Human Resource Management Assignment sample
International and Comparative Human Resource Management Assignment sample
Introduction
Human resource management is the most important department within an organization whose portfolio is very comprehensive and evolves with the time and advanced technologies. Traditionally, the HR department recognized recruitment, selection, and controlling work only (Ozbilgin, 2020). However, in the present situation the work portfolio has become wide which includes other than induction, training, performance management, cultural diversity, and many more. The present report discusses one of the tasks of HR which possesses an important place within a company which is cultural diversity.
Multinational companies (MNC) expatriates their employees in different countries where they operate and, in that situation, they have to emphasize cultural diversity. The primary aim of this report is to highlight the challenges faced by the employees of multinational companies who expatriate from South Korea to India. It enables us to understand the challenges and potential solutions to overcome different culture issues. Moreover, the report explains the practices of MNCs about their recruitment, selection, training, and further HR functions in the Indian context.
Case study analysis
Cultural diversity is the characteristics of diverse and different cultures in contrast to monoculture (Reiche et. al. 2019). In other words, cultural diversity can refer to having various cultures respect each other’s differences and specifications. It also known as multiculturalism which can be diversified in the form of language, religion, race, sexual orientation, ethnicity, and many more. developed countries multinational organisations started to embrace such concepts in the early 2000s. However, developing nations are not able to embrace such advanced factors in their HR operations. Hence, the expatriate of such nations faces challenges to cope up with different cultures. In the following discussion, the case study will discuss along with highlights the practices of multinational companies HR operations.
Discusses the challenges faced by the South Korean expatriates in India
As per the given case study of Yeong-jin Lee where he is the operation manager in a multinational company in South Korea. He was offered a promotion but for that he has to accept an expatriate assignment as a senior operations manager in the company’s Indian office that opened in 2000 (Poór et. al. 2019). He accepted the three-year offer and moved to Delhi along with his family. His wife, Soo Kyong quit her teaching job in Seoul and his two children aged 10 and 13- year daughter and son respectively quit their schooling. Lee was surprised when they moved in Delhi due to different unanticipated challenges they faced in India by himself and his family. The following points explaining the challenges faced by the entire family:
Cultural and language Differences– Lee and his family face cultural and language differences which is the most difficult for them because it is not easy to learn a new language. People in India also do not know the South Korean language as they are only comfortable with English and Hindi. Hence, Lee has found difficulties to adjust in the office and interact with their colleagues. Moreover, he was not able to understand the work process and get information about work due to language barrier (Ayentimi et. al. 2018). On the other hand, his kids also found difficulty in their school as they were not able to understand the teacher’s instructions. They cannot make new friends because other students tease them. Hence, they often get frustrated. Further, his wife feels isolated because she was not able to connect with neighbours and make social relations with them. Hence, these are the first challenges faced by the entire family of Lee.
Different religious affinities- India is famous for its diversity and different religions. It was overwhelming for Lee and his family to understand different religions and they get conscious about their actions whether they hurt other religions’ feelings due to unawareness (Bonache and Festing, 2020). Therefore, they feel frustrated as they are not able to understand different rituals and find difficulty to adjust in a new environment.
Professional environment– Lee was the senior operation manager in India but still recognised as a mid-level manager and his peers expected to follow centralised directions from headquarters. The colleagues did not let him do his work accordingly which was the most challenging for Lee. He believes that such practices and expectations were unrealistic and unprofessional. Further, in India, employees prefer their social life over professional life which becomes a hurdle for them to fulfil their responsibility because their colleagues do not follow their instructions. Additionally, his role was to work with South Korean nationals only and he was not anticipating following Indian manager orders (Sukalova and Ceniga, 2020). Due to lack of cooperation and poor professional behaviour of peers ruin his experience in work in India.
Lack of knowledge about Indian culture– As earlier mentioned, that people in India mainly prefer their religion and social life over professional life. On the other hand, Lee thought that the work environment would be the same as South Korea, which disappointed him. His colleague left the office early to attend social and religious functions which disrupted his focus. Moreover, he realises that it was difficult to negotiate over the division of labour on integrated projects as efficiently as he did in his host country. Thus, some projects were not able to meet deadlines and execute expectedly. Therefore, he was frustrated with Indian culture and the behaviour of colleagues towards expectations of commitment (Dias et. al. 2020). In addition to this, at starting level everything looks agreeable but later the same practices were continued which was very problematic for Lee.
Social differences- Lee’s wife quit her teaching job and agreed to live at home and spend her time with their children and devote to his family. However, it was very challenging for her to depend financially on her husband. According to the philosophy of Confucian that difference between the roles and responsibilities of husband and wife where the husband has to earn money and support the family in a financial manner. Wife responsibility is to take care of her husband and children’s education. She follows this philosophy and pretends to be satisfied with his current status. However, she misses her family and social circles and feels isolated in India (Sposato and Rumens, 2021). She also faces food challenges and has concerns about the social life of her children, their education and future career due to differences in the system of education in India.
The above challenges faced by Lee and his family due to cultural differences have made a significant impact on his personal and professional life. In such a situation, he was not able to meet their senior manager’s expectations because he struggles to cope up with the new environment and cannot be productive. At the same time, personal problems also grab his attention and he will not be able to manage both areas of his life simultaneously.
However, it is a fact that a satisfied and well-engaged employee is more productive and high-performer than an unsatisfied employee. Lee faced cultural issues in his professional life which divided his attention from his work and he was not able to meet deadlines and execute projects (Bhatti et. al. 2018). Hence, it causes stress which ruins his performance along with suffering from several health issues. Therefore, it can be said that cultural differences adversely impact an employee’s productivity in both positive and negative manner.
Critically review multinational company’s practices about HRM in the Indian context
Human resource management policies and practices become advent and crucial due to advancement in technologies and increased mechanism practices. Moreover, managing HR in the international context is more difficult than the domestic environment and host country because of the differences between the culture in headquarters and subsidiaries nations. In the context of globalisation, it has been considered that HRM builds significant constraints when multinational companies want to implement global strategies due to cultural and institutional differences of every country in which MNC wants to operate (Horwitz and Mellahi, 2018). It is well-known that there are multiple IT companies in the US and Europe whose subsidiaries are located in the cities of India.
Therefore, the HR department has to arrange many resources and conduct several tasks to establish their subsidiary in India or in any nation which has no need to be done in the host country. For example, international rules and regulations, taxations, international relocation and socialisation, relations with the government, language translation services, and many more. Additionally, it also needs a wider perspective with international HR managers to consider different variables in their decision-making process. Like, dynamics of labour market, employment law, workforce composition according to home country, third country, and host country nationals. However, in the present situation, the dependency on expatriate employees to fill positions in subsidiaries is reduced. In fact, HR focuses on recruiting employees from parents or third countries.
With the increasing size of the company, HR practices and workload also arise. The common practices of HR are planning, recruitment, selection of skilled and competent workforce, investing in their career planning, performance assessment system, design employee stock options plan (Datta et. al. 2021). Moreover, create an open and autonomous work environment, develop strategies for compensation and benefits, schemes for retention, ensure rightsizing of staff, delayering and decentralised roles and responsibilities, and so on. HRM responsible for improving employee’s motivation and morale. These work practices become crucial and more precise at the international level because these common practices transfer from MNCs headquarters to its subsidiaries located in various countries.
Handling HR practices in India is very complex because there are unique and multiple socio-cultural, political, legal, and economic environments. Since, HR plays a vital role in the development and enhancement of the company, hence, in India, the role becomes complex and demands extensive research. Moreover, there is the need to consider factors which change according to the industry. For instance, Indian MNC in the IT sector tend to generate positive results while they operate in the international market as compared to the manufacturing industry (Gahlawat and Kundu, 2018). Foreign MNC first strengthen their domestic market and then expand globally. While, Indian MNCs typically grow first in developed markets by using their own skills and domain expertise. Moreover, it is a fact that Indians are pioneered in global offshoring services delivery by leveraging a combination of onshore and offshore or near-shore local strategies. Therefore, it can be said that IT multinational companies can leverage skilled experts’ services by establishing their business units in the Indian market.
As earlier mentioned, about HRM common practices like recruitment, selections, and so on. The following are providing recruitment models which are mainly used to recruit expatriates and employees to handle MNCs offshore operations.
Recruitment approaches of MNCs in Indian market
There are four approaches to international recruitment which discusses below:
Ethnocentric– It means recruiting people from the parent country to fill the position (Sakib, 2022). Other than that, relocate one of the existing employees who is the permanent resident of parent nations or recruit people from the parent country who are willing to live in the host country.
Polycentric– In this approach, recruit people from the host country or from the local market. When a company starts a new subsidiary in foreign country and wants skilled employees from the local area, then they often adopt such an approach.
Geocentric– It is indifferent from above both approaches as it focuses on hiring the best candidate irrespective of their nations. In this approach companies can hire employees remotely and can relocate their employees who can fulfil their expectations through their performance.
Regio centric– It emphasises recruiting people within the same region or group of countries. For example, transfer employees within the Gulf region and hire someone from the UAE or Oman.
In the context of India, companies should use polycentric and geocentric approaches. As it is very important that the employee have knowledge about Indian culture and work practices because they are diverse and different from other cultures (Patel et. al. 2018). It can be understood through the example above which discusses a case study where Lee did not have knowledge about Indian culture and work environment and thus, he has to face multiple challenges as well as his family also suffer. However, the case study portrays the situation of 2000 and now the HR practices have been changed and Indian companies become more mature and adopt global standards.
South Korean companies’ HR practices were very orthodox and focused on internal-labour-market orientation, seniority-based-system. They prefer tenure employees over skilled and competent employees. Thus, their promotion and salary discretion rules also favoured tenure employees. Likewise, Indian culture as they also follow the same practices within their organisation. However, after the 1991 liberalisation policy, Indian work culture significantly transformed and became the attraction centre for international MNCs (Parimoo, 2017). Hence, most of the foreign companies started their business in the Indian market and generated huge profits.
They mostly use a polycentric and geocentric approach to recruit employees for Indian subsidiaries. It can be understood with the example of Motor Co. HRM practices. The company is one of the three largest business groups in South Korea who deal in a wide range of auto parts, industrial steel manufacturing, and offer auto financial services. The company’s operations spread in several companies like India, China, Europe, and USA (Budhwar et. al. 2019). The company uses traditional HR rules where they recruit local workers. However, due to market and technology advancement, strategic concern has emerged and thus, the company has to introduce HR global strategies which are aligned with international HR standards. Under these strategies, they used both ethnocentric and polycentric approaches in their recruitment process.
The HR of Motor Co. implement their strategy in their Indian subsidiary where they try to execute some global and unified standard (Malik et. al. 2021). However, they apply these standards in all their subsidiaries but they face resistance from Indian outlets. As the manager of an Indian subsidiary is a polycentric hire and wants to implement forced distribution practices in performance assessment strategy. Under this system, the manager has to give a distributed rating to their employee into standard performance distribution guidelines which oppose centralised policy (Stavrou et. al. 2021). Hence, conflict arises between the headquarter manager and the Indian manager. This can be considered a disadvantage of the polycentric approach.
Thus, the global five-level grade system could not be implemented in Indian subsidiaries. From this event, it can be concluded that Indian employees have concerns about their job designation which is associated with their specific grade. Thus, most of the MNC who operate in India have followed a hierarchical grade structure (Edwards et. al. 2019). On the other hand, the company did not face such type of conflicts in other countries because they all follow centralised instructions and they are not obsessed with their grade and job title like Indian employees.
Hence, such kinds of culture differences, working style, and conflicts affect the work practices which align with international standards. In order to implement parent company rules and regulations in Indian subsidiaries, it is important for MNCs to take collaborative approaches and use the best recruitment approaches.
Selection process of MNC in Indian market context
Multinational companies who want to establish their business in India, should use a polycentric and geocentric approach which is also mentioned in the above discussion. However, Indian culture is dynamic and people prefer their social and religious life over professional life. Thus, expatriates should be selected by considering these factors (Chandwani and Makhecha, 2019). Hence, MNCs should determine some criteria of selection. For example, whether the employee is willing to move to India, if they have knowledge about Indian culture and language, if they are comfortable to live in India and implement global standards, and many more.
From this, MNCs should prepare the candidate to be adjustable and adaptive in different cultures along with ensuring high productivity and consistency in their work. As it is a well-known fact that Indian culture is complex and there are several religions which somehow reflect in their professional life as well. Additionally, Indian culture varies from state to state and foreign employees have to adjust in all kinds of culture and work environments which is the most challenging task (Malik et. al. 2019). As it could not happen while maintaining consistency in productivity and performance. Therefore, the selection process of MNCs for Indian subsidiaries should be precise and transparent.
Training process of MNC in the context of Indian market
It becomes compulsory for every expatriate who deputes in India due to the complex work and religious culture. The importance of training can be understood from the example of Lee who moved to Delhi and faced multiple challenges both professionally and personally. If he gets appropriate training about the work practice, linguistic differences, cultural differences, and many other elements, then maybe he appropriately anticipates his future career in India. Further, he would be preparing his family for such cultural nuances and refuse to take the offer (Qi et. al. 2021). Moreover, the importance of training can be understood from the example of Motor Co, that they should provide training to local employees and understand them about performance measurement and grade system before implementing global HR standards.
However, with the advancement of technology and changing international market trends, the IT industries in India evolve their practices and transform according to global standards. Hence, IT MNCs do not face such a problem to expatriate their employees in Indian subsidiaries. However, manufacturing, retail, farming, and other small-scale industries still follow the same traditional HR standards (John and Chattopadhyay, 2020). Thus, it requires proper training for international expatriates. However, there are only IT MNCs in India and other international manufacturing and retail companies using franchise models to operate in the Indian market.
In order to set up different kinds of business in India, it is important for MNCs to define structured training for their expatriate employees (Benoy and Morley, 2020). For example, pre-expatriate, during expatriation / international assignment, and repatriation stage. In the first stage, the company should organise workshops where Indian employees provide information about work culture and more. In the second stage, training and induction should be provided after joining the company by an Indian employee or manager. However, it can be effective when employees join and experience the environment by themselves as it is a fact that on-job training is more effective than off-job training. In the third stage, training has to be provided when the tenure of the expatriate has completed, like the final work submission process, confidentiality, and further things. Thus, the structural training would be beneficial to the foreign employee.
Adjustment and completion of expatriate in the Indian market
The point emphasises that expatriate employees should adjust between new work environments and handle personal domain effectively (Mishra et. al. 2018). It is considered a perceived level of comfort with different cultures. However, the selection and training process is sufficient for expatriate employees. There are several elements like providing accommodation facility, commute facility, currency exchange service, and further services which help to adjust in a new environment. These errands also affect the productivity and performance of the employee. In the case of India, it becomes essential because there is competition to acquire such resources and people do not tend to help foreigners rather than Indian workers (James and Baruti, 2021). Additionally, cultural and linguistic differences create barriers for most of the house owners to rent their house. Hence, it is important to provide such facilities to expatriate employees which enable them to adjust to a new country and environment.
Conclusion
The present report highlights the challenges faced by expatriate employees due to cultural differences. As per the case study of Lee, who expatriated from South Korea to India by accepting promotion. He moved to Delhi along with his family for a three-year project. However, they face several challenges due to cultural and linguistic differences and he was not expecting such cultural differences which makes him disappointed. It adversely affects his productivity and he has to face difficulty for his personal ends. The report concluded that MNCs who try to establish their subsidiaries in India, have to use advanced HR practices due to the complex work culture of this country. The report highlights the recruitment approaches, selection, and training process as well as adjustment and completion process while transferring their employees in India. As per the above discussion the following are providing some recommendations.
Recommendations
- Human Resource managers are not only responsible for recruitment, selection, and controlling jobs but also, they should address other important areas of employees. For example, induction, training, learning, compensation or benefits, cultural diversity, motivation, and many more. In these tasks, cultural diversity holds a vital place within the company as it navigates employee productivity and performance (Chung, 2022). As per the given case study, Lee manager should provide adequate training which helps him to adjust in a new country and new work environment. Likewise, other MNCs also should provide an overview about different work cultures to their expatriate employees before transferring them to foreign country.
- Diversity is one of the most crucial factors in MNCs because they have to recruit and transfer people from several countries. Hence, they should focus on their diversification policies. It may include race, sex, gender, religion, language, and many more (ICMR, 2018). Diversification within the company provides immense growth opportunities because they can leverage many expert skills from different cultures. In the Indian context, which is famous for its diversified culture, MNCs should leverage them by recruiting employees from a polycentric and geocentric approach.
In order to generate sustainable success and competitive advantages in both parent country and host country, MNCs should understand the market variables that make difference between HRM and international HRM practices (Cooke et. al. 2020). Moreover, international companies should enhance their HR rules and regulations by aligning them with international standards. At the same time, Indian companies should improve their HR practices and operate in foreign markets by using their young population skills and competencies. It also makes it easy for international expatriates to work in Indian companies if they enhance their practices according to international standards (Tiwari, 2020). At last, it can recommend that MNCs should provide equal opportunities to all their employees without discriminating against them as per their nationality.
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