SHR081-6 International and comparative Human resource management
SHR081-6 International and comparative Human resource management
Introduction
Human resource management is exercise of hiring, deploying, managing and recruiting and business’s subordinates. A firm’s HR section is typically accountable for creating effective strategies, putting the working style into result and supervising the policies of leading workers and relationship of company with staff members. Domestic resource management and international human resource both are different concepts. The report will elaborate the difference between the domestic human resource and international human resource management. International HRM defines as HRM functions, practices, issues and policies that outcome from the strategic activities of multinational enterprise. On the other hand, comparative human resource management is a systematic method of inspection that seeks to describe the patterns and dissimilarities met in cross-national human resource (Macke and Genari, 2019).
The report will evaluate the individual case study by using theoretical perspective and will research on the international HRD or HRM elaborating comparative HR practices. The main purpose of the report is analysing the issues raised by case study and comparing the institutional factors between UK and China. The cultural factors between UK and China that contributed to the failure Marks and Spencer in China will describe in the report.
Case Study analysis
International and comparative HRM practices
International human resource is a term that encompasses all the human resource practices included in managing an international workforce. Global HR specialists are responsible for the world-wide corporation. International HRM practices play essential role in the organisation as it helps in improving the operations and management within the workplace. Comparative HRM practices describe the changes in HR practices crossways countries in specific time (Sanders and De Cieri, 2021). It is important in establishing the links and connections between personnel policies, economic success, social cohesion and institutional systems of regulating businesses. Some practices are as follows:
Hire the Right people: Employees and workers are most important assets of the company. It is the first and effective practice as a Human resource is to hire people whose beliefs align with the firm (Villegas et. al. 2019). The organisation can set suitable persona for each role and screen applicants matching that persona.
Employee management: This practice helps the employees perform their best to accomplish the desired goals. Management of employee performance is very significant in the business. Feedbacks and suggestions are helpful for the employees to improve the work quality and they rectify their mistakes and perform in a better manner (Sun and Bunchapattanasakda, 2019).
Compensation and benefits: Bonus, compensation and incentives make employees more valuable and appreciated towards their work. Fair compensation build equality among employees as effective employee deserves excellent compensation (Kalyanamitra et. al. 2020). These incentives provide courage to the workers.
The strong national base of MNCs has been appealed to have implication for HRM for example different studies found MNCs to be more formalised and centralised. Contrast, European MNCs is appealed to be ‘polycentric’ thus: They tend to be less centralised and allow their associates a relatively high degree of autonomy as they place more weight on the local government. These are the HRM implications which are implemented by the countries for its origin in the world.
National Business Systems
A national business is that company which functions in a particular country and delivers products and services to its resident market. The nation-wide business system is as economic control and coordination instrument for companies and work systems where national institutional difference creates different variations of capitalism. A business system is a documented process that reflects on how to do something within the organisation to accomplish the desired objectives or goals (Relph and Milner, 2019). A company need to build such process so that it can give to the employees as checklists and even without training and development they can implement within workplace. There are some benefits of creating a business system that are explain as below:
Systems help in building a valuable asset: Creating the national business is very helpful in developing the company and builds its valuable and important assets. The biggest and effective asset of the business is its workforce as the employees work on the improvement of the business and achieves the desired goals. One and effective thing that makes the organisations attractive to investors is having a set or proper way of doing things and exactly what a company procedure provides (Maskari et. al. 2022). Creating the business system also enhances the customer base and guarantees the annual income.
Systems help in scale more quickly: Time is very precious and is the currency of productivity. Business systems supplement the team’s capabilities and release them from much of the physical day-to-day activity that needs energy and time. The team can focus on important strategies and methods to help the company in expanding and level up. The quickly growth of the company takes place with the proper national business systems (Amelung et. al. 2020). A scalable system is one that can handle continuous changes and transformation to workloads and user demands.
Systems promote consistency: The major objective of any business should be delivering the world-class experience consistently. Consistency means always behaving in the same way, accomplishes same level of success in something and has same attitude or behaviour towards people or things. The systems help in maintaining the same objective of all the employees because if the goal will be same then the workers will work according to the same objective (Jelnes et. al. 2019). McDonald’s can be the best example in terms of consistency as the individual buys burgers from any shops of McDonald’s in the world then it can be shown that size, taste and efficient quality. Systems are more powerful way to stay consistent with the service even if the company serving various consumers.
Systems lower labour costs: Automating the processes of business means that firm don’t need to think about all the organisation’s repetitive tasks each day. Nowadays, technology has also taken place within the organisation. The business systems provide employees with predictable work schedules that reduce the labour costs (García-García et. al. 2020). It also reduces the pay overages, reduces labour costs by optimising schedules, incentivises performance and reduce employee turnover and enhances productivity of the firm.
Some examples of business systems: Virtually anything can be systematised in the organisation but some examples of business systems are given below:
Emails: The business can create a schedule as a reference for writing, filing client emails and checking the correct email. Email is the way of sharing information to each other among employees.
Hiring: It is a systematise process of screening, searching and hiring a new team. Hiring experts within the organisation is very significant for the business as they help firm in developing the operations.
Scheduling: The right tools allow the company to present the availability for meetings and making it easier for the buyers to schedule their next meeting. In addition to this, Accounting, Meeting and travel are also the examples of business systems that make the organisation effective and efficient.
Theoretical specification of NBSs: A vital theoretical theme of institutional analysis is the determination of differences in the company and actions of the capital, financial systems, and number of labours in several national economies. The political and economic approaches of state performers and those who signify the interests of money and capital and organised employment are fixed within a social system of class relations, culture that illustrates their national abilities and institutional regulation (MacKinnon et. al. 2019). Business system shows a series of typically national features that shape the approaches and structure of different countries, including particular strategies to the management of human resources. The institutional features of national business systems influence on the companies in terms of their business approaches in both terms international and domestic.
It is possible to reflect numerous national features the comparative study of political, social and economic institutions that operates economic company within separate NBSs, in specific the management of human resources. The literature on business systems is broad and extensive in coverage and it is important to restrain the conversation and review of this literature to three crucial sources. They provide indirect variations in the description, conceptualisation and evaluation of business systems.
A number of factors identify as contributing to the country of company’s origin effect. The most significant theoretical strategies that influence the country’s origin are Institutionalist and Culturalist. These are two important approaches that analyse the differences between both the countries.
Institutional factors between UK and China
China is the world’s second largest economy and most popular country. It is said to be the witnesses, unignorable and will be a prominent player on the international stage over the coming years. China will remain a key international economic player and an essential trading partner for the UK. There are increasing and effective opportunities for UK businesses specifically in service sector (Burdon and Sorour, 2020). So, it is the significant advantages for the UK to maintain the productive economic relations with China.
Marks & Spencer and also labelled M&S is a British retailer with a head office in London. Currently, Marks and Spencer have about 760 openings in more than 30 countries in all over world such as Hong Kong. It is a typical chain stores in UK country. The supplies of the company are innovation, quality value and trust these three requirements are essential for the Mark & Spencer. Their brands comprise women’s and men’s wear, shoes and accessories (Alexander and Bardey, 2020). The food of Marks & Spencer is very good and its effective quality all over world. It involves a diversity of sweets, breads, ice creams, biscuits and spices from the UK.
The ecological mistakes of M&S entry into Chinese market were mostly revealed in absence of understanding of social culture according to data collection. It did not examine or fully understand the features of the buyer populations, economic level and culture in China before entering the Chinese market. In the process of M&S entry into China that it was influenced by the external market environment.
Mark&Spencer said that it will close around 60 stores in the UK and will shutter more than 50 global stores on the back of uninspiring sales development in its clothing and accessories units across the world. M&S faced so many challenges and issues as during entry into the market the markets of China usually have an advanced degree of official difficulty than developed markets. The primary reason of M&S was to enter into the Chinese markets as its essential worth is about offering high quality and reasonable products (Collins et. al. 2021). Along with-it M&S also faced post-entry issues in its operations and sales.
There are some reasons that Mark&Spencer failed in China that are explained as under:
Domestic brand shift: After a recent study of speeding buyer product sales by Bain & Co. investigate that even as China’s economic go-slow considers on ingesting, global companies are managing inferior than local ones (Teng, 2019). Global brand sales in 26 groups from shampoo to beer shrank 1.4% last year. The sales of home-grown makes are usually faster to adapt to shifting taste and arise 7.8%.
Lack of understanding: The second mistake of M&S was the clothing trend stores that outdoor of none too fashionable clothes and some bad store location. Due to low understanding between consumer and seller. Many of this fashion in clothes didn’t fit to the local body shapes that create bad reputation of the company and it also loses its brand name (Allelin, 2022). The headquarters of London group joins a list of western retailers that includes best buy Co. and Tesco Plc these companies tried to supply to China’s market but it failed. The global ambitions of M&S will limit to franchises and beneficial stores in Czech Republic, Ireland and Hong Kong.
Weak online presence: At present every company has a great presence in online platforms so that they can increase their sales in different countries. Active on internet is very important, 20% of China’s retail is already online and without a resident husband firms will have a difficult time. Local partners provide essential information about the market situations and how much competition is available in the global market (Firk et. al. 2021). Example Starbucks corp or cosmetics of South Korea’s Amorepacific Corp, it’s a difficult battle. It was major failing reason of the Mark&Spencer.
Institutional values and factors of United Kingdom: The structural or Institutionalist approach of National Business systems is implemented to describe impact nation of origin on MNCs performance rather than culture. The institutional features are shaped but also forced by national differences. Institutional factors refer to the internal and external environmental factors and with the help of these factors the behaviour of the company can be analysed (Anton and Nucu, 2022). There is difference between the institutional factors of both the countries. The institutional environment basically categorised by the expansion of the different policies, rules and regulations. It is important for the companies to receive the legitimacy and support in the country. UK has some institutional factors that impact the economy of the country.
Political institutions include the government policies and rules that have been quite in the favour of the country as it establishes effective rules that an organisation must have to follow in order to achieve higher goals. UK offers sensible subsidiary on export and import of information technology products in the IT sector. The government of the nation wants to motivates and improve the IT sector of the country as this industry is most rapidly and productive in the world (Grose, 2021). The rules and regulations that are proposed by the government are not only in favour of existing companies but also beneficial for the new organisations.
Economic institutions and economic situation of the country have been useful for the firms and in this part of the world the businesses performing and entering their respective businesses. Furthermore, the strong gross domestic product of the UK is the source of major attraction in the stability of the nation (Kirikkaleli et. al. 2021). The GDP growth rate of the UK is $2.678 trillion in 2013. This shows that the potential of the country in difference market is quite a favourable one.
Institutional factors of China: MNEs faces difficult institutional environment when running the business in the global markets. MNEs adopt some effective approaches to reduce the pressure of these factors. The significant institutions that identified in China are Governmental system, Chinese culture and non-governmental organisations. Institutional development has become the main focus of Chinese government in past years in order to maintain the economic development. The institutional transitions such as regulatory systems, political systems, market structures and legal framework help the firms of the China and foreign firms also to support institutional environment (Zhang et. al. 2021). This identifies two vital features of institutional evolution in China. First, rule of following the laws in China leftovers in an early stage of growth. Second, the institutions include the political systems, legal and regulatory systems remain weak so the casual organisations play opposite role in firms’ behaviour.
Cultural factors between United Kingdom and China
Culture includes beliefs, arts and institutions of a population that are passed down from generations to generation. The major examples of culture are customs, social standards, traditions, laws and architectural style. The indispensable ethos contains from traditional ideas and their attached values (Peña-García et. al. 2020). Culturalist approach states that business culture is often shaped by features of national culture in which MNC created such as Hofstede, Adler and Laurent. The cultural factors can be understood by the Hofstede cultural dimensions model.
Hofstede’s Six Dimensions of culture: This model shows the culture of the organisation and how that culture is influencing the firm. This framework is useful since it delivers vital data about changes between nations and how to manage or maintain such differences (Sent and Kroese, 2022). Any company can plan to enter into new international market with the help of this model. The explanation of dimensions is as follows:
Power distance index: Power distance is amount at which less influential members of firm and organisations such as family obtain and imagine that power is distributed unequally. The rate of power distance in the United Kingdom is 35% as the society of the country believes that inequalities among people should be minimised (Alapo, 2019). On the other hand, China covers 80% and believes that inequalities between individuals are acceptable.
Individualism vs. Collectivism: Individualism means a separate decisions and choices are expected and collectivism refers to that everybody knows their positions in the society which is strongminded socially (Farrukh et. al. 2019). In UK this element covers 89% that includes culture of persons that are taught to think by themselves. China covers 20% involves a highly collectivist culture where individual act in the benefits of the group and not essentially of themselves.
Uncertainty avoidance: Uncertainty avoidance deals with a community’s tolerance for vagueness and ambiguity. Comfortable in ambiguous situations are present in the UK and it covers 35%. On the other hand, China is comfortable with uncertainty and is flexible and commercial.
Masculinity vs. femininity: Competition for winning is important for both genders and there is disconnect between women and men in terms of emotional level (Stoller, 2020). UK is a highly success oriented and driven culture so it covers 66 percent. China also covers the same percentage as many Chinese sacrifices their families and priorities to work and is the success oriented.
Long term vs. short term: Nations with the long-term orientation tend to be modest and pragmatic and short term oriented countries are tending to place more emphasis on truth, consistency and principles. Community of the UK equally values its past in the situation of dealing with the future and present issues (Bukowski and Rudnicki, 2019). A culture of China with a pragmatic orientation has the capability to easily adopt the customs to change the circumstances.
Indulgence versus Restraint: The last and sixth dimension of the model is about the freedom and being able to have good things in life. This culture allows the individuals to fulfill their basic desires and preferences (Heydari et. al. 2019). UK includes 69% that describes that culture exhibits a willingness to realise their instincts and needs with regard to appreciating life and having fun. China involves 24% that analysis that culture doesn’t put prominence on vacation time and fulfilment of their needs.
Cultural development: The development of culture is very important thing that both countries should make possible to accomplish the desired goals. Cultural development is the process of allowing cultural activities including the arts, particularly of a culturally vibrant society and towards the realisation of a desired future. The term cultural development planning rather than cultural planning as culture occurs with or without local government’s interference. For the cultural development the countries can increase international connectedness. It refers to the capability to understand and function in an enhancing multicultural, global and interconnected environment.
The culture of globalisation contributes in exchanging the cultural values of several nations the merging of customs. The term harmonising the laws refers to the respective degrees, replacing and existing national laws with common rules. This culture is something that connects the people with each of different qualifications in terms of knowledge, religion, language and social behaviour. UK and China both countries can use the harmonisation of laws and regulations in order to develop the culture. The cultural factors of the United Kingdom and China are those that contributed to the failure Mark&Spencer in China.
Conclusion
It is concluded from the above report that managing human resource is very significant for the organisations of the country. HRM develops the sales and improve the operations and activities of the firm. The report analysed the case study of international and comparative HRM practices and the HRM implication of country origin. The National Business system is explained in detail in the report as its benefits, examples and theoretical specification also provided. Two major countries UK and China were taken for the differentiated in terms of institutional and cultural factors in this report. The two significant theoretical approaches are described as contributing to the country-of-origin effect. Marks & Spencer in China were failed due to some major challenges and issues in which both UK and China contributed. The description of cultural and institutional factors between UK and China are provided in the report.
Recommendations
International and comparative HRM practices are very important in expanding the business into different countries. It is recommended to the countries that they should develop more effective and better HRM practices to improve the economy’s performance in the nation. In MNEs the localisation and standardisation of Human resource management should be balance in proper manner. Balancing between these two factors will improve the international image and brand name; products will be universal, development in technological change and corporate cultures. Localisation factor includes institutional and cultural environment that shows the differences between two countries. The determinants of HRM practices that transfer within MNCs must be developed within the nations so that it will help in improving the internationalisation process, country of origin and subsidiary of UK and China. China need to improve its culture in an effective manner it should start the trend of equality in the society as well as in the companies among employees.
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