross-cultural training, and safety protocols. It then explores the variations in performance appraisal and compensation systems across nations, considering factors like legal requirements, staffing policies, and cultural differences. Finally, the report discusses the influence of organized labor on strategic choices in international business firms, including the establishment of international labor unions and their impact on company decisions.

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GLOBAL BUSINESS IN THE ASIAN CENTURY
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6/27/2019
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GLOBAL BUSINESS IN THE ASIAN CENTURY 1
Contents
1. The strategic role of human resource management in international business.............................2
2. The pros and cons of different approaches to staffing policy in international trade...................3
3. Reasons for managers to fail to thrive in foreign postings..........................................................5
4. Ways for management development and trading programs can increase the value of human
capital in the international business firm.........................................................................................6
5. Reasons for performance appraisal systems might vary across nations......................................7
6. Reason for compensation systems to vary across nations...........................................................8
7. The ways that organized labour can influence strategic choices in international business firms9
References......................................................................................................................................10

GLOBAL BUSINESS IN THE ASIAN CENTURY 2
1. The strategic role of human resource management in international
business
 Providing cross-cultural training
The key need for the human resource in international business is to provide the training to
the leaders as well as the employees to adjust into a new culture or with different cultures
in a team and organisation (Akkermans, Brebbibkmeijer, & Blonk, 2015).
 Fostering global collaboration
While conducting business in the international market, it is relevant to collaborate with
various global stakeholders, which are done by Human resource. This may include
maintaining relation with franchisee, licensor and similar parties.
 Building teams
This is the role within the organization; this would include deciding on teams and
integrating various culture and skills to together to form a strong team and placing the
right person at the right position.
 International human resource policy
The policies of the international brand of the company could be challenging as this could
include the policies as per the host nation legal environment like labour laws.
 Compensation and benefit plans
Another key role of Human resource in international business is to develop benefit plans
to be offered to the employees and the compensation plans in order to keep the
employees motivated in a foreign nation as the employee turnover rate could increase due
to problems faced in cross cultural environment (Bailey, 2018).

GLOBAL BUSINESS IN THE ASIAN CENTURY 3
For example, Apple Inc. has been using cross-cultural teams in order to perform and develop
international products. According to the statistics, 53% of the employees are underrepresented
groups from various cultures and nation, for which human resource management has considered
various strategies to manage international management.
2. The pros and cons of different approaches to staffing policy in
international trade
There are four major approaches to international staffing policy
1. The Ethnocentric Staffing
An ethnocentric approach is staffing the major position by PCN’s that is parent country
nationals. One of the examples would be the German enterprise employee send to China
to work for the Chinese’s subsidiary. One of the examples for this approach is Japanese
firms like Sony and Panasonic (Bird & Mendenhall, 2016).
Pros:
One of the pros is Organizational coordination and control is facilitated and maintained;
it helps to ensure that the subsidiary branch of the company in the host country would
work as per the company objectives; and better managers that would provide them an
international experience and growth opportunities.
Cons:
Key disadvantages of approach include limiting HCN’s promotional opportunities; the
expatriate manager could face challenges in new culture and environment, and the annual
income package of the expatriate is very high that the local manager.
2. The Polycentric Staffing

GLOBAL BUSINESS IN THE ASIAN CENTURY 4
Polycentric staffing approach includes recruitment of HCN’s that is host country
nationals for conducting various management activities in the subsidiary companies. For
example, Royal Dutch shell has this policy.
Pros:
The key advantage of this approach is that the subsidiary would not face the language
barriers like in the case of expatriates. Moreover, the local staff motivation and morale
would be maintained, the reason being the top management would be among them only.
Cons:
The major disadvantage of this staffing policy would be the inability of the HCN
managers to have effective communication with PNC. The coordination among the parent
organization and subsidiary may be weakened or diminished due to unavailability of
boundary persons (Craig & Douglas, 2015).
3. The Geocentric Staffing
The geocentric approach includes having people from different culture and nations as per
their capability and job suitability. For example, Mercedes Benz has been using
geocentric staffing policy.
Pros:
The key pros of this approach are having the best person for the best job regardless of
their culture, nation, caste, religion, or colour. This includes procurement of best talent
and also enhances the contacts across the borders and enhances the international
experience of the company.
Cons:

GLOBAL BUSINESS IN THE ASIAN CENTURY 5
The key disadvantage would be a problem in cross cultural management and various
cultural barriers. Moreover a highly centralized controlling approach would be required
which may lead to issues like delay in decision making (Kaynak, 2018).
3. Reasons for managers to fail to thrive in foreign postings
 Domestic difficulties
Expatriate managing business in host nation may face domestic difficulties that may
include an adjustment in a new environment, timing, and most importantly without
family, in case of family is in the home nation.
 Lack of support
At the time, the support from the subordinates and other superiors in the organization in a
foreign country may not get enough support that is required. The support may include the
level of coordination and efforts from the employees in the subsidiary. Moreover, the
lack of cross-cultural training may be part of the lack of support to the expatriate
(Koryak, 2015).
 The wrong person selected as an expatriate
This is one the largest reason for the failed manager in the host nation that is the company
does not able to select the right person for this job. This will result in wrong management
skills of the person that may not be suitable in the foreign market. For example, if the
person selected for managing business in foreign market may not have the ability to learn
new things or may not be good in cross culture management, this would lead to failure in
dealing with language and other cultural barriers in a foreign country (Sohal, 2008).
For example, John Ross failed at the initial level while managing the business for XCO china.

GLOBAL BUSINESS IN THE ASIAN CENTURY 6
4. Ways for management development and trading programs can
increase the value of human capital in the international business firm
 Cultural and Language understanding
The company can provide language and other cultural understanding to expatriate in
order to make their journey to the new nation easy. For example, an expatriate to China
of an Australian company would require this step for a longer time before going to
abroad, the reason being the culture is different to the maximum extent.
 Cross cultural training
In the case of global companies, cross-cultural training is one of the major ways that the
trading programs could include to add value to the human resource. This would include
introducing human resource with various culture with whom they have to work with and
the ways to work in cross cultural team. For example, Mercedes Benz is having a
geocentric staffing approach, which makes this program or training an essential step for
the company (Asfaw, Argaw, & Bayissa, 2015).
 Safety abroad
This is one of the key steps taken in case of expatriate being send to abroad. The
company then provide them support through safety program that may include various
required skills training, their routes from work to home, living space and facilities, their
family arrangements in a foreign nation (wps.prenhall, 2019).

GLOBAL BUSINESS IN THE ASIAN CENTURY 7
5. Reasons for performance appraisal systems might vary across nations
Performance appraisals are considered to be one of the major element of performance
management which includes the process of identification, observation, measurement, and
development of personnel’s in enterprises. The performance appraisal system could be
implemented with standardised why the reason being it may lead to diminished in inconsistent
communication between subsidiary and parent company. In addition, it is the complex process in
case of appraisal system across nations because there is no specific mentioned method of
appraising the performance in distant nations. There are several differences between two nations,
which may be the major cause for complex “performance appraisal system” that is the
environmental factors like legal, societal, physical demands, economic demands, which may
influence the process of performance appraisal. Other various variables that may influence the
system are the language barriers, cultural differences, value differences that are responsible for
making the process more complex (Baker & Bowen, 2015).
A person who is responsible for evaluating the subsidiary company employees must be
considered the cross cultural interpersonal qualities, laws and customers of another nation,
employees sensitivity towards the norms of another nation, employees adaptability, and most
important the unpredictable conditions. Moreover, the chances of biasness in such case could be
increased which needs to be considered by the management at the tie of appraisal or selecting the
person or team to evaluate the employees at a subsidiary organization. The system is different for
different nations as well or example, the collectivist cultural nations and the cultures with high
power distance, are more fond of the use of unsystematic and informal appraisal method and in
Chinese culture it is found inappropriate for individuals at lower position to share their opinions
regarding their superior positions (sietar, 2019). For example, Nike Inc. is a parent company with

GLOBAL BUSINESS IN THE ASIAN CENTURY 8
various subsidiaries in other nations like Nike Japan Corp, Nike Hong Kong Limited. The
performance and appraisal in Nike Inc. may be direct and easy, and on the contrary, the parent
company is not aware of the employees in a subsidiary, which result into different appraisal
system that would include delegation of authority to subsidiary heads (Calboli, 2015).
6. Reason for compensation systems to vary across nations
The compensation system in the international market would differ from that of nation business,
the key reasons include
 Legal requirements
Compensation is the remuneration amount paid to the customer that is also dependable
upon the nation’s legal policies applicable to compensation. For example in the USA, the
key amount included in compensation includes basic salary, long-term incentives, bonus,
and other perks and benefits (Recker, 2013). However, in the case of Europe the
compensation paid to employees are quite less that the Americans, nevertheless, the
rewards and benefits are better than American (Roth, 2017).
 The international staffing policy
The compensation system would depend upon the type of policy a company is following
while going international. For example, in the case of ethnocentric approach the
compensation level would be high due to change in place of living for expatriate. On the
contrary, the polycentric approach leads to lower compensation level, depicting different
compensation in domes and international business (McLean, 2017).
For example, McDonald global compensation system includes reviews from local managers and
suggestion for compensation system in a foreign country.

GLOBAL BUSINESS IN THE ASIAN CENTURY 9
7. The ways that organized labour can influence strategic choices in
international business firms
Establishment of international labour unions – international labour unions would be established
and would be limiting the strategic choices, as they would be working for their member's job
security, conditions, and pay (Nolan & Garavan, 2016). For instance, international companies
generally select to locate their business at various foreign locations, where the labour is available
and considered labour harmony and peace for that matter (Curry, 2018). Labour can increase
threatened disruptive behaviour or objections against companies for their member’s benefits.
They may fight for laws in order to restraint the entry of a firm in a new international location
and limit the strategic choice (Chudal & Sourander, 2017).
For example, organized labour may attempt to achieve regulations of the companies through
various international bodies like the United Nations.

GLOBAL BUSINESS IN THE ASIAN CENTURY 10
References
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Effectiveness of a career development intervention for young employees. Human
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Asfaw, A., Argaw, M., & Bayissa, L. (2015). The impact of training and development on
employee performance and effectiveness: A case study of District Five Administration
Office, Bole Sub-City, Addis Ababa, Ethiopia. Journal of Human Resource and
Sustainability Studies, 3(04), 188.
Bailey, C. (2018). Strategic human resource management. Oxford University Press,.
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perspective. Scandinavian Journal of Management, 31(1), 25-39.
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