International HRM Practices of Tesco: A Comparative Analysis

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International Human Resource
Management
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Introduction
Human Resource Management is defined as an organization’s employees’ management as well
as development. It is endowed with the responsibility of recruiting, training, developing,
providing performance appraisal, communicating as well as establishing labor relations. With
increasing globalization, the current market has become highly competitive. HRM practices play
a significant role in enabling multinational companies in gaining competitive advantage over
indigenous companies. In this globalized era, it is highly significant for organizations to
incorporate proficient HRM team (Noe et al., 2017). HRM is seen to be playing a pivotal role in
the maintenance of harmonious industrial relations. With passing years with increasing
development in every area along with globalization, economies have become more integrated.
Multinational Companies, as a result have been seen to be strategizing for increasing their global
activity through inventing advanced management practices as well as policies. However, several
MNCs have failed to operate successfully in foreign markets due to ineffective HRM. One of the
primary reasons behind MNC’s failure in operating successfully in global markets is due to the
failure of HRM in understanding the distinction in foreign environments (Raghuram et al., 2017).
In this essay, the principal factors underpinning the differences between domestic and
international HRM of Tesco will be discussed. Tesco is known as the multinational retailer of
general merchandise and groceries, which is based in UK and has its headquarter. The company
operating in 6,800 shops has a net income of 1,320 million (tescoplc.com. 2018).
Discussion
Human Resource Management is described as the management as well as development of an
organization’s employees. It is concerned with the recruitment, training, performance appraisal;
development, communication as well as labor relations. The current market has become highly
competitive as well as globalized in this globalized era. Multinational Companies are seen to be
primarily rooted to the national business system of their country of origin. Hence, they are under
the continuous pressure for maximizing the advantages of global coordination with the
maintenance of responsiveness to differences at national, regional or local level. This leads
MNC’s to ‘act paradox’ or ‘think global’ paradox. HRM is seen to be playing a pivotal role in
the maintenance of harmonious industrial relations (Cascio, 2015). There are few multinational
companies, which have incorporated HRM, which will work effectively for ensuring cordial
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relations with the labour union through active participation in their development. However, there
are few companies having HRM, which fails to maintain this harmony (Collings et al., 2016).
HR policies of specific companies are seen to be discriminating based on religion, caste, race,
sex or nationality. However, there are several multinational companies, which have been seen to
have incorporated HRM, which strive for the maintenance of equality in work and pay.
The role of HRM practices in MNCs for enabling them operate successfully in foreign operations
cannot be denied. Globalization has led to the formation of highly competitive market along with
highly integrated economy. It has become highly essential for multinational companies (MNCs)
to invent advanced management policies as well as practices for increasing global activity. With
passing years with increasing development in every area along with globalization, economies
have become more integrated. Multinational Companies, as a result have been seen to be
strategizing for increasing their global activity through inventing advanced management
practices as well as policies. This has led to the formation of internationalization of HRM.
Management of HRM in an international context seems to be much more complex compared to
the domestic context due to the differences between headquarters as well as the subsidiaries
(DeCenzo et al., 2016).
In this globalized era, it is highly significant for organizations to incorporate proficient HRM
team. The HRM policies and practices’ transfer between units of organizations as a part of
knowledge transfer is known as the process covering various stages, which start from the
identification of the knowledge to the actual knowledge transferring process to the receiving
unit’s final utilization (Brewster et al., 2016). In terms of Multinational Companies,
organizational units are referred to as the corporations’ headquarters as well as subsidiaries. On
the other hand, receiving units are referred to as the focal subsidiary. The transfer process of
HRM policies and practices occurs from both headquarter to subsidiary as well as from
subsidiary to headquarter (Budhwar, 2016).
HRM practices have significant contribution to the superior performance of MNCs in operations
within the home country. However, the transfer of HRM practices to the subsidiaries in the
foreign countries depends entirely on the MNCs (Guest, 2017). Home countries decide to
transfer of HRM practices to the subsidiaries in the foreign countries in accordance with the
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profitability. If they consider transfer of HRM practices will lead to profit maximization then it
will strategize accordingly.
As opined by Albrecht et al., (2015) HRM practices play a significant role in enabling
multinational companies in gaining competitive advantage over indigenous companies. Bratton
and Gold, (2017) have stated that in accordance with firm’s resource based theory that transfer of
HRM policies is only possible after the resources of the parent company provided pivotal sources
of competitive advantage to the MNCs, which are highly critical for the subsidiaries’ successful
operations (Brewster et al., 2016).
Human Resource Management is endowed with the responsibility of overseeing all things
regarding management of the human capital of an organization. Human Resource Management
of Tesco looks after the development as well as administering of programs designed for
increasing an organization or a business’s effectiveness. The responsibilities endowed upon the
Human Resource Management of Tesco are as follows:
 Management of job recruitment along with selection as well as promotion
 Development of benefits as well as wellness programs of the employees along with
overseeing it
 Development, promotion as well as enforcement of personnel policies
 Promotion of career development and job training of employees
 Providing newly recruited employees with orientation programs
 Providing employees with guidance related to disciplinary actions (Reiche et al., 2017).
There are several reasons why human resource management of Tesco is effective is highly
needed in the organization.
Addressing the concerns of current employees: The job of HRM of Tesco is somewhat very
distinct from that of the company managers since the latter is concerned with the overseeing of
the employees’ day to day work, whereas the former looks after the concerns of the employees
including pay, benefits, employee investments, training and pension plans. They have to deal
with conflicts between employees and managers or between employees and take effective
initiatives for resolving them (Stone et al., 2017).
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Recruiting New Employees: The HRM of Tesco is endowed with the fundamental responsibility
of recruiting potential candidates along with overseeing the hiring process as well as providing
proficient employee orientation.
Management of the Separation Process of Employee: A set of tasks are managed by the HR
management team of Tesco with resignation, firing or laying off an employee. HRM needs to do
all the paper works for ensuring the legal completion of the process.
Improvement of the Morale: Company employees may be encouraged by the HRM for giving
their best contributing to the company’s overall success. HRM is endowed with the crucial
responsibility of taking resort to Rewards and Recognition of the employees. They need to
reward employees who will deliver effective performances in order to boost their morale. This in
turn will lead to the creation of positive work environment (Wilton, 2016).
Defining and Aligning Organizational Purpose: HRM needs to ensure the efforts of employees’
aligned with the purpose of Tesco. They need to give effective training to the employees in order
to enable them in working in accordance to the goals of the organization.
Focusing on the Strengths of Employees: HRM of Tesco needs to focus on the individual
strengths of the employees and train them to bring out the best in them. Effective performance of
employees will enable organization in fulfilling their objectives.
Domestic HRM is defined as the process of procuring, allocating as well as effectively using the
human resources in local countries. On the other hand, International HRM is defined as the set of
activities that target human resource management at the international level and strives for
meeting organizational objectives along with achieving competitive advantage over other
companies (Guest, 2017).
There are several differences between domestic and international HRM of Tesco, which are as
follows:
There are mainly two major factors, which leads to the differentiation of domestic HRM from
International HRM. Firstly, domestic HRM of Tesco is concerned with the management of
limited HRM activities at national level. However, in terms of international HRM of Tesco, it
has to operate in several countries with distinct culture as well as practices, which makes it
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highly complex (tescoplc.com. 2018). This implies that international HRM focuses on the
identification and understanding of the way incorporated by MNCs for the management of
diversified workforce for leveraging the HR resources for both gaining competitive advantage in
local and global market. Globalization has led to increasing challenges and complexities for the
management of new forms of organization of management (Reiche et al., 2017).
Domestic HRM of Tesco is concerned with its internal environment as well as local environment
UK, in which, it operates. However, the international HRM of Tesco is concerned with the
achievement of balance between coordinating foreign subsidiaries and requirement for
controlling foreign subsidiaries. Besides, it is concerned with the need for adapting to local
environments as well.
Domestic HRM of Tesco is focused on the management of limited HRM activities at the national
level. However, International HRM is focused on the management of additional activities, which
includes expatriate management.
The external environment does not have any effect on domestic HRM of Tesco, which is why it
is less complicated. However, International HRM (HRM) is largely affected by several external
factors including institutional factors as well as cultural differences.
International HRM of Tesco sometimes fails to function effectively due to operating in several
countries with cultural differences as well as well diversified workforce. HRM of Tesco has
taken resort to the development of distinct HRM systems, which is highly needed for addressing
several issues related to the workforce of international operations as well as management of
diversified culture.
International HRM of Tesco is seen to be addressing activities of broader range compared to
domestic HRM including international taxation, exchange rates, coordination of foreign
currencies, international relocation and international orientation for employees who have been
posted abroad. This implies that distinct policies have to make by the International HRM to look
after all the activities (Stone et al., 2017).
International HRM of Tesco takes resort to involve in the personal life of employees since it has
to look after the safety of the employees who have been posted in foreign locations
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(tescoplc.com. 2018). Moreover, it has to form policies in accordance with the laws of the
countries, including government policies as well as employment policies in which, it operates.
Referring to Bartlett and Ghoshal Model Burton et al., (2015) stated it can be said that
International Human Resources has low pressure for local responsiveness, whereas domestic
HRM has high pressure for local responsiveness. On the other hand, in terms of global
operations, International HRM has high pressure for global responsiveness while domestic HRM
has low pressure for global responsiveness.
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Conclusion
In the conclusion, it can be said that HRM practices play a significant role in enabling
multinational companies in gaining competitive advantage over indigenous companies. A
multinational company like Tesco has to incorporate both domestic as well as international
HRM. Domestic HRM is defined as the process of procuring, allocating as well as effectively
using the human resources in local countries, whereas, International HRM is defined as the set of
activities that target human resource management at the international level and strives for
meeting organizational objectives along with achieving competitive advantage over other
companies. Domestic HRM of Tesco focuses on the internal environment as well as local
environment UK, in which, it operates. However, the international HRM of Tesco focuses on the
achievement of balance between coordinating foreign subsidiaries and requirement for
controlling foreign subsidiaries. Besides, it is concerned with the need for adapting to local
environments as well. International HRM of Tesco sometimes fails to function effectively due to
operating in several countries with cultural differences as well as well diversified workforce.
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Reference List
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