BMG935 CRN 13605- International HRM Assignment Sample 2023
Introduction
The term International HRM is usually used for multinational business organizations that manage their human resources activities at an international level. It is a process of allocating and utilizing human resources in a global business to achieve the objectives of a business organization. There are some challenges of HRM such as recruitment, selection, imbalance between employees, management, performance appraisal, trade union dealing and maintaining emotional stability of employees.
The aim of this study is to provide an overview and history of the multinational manufacturing organization TATA Group. Engagement with past applicants, developing recruitment software and encouragements of employees’ referrals helps to address numerous HRM difficulties. International HRM can manage organizational performance by managerial business policies.
Main Body
Review of the relevant literature
Impacts and importance of International HRM
Business organizations of all sizes aim to expand their business globally to expand their market and increase their sales which eventually enhances the profitability rates of an organization. The impact of globalization has pushed companies to extend and expand their business significantly. The term globalization is commonly heard in the modern business world which means global expansion of a business (Caligiuri et al. 2020).
Besides, there are several underlying reasons due to which business organizations have been adopting globalization of their business. For instance, technological advancement, trade specialization, and cost efficiency while going global. However, the majority of organizations that opt for acquiring global markets miserably fail to understand the importance of International HRM (IHRM). Companies that hold little or no importance to their international human resource management often suffer from business setbacks and a chain of other consequences.
TATA group is facing some challenges such as performance appraisal, imbalance between management, employees and trade union dealing. These challenges resist a basic growth of TATA Group and net loss has been increased.
TATA Group is mostly a family owned business and it becoming a best run and professionally business by manage numerous difficulties. Managing a global business helps in reducing overall business challenges and it can provide benefits managers to eliminate several challenges of TATA Group.
Evaluating the leadership strategy is managing several operational challenges and can eliminate numerous business challenges of TATA Group. International human resource management is beneficial to manage some basic challenges and most of the business organizations are using these accurate techniques to reducing numerous business challenges.
Emotional stability helps in reduction of business challenges but sometimes imbalanced performance management can enhance numerous business challenges. Apart from this, TATA Group aims to expand its overall business quality to enhancing their market size.
A profitability rate of the organization is increased by the specific decision. Basic challenges does not fulfill business demands rate that it can only reduce business performance. Managing a global business strategy helps to eliminate organizational challenges and it can develop accurate relationship between management and individual employees.
Human resources are considered to be the most important assets of a business organization and so it is important for companies to manage their human resources effectively to achieve their business objectives. International HRM in a global organization plays a vital role in the strategic level of a multinational company. It assists a company to develop various strategies effectively that can be beneficial for their international business (Cooke et al. 2019).
The executive manager of the International HRM of a company plays a vital role in the decision-making processes of their company. Complete comprehension of the overall global system of a business organization is essential to enhance the productivity of employees working in it. There are various factors that define the importance of International HRM such as:
Global management of Human Resources: Implementation of international HRM assists an organization to employ and manage global human resource policies and procedures in order to meet the global requirements of the company. This in turn assists a business organization to meet the wider objectives of the company (Farndale et al. 2017). It is important for the human resource management of an international business to be operated in a similar way as domestically operated HRM. This can be achieved by promoting a more integrated working system.
Global Staffing: It is significant for an international business organization to appoint specific individuals to fulfill specific jobs at the proper time and place for achieving the objectives of a business. In order to achieve this successfully, business organizations need to plan their global human resources effectively. It can be achieved by adopting effective recruitment and selection procedures for hitting and appointing required employees.
There are various types of employees that a global organization needs such as HCN (Host Country National), Expatriate, and Third Country Nationals. Expatriates are employees who work in an international organization and who do not belong to the country in which they have been working. However, expatriates belong to the country in which the headquarter of an organization originates (Suder et al. 2019).
HCN is the employees working in an international organization who originally belong to the same location. The third country Nationals are the one who work in an international organization and who does not belong to the origin country of the organization.
Stages of International involvement of business: A business organization adopting internationalization of business has to pass through various stages such as domestic operations, export operations, subsidiaries, multinational operations, and transactional operations. It is important for the International HRM to be more adapted to the diverse cultural, legal, political and economical environment while passing from lower to higher stages of internationalization of business (Rodriguez et al. 2017).
There are various stages through which a global business evolves such as licensing, exporting, franchising, global corporation, and multinational corporation. These stages enhance the overall international HRM for multinational organizations.
Global Development of Human Resource:International HRM ensures global development of human resource management. Various training and development programmes are incorporated in International HRM to ensure the global development of human resources.
For instance, Expatriate development is a kind of training and development programme in which the process is initiated immediately after the selection of required employees.
Global Health and Safety: International HRM in a multinational organization implements certain health and safety of their employees in order to make them more productive and beneficial. Providing health and safety assurance to employees makes them more productive and beneficial for a business organization (Przytułaet al. 2020).
US-based global operations are considered to be much safer and healthier for employees than any other host country as they implement programmes and policies for their employees’ welfare.
Global Benefits and compensations: Organizations are forced to expand their business in other parts of the world due to the high rates and wages of domestic businesses. Proper management of International HRM assists business organizations to maintain their global competition effectively (Zardashtet al. 2020).
The level of global compensation is usually low; however when an organization develops a global compensation package, it needs to consider various factors such as changing taxes and variations in law and others.
Future Trends in International HRM
There are several changes that have been transforming the Internal HRM processes. Various future trends of International HRM are as discussed below:
Promoting Inclusion and Diversity: The culture of the workplace plays a vital role in providing a positive working experience to its employees. Employees working in an international organization belong to diverse races, religions, gender, culture, and sexual orientation. This makes the employees of a global organization feel that they belong to a certain community. Human resource professionals of a business organization need to promote the inclusion and affiliation of employees in a foreign country (Likhitkar and Verma, 2017).
This can help the foreign employees to feel more associated with the company and also boost their confidence level which assists them to express their idea with equity. Research on International HRM indicates that a cohesive work culture improves the performance of employees by 56% and reduces the overall turnover cost by 50%.
The trend of remote working: Uncertainties caused due to COVID-19 have forced business organizations in almost every sector to shut their operations for several months. The trend of remote working or working from home has provided a new direction to the International HRM around the world. The dramatic shift of traditional business into remote working put great emphasis on flexible working arrangements.
According to surveys conducted on HR managers in the UK, it has been revealed by four out of five HR managers that integration of remote working has decreased absenteeism of employees (Bello-Pintado and Garcés-Galdeano, 2019). Modern companies have significantly been adopting this new and flexible way of working to ensure the smooth running of their business at times of uncertainty.
Cultivating critical thinking, digit skill, and soft skills: Modern business organizations seek various skills in their employees at the time of hiring employees for their companies. For instance, critical thinking skills, digit skills, and soft skills are also looked for along with educational qualifications and job skills while selecting an employee.
Modern HR personnel seeks digit skills in their employees such as data analytics and digital literacy. Assessing critical thinking such as strategic thinking for their organizations is another major skill recruiters seek in their employees at the time of hiring personnel (Haak-Saheem, 2020). Besides, soft skills such as emotional intelligence and creativity are considered to be the major and most significant skills required by modern recruiters.
Integration of Artificial Intelligence (AI) and Machine Learning (ML): Advancement of technologies has significantly affected the business sector positively. Implementation of AI and ML (Artificial Intelligence and Machine Learning) has improved the way of operating business. AI-based algorithms such as tracking software for applicants, combined with increased cloud computing can help HR personnel in recruiting candidates efficiently and streamline the workflow of their companies.
Implementation of AI in international business can assist HR to manage integration and onboarding along with the training and development of their employees (Zopiatiset al. 2021). Besides, integrating Robotic process automation using machine learning enables HR professionals of a company to establish their virtual assistance. It can be stated in this context that the integration of AI and ML can help international HRM to improve their processes of conducting business.
Fluid Task Management with Gig Economy: It is important for HR professionals to understand that younger employees of an organization prefer work-life balance with flexible schedules and telecommunication. Younger employees prefer to work independently and this gig economy is experiencing a huge spike in the modern business world. This is because people are increasingly looking to work on their terms and conditions.
Modern employees are continuously leaving behind a 9-5 working schedule as their per day job. Besides, professionals like freelancers and consultants devote 100% of their time working for themselves ( Ererdiet al. 2020). Therefore, it is important for HR professionals and team leaders to look for new ways for keeping their workforce efficient and agile with changing trends in the business world.
The workforce of an organization is the major asset of a company and so it is significant for the HRM of an organization to search for the best talents and create a working culture to make the employees loyal to their organization.
Overview and history of the MNC
TATA Group is a multinational conglomerate manufacturing organization that deals in various sectors such as automotive, information technology, steel products, consumer and retail, and various other fields. The company founded by Jamsetji Tata in 1868 is a global enterprise with its headquarter in India. TATA Group currently comprises 30 companies across ten different verticals that make this organization of the greatest companies worldwide.
The value and purposes of this company are integrity, responsibility, excellence, pioneering, and Unity (Tata.com, 2021). TATA Group is currently led by Ratan N. Tata who believes that business places great demand on personnel. It requires a business professional to self-impose a framework consisting of ethics, values, fairness, and objectivity. Tata Group is well known for being a value-driven organization that has helped the company in its consistent growth and development of its business.
The five core values of this company underpin the way they conduct their business. For instance, integrity suggests that the company is fair, honest, and ethical with its conduct. It states that everything that this company does stands the test of public scrutiny.
Responsibility is another core business value of this company which reflects upon the fact that the organization integrates social and environmental principles in its business which ensures that what comes from people goes back to them (Tata.com, 2021). Excellence is the value that suggests that the company is passionate about achieving and delivering the highest standard of quality to its customers.
Pioneering is the core value of the company that suggests that the company is bold and agile as well as courageous about taking challenges. Besides, the core value of unity suggests that this company believes in investing in their partners and people and enables continuous learning and development opportunities for their people.
This vision of Jamsetji Tata propelled India into the ranks of industrialized nations worldwide. Tata Group operates its business in more than 100 countries across six continents (Tata.com, 2021). The mission statement of this company states that the aim of this company is to improve the quality of life of the communities that they serve globally through long-term value creation based on Leadership with Trust.
Tata Sons are the promoter and principal holding company that operates all the operations of Tata companies worldwide. Around 66% of the equity share capital of this company has been held by philanthropic trusts.
Most of these trusts support education, art and culture, livelihood generation, and the health of communities worldwide (Tata.com, 2021). The company earned a total revenue of 103 billion US dollars in the crucial year of 2020-2021. Tata Group collectively employs more than 800000 people around the world.
Outline of the International HRM issues
Operation and management of human resources across cultural and geographical boundaries can often be difficult for business organizations. Giant multinational organizations with a huge workforce like Tata Groups find it difficult to manage their human resources effectively across various countries. Earlier, communicating effectively with the stakeholders and employees across the world was a huge problem for the majority of organizations worldwide.
However, with technological advancement and widespread technical support, this issue has been taken under control (Farndale et al. 2020). Technical support assists an organization to obtain access to a new and varied market. However, there are certain issues existing in International HRM which need to be mitigated to enhance the business processes and sustainability of an organization.
Various business aspects such as legal, economic, cultural barriers along with different labour markets and management styles are major issues existing in international HRM. Besides, various compensation practices, labour laws, and training and development make it difficult for global human resource managers to manage their global workforce.
Some of the major objectives of an International HRM have been identified as generating awareness on cross-cultural workforce among managers and employees globally and hiring employees across boundaries (Cooke, 2018). Moreover, establishing local appeal without compromising with global identity is another major goal of an international HRM. Besides, training upon cultures and sensitivities of the origin or host country is also a major objective of IHRM.
However, there are some specific challenges that have been faced by this MNC companies in the international procedure. These challengers create several hurdles for the organizational development and improvement of their business processes.
There ae some challenges such as there are high percentage of organizations that is why the international market has high competitive scenario. There are several strategies have been used by those organization and collecting all those data and information is pretty much tough to analyze. Other than this, there are some organizations that are having high financial back up for problematic scenario.
Analysis of the International HRM issues
Major challenges existing in global HRM have been affecting the management of the workforce of an organization. Human Resource managers and professionals often face difficulties in managing their expatriates and domestic human resources due to differences in cultures between them. Effective management of a multicultural workforce is difficult for HRM employees belonging to different countries who have different beliefs and working styles that eventually affect the workplace culture (Abdul-Kahar and Sulaiman, 2017).
This creates conflicts among the employees belonging to different cultures which in turn affects the overall operations of a business organization. It is significant for human resource executives to possess adequate knowledge in order to identify the imitation and extent to which the policies and procedures of HR can be standardized in a global organization.
It can be difficult for HR executives to understand and implement global HRM and staffing policies in an organization. Staffing policy involves the procedure of selection and hiring of skilled employees for a specific post in an organization based on their competencies and skills. A human resource manager needs to have a greater understanding of international business policies such as ethnocentric, polycentric as well as geocentric approaches to hiring employees (Van Berkel et al. 2017).
The ethnocentric approach suggests that the key position in a company needs to be filled with employees of the host country only known as expatriates. Employing expatriates for crucial roles in an organization has both pros and cons. For instance, it prevails the communication, culture, and interests of the parent company.
However, it creates difficulties in understanding the market condition and trends of the host country. Besides, higher payment policies for expatriates compared to local professionals can be considered to be a major disadvantage for business organizations.
Multinational companies like Tata Group provide opportunities to local employees to acquire significant posts in their management system based on their job skills and creative thinking skills. Training and development of employees is another most difficult responsibility which needs to be ensured by International HRM.
A cross-cultural team requires standard training of employees of all religions which can be difficult for HR executives to amend. Moreover, creating a balance between standardization and localization of practices involved in human resources and international labour relations is also difficult for International HRM (Thehrdirector.com, 2021).
Theoretical analysis
International HRM theory
International HRM theory is all about providing the overview of the international market. This provides the possible challenges and issues that help the organization to maintain the business procedure as well as the development of their business. In case of international market there are high percentage of having competitors that are creating issues and risk factor in case of developing their business procedures.
Other thanthis, this theory provides the over view of the market by which management team of an organization are able to develop proper strategy and planning procedures that will help them to expand their business in the international market.
Therefore, the organization can use this strategy to analyze their existing strategy and find theirissues and other risk factors those impacts on the development of the organization. This theory provides a competitive advantages to the organization business process that help them to have competitive advantage and step ahead from their competitors.
International human resource management theory helps to eliminates numerous business challenges by the job and cultural fitment. Performance management and alignment helps to improves leadership skills of individual managers and theses specific factors are manage by the International Human Resource Management theory.
HRM theory helps to provide a basic understanding or knowledge to expanding current market situation. Organizational effectiveness and effective measurements are fulfilling by the International HRM theory. Social, economical and technological conditions are managed by the specific theory and that can eliminate several difficulties of TATA Group.
HRM theory helps to understand current business situation and that helps to maintaining accurate relationship with the management and employees. Human resource management theory helps to eliminates overall difficulties of a business and most of the business organizations are eliminates several business difficulties by the specific theory.
Conclusion
The study concludes various aspects related to International HRM that are effective for a multinational organization. It analyzes the impacts and importance of international HRM in an organization which reveals several factors which make this phenomenon an essential requirement of multinational corporations.
This study further concludes future trends of IHRM which reveals that integration of artificial intelligence and machine learning is one of the most important trends of this field which is predicted to transform the way international HRM has been operating to date.
The study further highlights the history and overview of Tata Group, a multinational giant corporation operating worldwide. It concludes that training and development and staffing and selection of employees for a multinational corporation are major challenges involved in the proper management of International HRM.
Human resource management theory helps to expanding overall business organization and that makes perfect plans for increasing basic performance. This specific theory is a general procedure to expand business opportunity by using business strategies and tactics. HRM theory is enhancing appraisal, selection, development and reward for organization to improve organizational development.
Human resource management theory helps to expands organizational performance and managing numerous challenges. HRM theory helps to make proper balance between employees and management to eliminate numerous difficulties.
HRM theory helps to provides basic understanding of business framework that can easily manage future challenges. Human resource management theory is a dynamic process that reduces numerous business challenges of TATA Groups.
Recommendations
Various recommendations can be provided to multinational giants like Tata Group to mitigate the issues prevailing in international HRM. For instance, it can be suggested to the organizations that the international human resource strategies formulated by them need to understand and implement practices and policies that satisfy the objectives of the company at local, national, and global levels.
Besides, it can be recommended to international organizations check their employees’ descriptions annually in order to cope up with the cultural, technological, and environmental changes (Bretos et al. 2018).
It is also important for business organizations operating their business internationally to structure a talent management system in their mobility pyramid to keep regular checks on their talents and their performances. Moreover, identifying the strengths and skill gaps of employees can help multinational corporations to bridge the gaps between their strategic objectives and employees’ outputs.
It is also significant for business organizations to understand labour laws and legislations of foreign countries before expanding their business in those countries (Bleijenberghet al. 2021). Improper alignment of rules and policies as stated by the government of a particular country can lead a company to various consequences.
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