International Human Resource Management Report: Japan vs. Australia

This report provides a comprehensive analysis of International Human Resource Management (IHRM) practices, contrasting the approaches of Japan and Australia. It begins with an introduction to IHRM, emphasizing its significance in multinational enterprises (MNEs) and the challenges posed by globalization. The report then delves into the cultural background and HR practices of Japan, particularly focusing on recruitment and selection (including ethnocentrism), development and learning, and reward and performance systems. It compares these practices with those of Australia, using Hexaplex Company as a case study. The report further examines the impact of differing industrial relations (IR) practices on Hexaplex's HR functions, structure and activities. Finally, it explores the merits of a global code of conduct in guiding HR practices within a global context, offering recommendations for Hexaplex's operations in Japan. The report concludes by summarizing key findings and reinforcing the importance of understanding cultural nuances in IHRM.

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INTERNATIONAL HUMAN RESOURCE MANAGEMENT
By (Student’s Name)
Professor’s name
Course
University
City and State
Date

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International Human Resource Management
Introduction
Multinational enterprises (MNEs) across the world are struggling in coming up with
human resources that meet the demands of globalization network market. Concerning the talent
pool coordination, Japanese companies, for instance, have substantially relied on their nationals
in their headquarters or subsidiaries. International Human Resource Management (IHRM) is
concerned with the handling of activities within a Multinational company (MNCs) in a strive to
attain the organizational goal and pursuit of competitive advantage (France-Harris et al., 2019,
2). There are a variety of issues about IHRM, which include a variety of international models,
the issue of convergence and divergence, and cultural complicities that are inherent in a
multinational setting (Haak-Saheem, Festing, and Darwish, 2017, 2694). The various
international organization models include decentralization federation, are coordinated style with
sophisticated management tools, a centralized hub, or a transnational model with
multidimensional strategies (France-Harris et al., 2019, 3). Besides, some nations and trade
union and industrial relations bring constrain in the workforce management with others have
developed a beneficial mechanism for MNCs HR functions. Research by Downing et al.
highlights the main drawbacks for MNEs in an international setting as poor consumer practices,
financial breaches, and unfair employment practices (Downing et al., 2015). The paper attempts
to discuss the industrial relationship characteristics of Japan, comparing it with Australia in the
plight of Hexaplex Company, and critically analyses the merit of the global code of conduct.
Cultural Background and HR practices of Japan

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Hexaplex is an Australian global manufacturer of premium decorative paints and is
focusing on worldwide coverage. The company aims at establishing a manufacturing plant in
Japan. It is, therefore, crucial to understand the prevailing HR dynamics which prevail between
the two countries. Understanding the background and Cultural practices for Japan sets up the
ground for the formulation of principles that accommodate the inherent differences (France-
Harris et al., 2019, 4). It is, therefore, essential to analyze the key differences in recruitment and
selection, learning and development, and rewarding and performance practices in Japan setting,
which will help Hexaplex to come up with informed decisions that do not violate the norms and
culture of Japan.
Recruitment and Selection
Recruitment and selection aim at creating a pool of qualified workforce, which includes
sourcing for candidates and passing them through a test to pick the best. The process of
recruitment and selection, however, varies from a county to a country hence creating a need for
any multinational company like Hexaplex first to understand the local dynamics employed.
Selection in Japan poses unique features such as ethnocentrism and culture of hiring foreigners
who have a physical resemblance to the Japanese people. At the same time, other countries like
Australia are polycentric and can hire anybody from the host country (Gock, Butt, Santes, and
Farell-Deninna, 2020, 1:32). It is, therefore, crucial for Hexaplex to understand these unique
inherent traits about recruitment and selection in Japan.
Ethnocentrism is prevalent in Japanese recruitment and selection practices.
Ethnocentrism refers to the perception of one’s culture as natural or corrects (Bruce, 2020).
Ethnocentrism influences social interactions and the way individuals exchange information

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bringing a veritable plethora of values, emotions, and behavior cultivated by culture. A survey on
the literature on the empirical comparison of Japanese and America show that Japanese score
higher on an ethnocentric scale (Keith, 2019). Ethnocentrism in Japan is mainly witnessed in
preferring the Japanese for the top management positions (Gock, Butt, Santes, and Farell-
Deninna, 2020, 2:03). Further studies carried out by Conrad supports the hypothesis, and Meyer-
Ohle, they found that Japanese companies are likely to select their nationals or graduates from
Japanese Universities compared to national from other countries or the people with a physical
resemblance to their people (Conrad, and Meyer-Ohle, 2019, 2526). Hexaplex Company must,
therefore, understand the Japanese culture so as to avoid conflicts in their HR systems.
Development and Learning
According to Vance and Paik, Japan's development and training culture is aimed at
developing firm-specific knowledge among their workforce and aims at long-time employee
dedication (Vance, and Paik, 2015, 24). The country seeks to have its workforce multiskilled in
an aim to keep their employee for a longer time. The development and learning culture in Japan
HR systems does not show significant variations from Australia and other countries. Australia
focuses on workplace culture assimilation and a more casual approach than japan (Gock, Butt,
Santes, and Farell-Deninna, 2020). Hexaplex Company should, therefore, in cooperating
positive practices in development and training in an aim to forester growth and sustainability.
Reward and Performance
Japan exhibits a uniquely rewarding and performance HR practice compared to other
countries. Japan heavily base their reward systems on seniority whereby compensations,
promotion, and other benefits increase with the time you have been in the organization (Gock,

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Butt, Santes, and Farell-Deninna, 2020, 10:17). According to Studies by Peltokorpi, the
seniority-based reward system in Japan and other Nordic countries base pay is classified into
expertise or age, in which the former advance with skills gained and automatically with
occupancy on the collection of firm’s specific knowledge and abilities with time (Peltokorpi,
2019, 2560). Australia reward systems are much more performance-based, with employees being
promoted through rows faster if they are high achievers.
The long term Fixed Employment System
Japan has a lengthy-term fixed employment policy that absorbs young employees
immediately after high school or graduation and keeps them in the same organization until there
retirement span of 55 years. The trend was begun during labor shortage as a way of guaranteeing
a reliable workforce (Reich, 2018, 5). The country beliefs that new hires are not immediately
productive hence train their young people through regular job rotates.
Impact the IR Practices May Have On the Way Hexaplex Conducts Its HR
Activities/Functions/Structure
Hexaplex is an Australian company that employs different HR practices as compared to
Japan. Hexaplex uses a polycentric approach to recruitment and selection, focuses on cultural
assimilation, and more casualties in learning and development, and unlike Japan, their rewarding
system is performance orienteered. The method adopted by HR will bare a significant impact on
the business.
Ethnocentrism will harm the polycentric Hexaplex Company. When ethnocentrism is
employed in the staffing approach, it detrimentally limits the promotion and development of
opportunities, which may have effects of increased dissatisfaction and reduced turnover (Reich,

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2018, 5). Adopting polycentric culture in an ethnocentric setting would further result in
challenges where foreigners would be seen as technically unqualified. Studies by Vance and Paik
on ethnocentrism environment carried out in Singapore examining the attitude and perception of
local managers towards expatriate colleagues show that local managers where openly resentful
and often considered them technically unqualified and reluctant to adopt local culture (Vance,
and Paik, 2015, 234). Polycentrism has a powerful advantage of providing qualified staff with
international experience (Gock, Butt, Santes, and Farell-Deninna, 2020, 10:1710; 50).
Polycentrism presents an opportunity for effective globalization, transferring knowledge, skills,
and expertise across two states through a pool of senior executives with international experience.
However, polycentrism may be faced by the critical problem of the language barrier, cultural
differences, and productive interaction between the two countries, which may result in
management gaps.
The tendency to train employees and keep them or a long period of time, as exhibited in
the Japanese workforce culture, has a vital positive outcome. According to Abegglen, the pattern
of long-term employment at a single company in Japan brings forth reinforcement in emotional
identification between the staff and the institution translating to personal. Corporate and family
success (Matanle, 2016, 43). Lifetime employment further lays down foundations for social
interactions. Abegglen studies have been supported by several other scholars who view the
Japanese model as the success factor behind it leaping ahead of the Anglo-American system
(Matanle and Matsui, 2015, 14). However, several kinds of research have attributed the staffing
style with various drawbacks such as reduced talent pool, managerial difficulties as some
employees develop autonomy over their sphere, which makes it hard for new managers to

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impose disciplinary measures (Matanle, 2016, 4). The culture may further limit career mobility
among employees who may act as a discouraging factor.
Japanese performance reward systems are tenure based while Hexaplex has adopted a
performance-based rewarding policy. According to Forbes, 87% of companies recognize a
tenure-based rewarding system; however, the program offers zero impact on any organizational
performance, as their primary goal is just to stay on the payroll (Leach, 2017, para. 1). Tenure
based reward system has presented insignificant effects on performance. Other studies show that
employees are motivated differently, while some want monetary benefit; others wish to a
guarantee of their tenure in the workplace; hence tenure-based rewarding systems would work
best for them (Okabe, 2019, 588). Besides, some nations and trade union and industrial relations
bring constrain in the workforce management with others have developed a beneficial
mechanism for MNCs HR functions.
Merits of a ‘Global Code of Conduct’
The global code of conduct is concerned about setting up international labor standards
that guide HR practices amid globalization. International labor standards are firstly concerned
about developing a path to full employment productivity and decent work for everyone. The
global code of conduct is firstly concerned about developing people as human beings, as outlined
in the Philadelphia declaration of 1944 (Sagafi-Nejad, and Dunning, 2018, 4). The code of
conduct advocates for the treatment of labor not as a commodity but as part of everyone that is
fundamental for dignity and well being of the human race. The global code of conduct further
sets a legal framework for fair and stable globalization to govern trade, hiring, and behavior
while doing business operations in any country. The code also calls for respect of the individual

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treating every employee with dignity regardless of nationality, race, or ethnicity. In the
commitment to integrity, the global code of conduct advocates for complying with the set laws of
the countries you are investing in. The universal code of conduct believes in discrimination and
harassment-free environment that creates an atmosphere of open communication, trust, and
mutual respect among all the stakeholders. Besides, the code advocates for diversity and
inclusion in the workplace hence advocating for the polycentrism approach to HR practices t
inspire creativity and innovation. Another crucial aspect brought forth in the code of conduct is
privacy and on confidentiality element, which prevents disclose of employee information against
their will. Finally, the guidelines are committed to protecting the health and safety of workers
around the globe.
Hexaplex should take a Global Code of Conduct approach while expanding its operations
in Japan. Japanese have productive cultural practices which international bodies may find
difficult to adopt. In the plight of cultural differences, Hexaplex should, therefore, be guided by
the international code of conduct. The system of conduct advocates for inclusivity and diversity
amid globalization. Hexaplex ought to, therefore, ensure a diversified workforce consisting of
Local Japanese people and staff from other countries, which will create a pool of experienced
and innovative workforce that will translate to the company's success. Therefore the firm must
employ local residents to blend its top management workforce. To gain trust and acceptance
among the people, Hexaplex ought to be respectful to Japanese people and their unique culture.
The guideline provides steps that ought to be followed in guaranteeing sustainability acceptance
and success of any multinational set up.
Conclusion

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In conclusion, some nations and trade union and industrial relations bring constrain in the
workforce management with others have developed a beneficial mechanism for MNCs HR
functions. Hexaplex is an Australian global manufacturer of premium decorative paints and is
focusing on worldwide coverage. The company aims at establishing a manufacturing plant in
Japan. It is, therefore, crucial to understand the prevailing HR dynamics which prevail between
the two countries. Ethnocentrism is prevalent in Japanese recruitment and selection practices.
Japan's development and training culture are aimed at developing firm-specific knowledge
among its workforce and aims at employee long-time dedication. Japan exhibits a uniquely
rewarding and performance HR practice compared to other countries. Japan heavily base their
reward systems on seniority, whereby compensations, promotion, and other benefits increase
with the time you have been in the organization. Japan has established a system that absorbs
young employees immediately after high school or graduation and maintains them in the same
company until there retirement age of 55 years. Hexaplex should take a Global Code of Conduct
approach while expanding its operations in Japan. Hexaplex ought to, therefore, ensure a
diversified workforce consisting of Local Japanese people and staff from other countries, which
will create a pool of experienced and innovative workforce that will translate to the company's
success. Therefore the firm must employ residents to blend its top management workforce. To
gain trust and acceptance among the people, Hexaplex ought to be respectful to Japanese people
and their unique culture.

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List of References
Bruce, S., 2020. Ethnocentrism | Cultural Anthropology. [online] Courses.lumenlearning.com.
Available at:
<https://courses.lumenlearning.com/culturalanthropology/chapter/ethnocentrism/>
[Accessed 6 May 2020].France-Harris, A., Burton, C., and Mooney, M., 2019. Putting
Theory into Practice: Incorporating a Community Engagement Model into Online Pre-
Professional Courses in Legal Studies and Human Resources Management. Online
Learning, 23(2), pp.21-39.
Conrad, H., and Meyer-Ohle, H., 2019. Overcoming the ethnocentric firm?–foreign new
university graduate employment in Japan as an original international human resource
development method. The International Journal of Human Resource
Management, 30(17), pp.2525-2543.
Downing et al., 2015. Is It Any of Our Business? Canadian Perspectives on Transnational
Corporate Accountability (Doctoral dissertation, University of Ottawa).
Glock, B., Butt, M., Santos, G., and Farell-Deninna, C., 2020. Hexaplex Japan Group
Presentation. [video] Available at: <https://www.youtube.com/watch?
v=NNGZhiffFAw&feature=youtu.be> [Accessed 7 May 2020].
Haak-Saheem, W., Festing, M., and Darwish, T.K., 2017. International human resource
management in the Arab Gulf States–an institutional perspective. The International
Journal of Human Resource Management, 28(18), pp.2684-2712.

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Keith, K.D. ed., 2019. Cross-cultural psychology: Contemporary themes and perspectives. John
Wiley & Sons.
Leach, B., 2020. Employee Rewards Programs Are For Training, Not Tenure. [online] Unboxed
Technology. Available at: <https://unboxedtechnology.com/employee-rewards-programs-
are-for-training/> [Accessed 7 May 2020].
Matanle, P., and Matsui, K., 2015. Lifetime employment in 21st century Japan: Stability and
resilience under pressure in the Japanese management system. Emerging perspectives in
Japanese human resource management, pp.15-44.
Matanle, P., 2016. Japanese capitalism and modernity in a global era: Refabricating lifetime
employment relations. Routledge.
Okabe, N., 2019, July. Employee Satisfaction, Task Performance, and Emotional Labor: An
Empirical Examination. In International Conference on Applied Human Factors and
Ergonomics (pp. 587-597). Springer, Cham.
Peltokorpi., V., 2019. Performance-related reward systems (PRRS) in Japan: practices and
preferences in Nordic subsidiaries. https://doi.org/10.1080/09585192.2011.588033. Pp
2507-2587
Reich, R.B., 2018. Beyond outrage: What has gone wrong with our economy and our
democracy, and how to fix it. Vintage.
Salafi-Nejad, T., and Dunning, J.H., 2018. The UN and transnational corporations: From code
of conduct to Global Compact. Indiana university press.

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Vance, C.M., and Paik, Y., 2015. Managing a global workforce. Routledge.