The field of international HRM Essay Example

and may conflict with local conditions. This can create ethical dilemmas when a practice is legal and acceptable in the host country but unethical or illegal in the home country. Expatriates face international taxation, resulting in tax obligations both domestically and in the host country. To ensure fairness, it is important to establish tax equalization policies that eliminate any potential tax advantages or disadvantages associated with specific assignments. These policies can become complicated due to variations in tax laws among host countries and possible delays in resolving domestic and international tax liabilities. Building good relations between the home-country government and the host-country government can help expedite the resolution of tax equalization matters.

Host Government relations: Establishing strong relationships with host governments is crucial for Human Resource Departments, especially in developing countries. In these regions, personal connections with government officials often lead to easier acquisition of work permits and other essential certificates. It is essential to maintain these relationships to address any potential issues arising from ambiguity in eligibility and compliance criteria for documentation, such as work permits. In contrast, companies locating in developed countries face higher labor costs and the HR department assumes more responsibilities such as ensuring health and safety compliance and managing taxes. However, in less-developed countries, HR departments must contend with challenges like understanding local culture, including practices like gift giving and bribery, in order to maintain good relations with the government.

Provision of language translation services: Effective communication across different cultural backgrounds can be highly challenging, even when individuals speak the same language. This increases the likelihood of misunderstandings. Hence, providing language translation services for both internal and external

correspondence is an additional international activity undertaken by Human Resource Departments to ensure effective communication.Translations facilities are necessary in countries where foreign languages are spoken to ensure effective communication and avoid misunderstandings. When the Human Resource Department relies heavily on language translation services, this function is often extended to provide translations for all departments within the multinational corporation. The differences between Domestic and International HRM are influenced by various factors, including the Cultural Environment. Kroeber and Kluckhohn define culture as patterns of behavior that are acquired and transmitted through symbols, reflecting the unique achievements of human groups. These cultural patterns consist of traditional ideas and values, and they shape how individuals behave, their values, attitudes towards work, time, religion, and other aspects of life. Culture is a gradual process that influences individuals in society without them always being aware of its impact on their values, attitudes, and behaviors.Hence, it is crucial for businesses to understand the cultural discrepancies in different countries before expanding internationally. In order to carry out human resources tasks like training and selection effectively, companies should take into account these significant cultural variations and craft and execute business strategies and procedures accordingly, aligning with the culture of each country.

According to Professor Michael Porter, multinational firms have two strategies: a multi-domestic strategy that emphasizes local responsiveness and grants autonomy to local subsidiaries, and a global strategy that prioritizes efficiency and necessitates coordination of policy and operations. The choice of strategy depends on the industry in which the multinational firm operates, as international competition varies greatly across industries. Certain industries, like retailing and distribution, experience mostly independent competition between countries.

Industries must adapt their international

human resource management (IHRM) activities to the host country. Success in the home country does not guarantee success in the host country. Conversely, global industries such as commercial aircraft are heavily influenced by the competitive position of the firm in multiple countries. A global industry comprises interconnected domestic industries where rivals compete worldwide.

In a multi-domestic industry, the HRM function is structured to provide international support for primary activities. Global practices help reduce costs and enable companies to compete against global competitors, customers, and suppliers. On the other hand, multi-domestic practices allow companies to adapt to distinct local conditions, including cultural requirements.The culture and thinking of large multinational companies typically include a dominant global market perspective.

Despite the fact that size does not always indicate global orientation, certain factors such as a large domestic market heavily influence multinational corporations' organizational strategies. This is evident in companies like Coca Cola and McDonald's in the United States, whose extensive domestic market impacts their business operations. As a result, these companies' senior management teams are guided by attitudes shaped by their large domestic market, resulting in a significant number of managers with primarily or exclusively domestic market experience.

However, smaller advanced economies like Switzerland tend to have a more international perspective due to limited domestic markets. For example, Switzerland has a population of only 7 million people and therefore multinational corporations based there are more likely to be globally oriented. Nestle, a Swiss-based multinational company, is highly foreign-oriented with most assets, sales, and employees located outside of Switzerland.

To effectively implement global strategies, it is essential for senior management to have an adequate supply of internationally experienced managers. However, European multinationals are

experiencing a growing shortage of such managers (Scullion, 1995).The success of a multinational company relies heavily on the senior management's strong international orientation towards corporate goals and objectives. It is common for managers to overly focus on domestic matters and assume that HRM practices can easily transfer between international and domestic contexts. However, this misconception often leads to significant disruptions in international operations. Therefore, HR managers must adopt a global mindset and develop HR policies that promote the growth of globally-oriented staff.

According to International Human Resource Management by Dowling, Welch, and Schuler, cultivating skills such as strong intercultural and communication abilities, the capacity to handle complexity, and flexibility is crucial in achieving this goal. The text emphasizes the importance of these abilities and knowledge in handling diversity and local employment conditions. Additionally, it highlights the significance of understanding specific business aims and the complexities involved in employing individuals from different countries.

When establishing operations overseas, challenges may arise including language barriers, varying attitudes, and motivation levels among host country employees (Introducing Human Resource Management by M. Foot and C. Hook).

Also, it is necessary to integrate expatriate employees into the organization and maintain a high level of communication between the host country and expatriate employees to avoid any confusion regarding roles and responsibilities. According to Edstm and Galbraith (1977), companies have three main motives for sending out expatriate employees: position filling, management development, and organization development. Position filling involves transferring technical knowledge to developing countries where qualified local nationals may not be readily available. Transfer for management development provides international experience to the expatriate manager and prepares them for future roles in subsidiaries abroad or within the

parent company. The final reason for international transfers is organization development, where transfers are used to modify or maintain the structure and decision-making processes of the organization.

In this case, international transfers are utilized as a coordination and control strategy. This strategy has two components: socializing both expatriate and local managers into the corporate culture and creating a verbal information network that establishes connections between subsidiaries and headquarters. (Source: Employee Relations Volume 23 Number 6 2001 pp.581-598)

Conclusion:

The challenges presented by operating in the global arena require additional knowledge about the specific country or countries involved, as well as the ability to communicate effectively and have intercultural awareness. My research indicates that the human resource department plays a crucial role in preparing, supporting, and organizing employees who are being sent abroad. International HRM encompasses various aspects of the foreign country, such as its people, their attitudes, government policies, and more. Merely being successful in the domestic market does not guarantee success when expanding to another country. Therefore, companies need to adopt effective HRM practices and procedures to operate efficiently in a foreign location.