International Human Resource Management Challenges: Volkswagen & HSBC

This report presents an analysis of international human resource management (IHRM) challenges faced by two multinational corporations: Volkswagen and HSBC. The introduction defines HRM and the impact of globalization, particularly in the context of Brexit. The main body delves into the specific IHRM issues encountered by each company, including labor laws, political climates, cultural values, language barriers, and religious considerations. For Volkswagen, the report examines the impact of diverse labor laws in Germany and the European Union, the influence of political instability, and the challenges of managing diverse employee values and languages. For HSBC, the report discusses similar challenges, including labor laws in Germany and France, and the impact of political climates. The report concludes with recommendations for addressing these challenges and emphasizes the importance of adapting HRM practices to the international context. The report uses case studies of Volkswagen and HSBC to illustrate key concepts and challenges in IHRM.

Human Resource Management

Table of Contents
INTRODUCTION...........................................................................................................................1
Main body........................................................................................................................................1
Company 1: Volkswagen.......................................................................................................1
Company 2: HSBC.................................................................................................................5
Recommendations..................................................................................................................8
CONCLUSION................................................................................................................................8
REFERENCES..............................................................................................................................10

INTRODUCTION
Human resource management is a concept through which business become able to
manage all their workforce in an appropriate and effective manner (Alfes and et. al., 2013).
Hence, for dealing with diverse situation, managers need to recruit such personnel whom are
highly talented and accept all challenges, for this context, firms adopted concept of internal
human resource management perspective. “Recently economic globalisation has been rocked by
a series of political shocks, life is not what it was”. This statement stated for many business
association whom are working in United Kingdom and European Union and face so many issues
at the time of Brexit. This political shock is not appropriate for long term growth and thus,
globalisation impacted business badly. Hence, to deal with these problems, business need highly
skill employees but international human resource management face many issues or challenges a
such point of course which are: labour laws, political climate, values and attitude, language, role
of religion. The two major organisation on which project is based: HSBC and Volkswagen.
Main body
Company 1: Volkswagen
International HRM is a process of procuring and allocating resources effectively by
utilising them while integrating the balance and differentiation of HR activities at foreign
location. Volkswagen AG internationally known as VWAG group is an automotive organisation
is a German manufacturer. It was founded in the year 1937 on 28 May in Germany in Berlin with
100 production facilities in 27 countries. There are many innovations are taking place into
business with change in time frame and every time human resource manager enable business to
deal with such context properly. But there are several issues are determine which face by an
organisation at the time of dealing at HRM in internal perspective. Political situation is not stable
in nature at every place which stated that business have to modify there policies and procedure
with time frame. Along with this, economic condition always impacted on business operations.
Thus, several issues or challenges which face by IHRM are stated as follow:
Labour laws: International business is conducted in the maze of various laws and regulations
which enable an association to manage their diverse range of activities (Baum, 2016). Thus, for
multinational business association parent country have differ laws on the other hand at macro
environment laws are different. Thus, Volkswagen have to determine labour laws which are
incorporated in Germany as well as in European Union. Hence, when Brexit lead to take place it
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will also lead to made impact upon Volkswagen operations because there laws which are
incorporate for labours get change (Labour law, 2018). Labour laws can be a major issue for a
company in which they evaluated that at the time of Brexit all policies which are concerned with
employees get change in UK as well as in EU and thus create problem in front of VWAG.
Hence, this major issue or a problem have to deal by managers of a company in an appropriate
and effective manner so that better working practices could be promoted.
Political climate: Moreover, government also play an important role in order to manage
activities of multinational corporation (Brewster and et. al., 2016). Volkswagen is a German
based company which is democratic nation of a world. But when they start dealing in European
Union, there are various nations are already indulge into it out of which UK is a constitutional
monarch where Queen is a only personality whom have a right to frame laws and regulations.
Thus, this is another major issue for IHRM because, HR manager of a company have to under
take this consent in account properly and try to modify their work according to the nature of
government. Another major issue which face by Volkswagen is political-climate-change in
which Queen modify their working conditions at any time. A major change was determine at the
time of Brexit which was not appropriate for business and thus they lead to modify their internal
policies as well as external policies which are concerned with trading. Hence, it will create
barrier for employees to deal with and thus, HR manager of a company have to adopt suitable
steps to deal with.
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Illustration 1: Political climate
(Source: Landells, 2013)

Values and attitude:Value and attitude of every person is differ from each other and this is a
major issue for every association (Clark and et. al., 2016). There are many issues and conflicts
arise at local level or domestic level of firms because every individual values and mind set is
different from each other. Hence, human resource manager of a company have to provide
appropriate training to each and every individual properly and determine about their values and
attitude as well so that suitable dealing with such people become possible. Volkswagen is one of
a largest automotive manufacturer in the world whom are providing quality based products. But,
a major issue which might face by an association HR manager at international level is to take
care about every personnel value and attitude. Germany is a parent company and HR manager
better know about each and every individual but when they lead to deal at globalised level
chances of taking every employee in consideration is not a easy thing. Values and attitude work
as a major issue for a company because most of the when an association is dealing at global
level, face a problem in which all employees belong to differ state of feelings and values. Thus,
VWAG HR manager determine that this is a major issue or problem for a company because there
are diverse range of employees are working which belong to distinct groups, age and gender.
Thus, this might create problem of increase in employee turnover as well as conflicts internally
which impacted on performance of a company as well.
Language:Every person speak and belong to distinct society and have differ nature of working
as well. Thus, language create an obstacle for every manager of company when they start
dealing at another country. It is a duty of manager to combine a team whom are belong to similar
nature but some of them have to be belong to different culture and speak differ language as well.
But this might create issue in front of management specially in front of HR. At international
level, many people are working in a MNC whom speak varieties of language. Thus, to deal with
them whenever management make a video conferencing become hard to communicate with
them. Moreover, communication is a best source of success behind every successful association.
Volkswagen managers have to speak and communicate such language properly which is
understood for every personnel. Hence, it is a type of issue or a challenge for IHRM practices at
Volkswagen which impacted their profitability and productivity as well. VWAG faces a problem
of language when they dealing at Global level. At such point of course they are German based
manufacturer and based on past ethics and values as well. Hence, language might impacted on an
association as a barrier in which chances of linguistician issue are high. Moreover, when they
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start daling at global level, business managers need to speak English whether many of their top
level management wants to prefer their mother tongue on the place of others.
Role of religion:At every country, religion play an important role because at every country
where multinational corporation is working may be differ relation are taking place (Jackson,
Schuler and Jiang, 2014). Thus, number of holidays also get planned by management according
to them. Moreover, it is a duty of HR manager to respect every person whether they are belong to
any religion. Hence, IHRM faces this major issue while they are operating different number of
activities in which religion play an appropriate role (Keohane and Olmstead, 2016). Volkswagen
is a multinational corporation where different people are working and have various beliefs ad
values. Thus, management have to understand this thing or if they imposed their culture on such
employees their interest get impacted. Moreover, this will create challenge for a business when
they operating at global level.
Volkswagen have to prepare appropriate strategy or scheme for business so that they can
deal with such issues and problems effectively. Hence, when operations are taking place at
international level they have to respect every personnel with beliefs and values as well.
Moreover, HR manager have to create an environment where they provide a freedom of speak
any language or frame appropriate language when communicating with higher authority. Thus,
all these consents have to take in account by HR manager of a company when they are dealing at
international level and create a platform for International Human Resource Management so that a
sufficient balance could be maintain in an association and better and appropriate results could be
pronounce properly.
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Company 2: HSBC
HSBC is a financial and banking industry whom are operating from last 152 years around
the world. It was founded by the Sir Thomas Sutherland and have good growth rate in market as
well. HSBC has around 3900 offices in 67 countries with have a customer base of 38 million. In
2014, Forbes stated that HSBC is a sixth largest public in the world which stated that they are
operating in an appropriate and effective manner. Moreover, on regular basis employees
encounter with differ number of people whom visit into bank for various purpose. Thus, HR
manager have to recruit such personnel in an association whom are charged with their duties
properly and deal with every kind of user in an appropriate manner. Hence, HSBC also face
several issues or problems which related with business are stated as follow:
Labour laws: These are several regulations which frame by government of legal bodies with an
aim to maximise the chances of ethical working (Messersmith and Wales, 2013). It is a duty of
managers to implement such HR policies which prepare as per laws and take all labour laws in
consideration properly so that better and effective working could be promoted. Thus, a basic
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Illustration 2: Hofstede's model
(Source: Hofstede's model, 2015)

differentiation between two countries legislation are imposed as follow in an appropriate and
effective manner.
Labour laws of Germany:
Employee Leasing Act: Company must give written employment contract that reflects key
aspects of their relationship with employers. It will include how work will be performed, about
parties of contract, gross salary, vacations, start of employment, working place and about notice
periods. Sometimes company agrees on limited terms but not full points of act that will create a
barrier in HR operations in Germany.
Holidays Act: It is mentioned in law that vacations of 20 days should be provided for employees
who work normal five working days and it extends up to 25 days according to seniority. For
selected corporate house vacations depend on other factors and commonly this is not provided to
every employees. In every country, holidays dates are differ from each other and thus, managers
of HSBC have to provide appropriate holidays to each and every person according to their
religion so that chances of issues get reduce. But as a financial service provider company faces
so many problems because these holidays reduce their interest rate as many countries signifies
that they provide tax rebate on holidays.
Labour Laws of France: There are several laws for welfare of employees and these stated below:
According to French labour law there is a provision of 35 hours work week that is down up from
39 hours but sometimes company needs more working hours of employees but it has to take
government permission that is big obstacle in target achieving.
Dealing with conflicts company need to consider all labour laws in which type of conflict that
raised is described.
Political climate: A major thing which impact upon various activities of business are political
climate of a country (Reiche, Mendenhall and Stahl, 2016). Government stability is an essential
factor for every association especially dealing at global level otherwise frequent change in
policies impacted business operations most in nature. Hence, HSBC have to evaluate UK
political environment properly so that they can commence their business effectively. Like if
HSBC wants to operate in China then they have to determine their political climate properly
which stated that laws and government of China is stable in nature and they frame various
legislations in order to maximise economy. Thus, HSBC have to evaluate all elements of
government properly and take each and every regulation in account properly (Political climate to
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address environment, 2018). HSBC managers have to underpin about all political conditions of a
country when they start recruiting and selecting employees. Although, many times, business
employees take their own decision but suddenly management change their policies and imposed
that all related aspects decision need to carry down by top management.
Values and attitude: Positive employee attitude: When employees are very they positive about
their work HR personnels don't need to focus more on that employees and they will create low
employment cost to employer and less need of training and development.
Employee Loyalty: If an employee is very loyal to company he does not need more HR practices
to be focused on him and it makes HR practices less complicated and generate low cost of
employee's satisfaction.
Self commitment for obtaining goals: If an employee feels that he is responsible for generating
outcome for corporation he will with his inner motivation and HR manager need not to motivate
him and it will lowers the motivation cost on that employee.
HR Practices became more complicated when employees don't have sufficient faith in
organization at that time HR personnel need to take effective action to create trust of employee
for company because if they are not able to generate trust it will rise retrenchment cost and if
they continue with him it will rise employee cost on employer so both the cases are loss for
corporate house. And it arises more HR policies for those employees.
Language:Another major thing which affect IHRM is language which adopted by management
when they are dealing in different countries. It is essential for business to evaluate the parent
country language properly for internal communication on the other hand when communication
lead to take place at international level then management have to choose a common language.
But some times employees resist to adopt such language and communicate in their parent
language which create barrier in order to understand it by HR manager properly and thus chances
of conflict get create. HSBC have to make their business language culture sensitive where every
language spoken person treat gratefully and with dignity as well. This will support HR
management to motivate employees as this stated that management respect about their mother
tongue and a freedom is reflect properly in order to make things correct and appropriate.
Role of religion: Religion play an important role in business operations where management have
to evaluate about role of religion properly so that they become able to take appropriate decision
by respecting every diligent. Thus, HR manager have to provide relief to each and every
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employee of a company so that they get motivated towards their working and with more and
more encourage and motivation. Moreover, if a company is dealing at global level, there are
more and more number of countries are operating. HSBC have branch all over the world and this
stated that at IHRM level management have to provide holidays according to employees religion.
Like if a business is operating in India, then HR Manager have to provide holidays to employees
according to Indian schedule.
Recommendations
Volkswagen and HSBC both determine various issues and challenges while dealing at
global level. Thus, it is a duty of HR manager of a company to find out the best talent whom are
responsible with charged duties and enable an association to grow and manage activities. Thus,
appropriate suggestion regarding issues of international human resource management are stated
as follow which have to critically take in consideration:
Labour laws: There are various laws are regulated in German related with labours but in UK all
laws are differ as per their area of commencement. Hence, both associations have to take in
consideration about regulatory things properly so that suitable working could be manage. HSBC
is operating in UK and if they are dealing in other country then they have to follow all rules
according to such scenario. This enable them to operate in an appropriate and effective manner.
Political climate: Another major thing which have to take in account by HR managers of both
organisations have to consider political climate properly. If government of country in which
operations are taking place are not favourable in nature then business operations get impacted. If
government is not stable in nature then chances of risk are high and thus, overall international
human resource management get affected as well.
CONCLUSION
It get concluded from the project that international human resource management is a
concept which adopted by many multinational corporations whom operated from parent country
with an motive to gain and select such talent which have better and appropriate talent. Thus,
there are various issues face by organisations in order to implement and execute IHRM in an
appropriate and effective manner. Every issue or challenge work as a barrier for HR manager of
a company which impacted upon their activities. Although, it is a duty of manager to frame their
strategies in such manner so that such challenges get overcome like language, political climate,
role of religion, values and attitude, labour laws etc. All these are several issues or problems
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which face by many multinational corporations at the time of executing operations from one
place.
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REFERENCES
Books and Journals
Alfes, K. and et. al., 2013. The link between perceived human resource management practices,
engagement and employee behaviour: a moderated mediation model. The international
journal of human resource management. 24(2). pp.330-351.
Baum, T. ed., 2016. Human resource issues in international tourism. Elsevier.
Brewster, C. and et. al., 2016. International human resource management. Kogan Page
Publishers.
Clark, W. C. And et. al., 2016. Boundary work for sustainable development: natural resource
management at the Consultative Group on International Agricultural Research
(CGIAR). Proceedings of the National Academy of Sciences. 113(17). pp.4615-4622.
Jackson, S. E., Schuler, R. S. and Jiang, K., 2014. An aspirational framework for strategic human
resource management. Academy of Management Annals. 8(1). pp.1-56.
Keohane, N. O. and Olmstead, S. M., 2016. Introduction. In Markets and the Environment (pp.
1-10). Island Press, Washington, DC.
Messersmith, J. G. and Wales, W. J., 2013. Entrepreneurial orientation and performance in
young firms: The role of human resource management. International Small Business
Journal. 31(2). pp.115-136.
Reiche, B. S., Mendenhall, M. E. and Stahl, G.K. Eds., 2016. Readings and cases in
international human resource management. Taylor & Francis.
Online:
Hofstede's model. 2015. [Online]. Available through:
<http://www.devond.com/en/tools/hofstede-model/>.
Labour law. 2018. [Online]. Available through: <https://www.britannica.com/topic/labour-law>.
Landells, E., 2013. Organizational political climate. [Online]. Available through:
<http://www.sciencedirect.com/science/article/pii/S1053482212000575>.
Political climate to address environment. 2018. [Online]. Available through:
<http://www.baltimoresun.com/news/opinion/oped/bs-ed-op-1010-political-climate-
change-20171009-story.html>.
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