Human Resource Management

International Dimension of Human Resource Management Heightened Interest in International HRM One significant reason accounting for the raised profile of international HRM for many personnel professionals in recent years is the increasing incidence of international joint ventures;   In recent years HRM has undoubtedly risen up the strategic agenda for international firms as it is recognised that firms with the most productive workforces possess an international competitive advantage over rivals; Expenditures on personnel typically represents a very large proportion of a multi-national’s total spending and it is increasingly recognised that HR matters thus require a more strategic perspective. Sustained competitive advantage is best derived from developing the capabilities of the organisation’s assets, notably its people, rather than relying on mergers and acquisitions for growth. Mobilising the organisation’s knowledge and disseminating its organisational learning are increasingly recognised as vital processes in attaining and maintaining international competitiveness.

Problems and Issues in Conducting International Business Information on foreign countries needed by the firm may be difficult (perhaps impossible) to obtain in advance;   Deals may well have to be transacted in foreign languages and under foreign laws, customs and regulations; Numerous cultural differences will have to be taken into account even if the organisation is ‘merely’ trading with foreign companies; Control and communication systems are normally more complex for foreign than for domestic operations; Risk levels are likely to be higher; International managers require a broader range of management skills than do managers who are only concerned with domestic operations; Large amounts of work crucial to the well being or even existence of the enterprise might have to be left to intermediaries, consultants and advisers; It is more difficult to observe and monitor trends and activities, especially the actions of competitors, in foreign countries.

First three priorities of Human Resource Department

Forces for Convergence in HRM Policy and Practice -1 In the case of the European Union, member states are committed to moving ‘towards ever closer union’; EU Social Chapter Protocol; A global market place that is becoming increasing liberalised; Common social and political features of developed economies; Common, contemporary problems; Quality competition; Universal shift from manufacturing to services; Dominance of global / trans-national / multi-national companies; Common technology;

Forces for Convergence in HRM Policy and Practice -2 Common people management methods and the “logic” of scientific management; The financial control model of strategic control;   Benchmarked productivity and quality targets in multi-nationals; International dissemination of management theory; “Excellence” - one best way - studies; Geographical mobility of managers; Centralised management training and development: Transfer into Europe of Japanese methods: HRM as a management ‘model’ or ideal: ‘good practice’ policies Internationalism of Trade Unions;

Discussion Point(s): Review the above factors which point to international convergence in people management policy and practice:   What do you feel might be the most important factors likely to result in the convergence of people management policy? What factors are likely to impact upon the realisation of HRM policy in practice?

Forces for Divergence in HRM Policy and Practice -1 Significant differences in labour markets remain: different patterns of labour market flexibility such as the ratio of full-time to part-time posts and in skill demarcations: Spain and France - very rigid labour markets, Italy - labour markets are growing more flexible, Holland and the UK - labour markets are fully flexible.   Insulated national, even regional, labour markets: some clearly identifiable flows are, however, identifiable such as: From Ireland to the UK and Germany From France to Germany From Italy to Germany From France to Netherlands From Germany to Luxembourg From Germany to Switzerland From Canada to the USA From Mexico to the USA From Korea to Japan

Forces for Divergence in HRM Policy and Practice -2 Different historical and political traditions;   Different interpretations of international laws; Social structures, social identity and solidarity; Distribution of power and status in society; Resurgence of interest in national sovereignty and subsidiarity within the EU; Growth of regional cultures; Vast differences in education systems; Transfer of standard management methods across the multi-national corporation; Privatisation and de-regulation of industries; The HRM model: placing an emphasis on internal labour markets rather than standardised, national markets; De-centralisation of HRM policy and practice; Significance of Small Medium Enterprises in the economy

Discussion Point(s): What do you feel might be the most important factors supporting continuing differences between the people management policy and practice of different nations?

Comparative Role of Personnel Functions Areas of difference in typical national provision of personnel management services:   Policy and Planning Rules and Procedures Employment Law Level and Extent of Collective Bargaining Range of PM Activities PM and Line Managers PM: Balancing Concern for Employees and the Employer Outsourcing PM