Organizations operating in a global environment needs effective human resource management. The ability of human resource management to operate across geographical and cultural boundaries will have to experience some issues. International human resource management is described as the activities of human resource in multinational firms in foreign countries. Technology has made it easier for corporate organizations to share information globally. In light of this, the organizations will have the ability to learn different cultures especially the aspects that are related and can affect business operations (Tosi & Pilati, 2011). To understand this, it will be important to evaluate various approaches such as ethnocentric approach, polycentric approach, regiocentric approach, and geocentric approach to international human resource management.
The approach describes the cultural values and business activities of the home nation prevail in the organizations compared to the host country. Thus, citizens of the home country will occupy the main positions of the host country. This approach is effective only to organizations that are pursuing the international strategy (Brewster et al., 2016). The HR of these organizations will apply this strategy to ensure that employees from the home country make important decisions. The approach is applied when;
- The organization believes that there is a lack of qualified employees in a host country to occupy top positions such as chief executive officers, a board of directors and managers.
- The organization determines the approach as an effective way of maintaining a united corporate culture
- The organization wants to pass knowledge of importance to the foreign business
The disadvantage of the approach
- It minimizes the operations of the host country citizens. These might result in poor performance, increased revenue and resentment
- This approach can also result in cultural myopia due to lack of interest in learning about other cultures or recognize what’s good in other cultures.
This is an approach an international organization employs a suitable individual for a given position regardless of cultural difference and country of origin. The reason for the approach is based on the fact that there exist a pool of skilled and knowledgeable employees and a suitable candidate who can perform their task effectively. The approach is mostly used by organizations that are following the set global business strategy (Harzing & Pinnington, 2010). Besides, the approach is appropriate with the creation of a strong unifying culture and informal management network.
Advantages of using this approach are;
- Allows organizations to use its human resources
- The organization can create a cadre of directors from international environment who can feel comfortable while working in various cultures.
Disadvantages of using this approach are;
- It is costly to implement the strategy due to training costs on the new employees
- It is challenging when there exist immigration regulations and policies.
The approach majors on hiring host country citizens to manage the business operations in their nation. In this approach, the citizens of the host nation are hired for the top position to perform activities of the subsidiaries (Lakshman, Lakshman & Estay, 2017). The reason behind the approach is that the citizens of the host nation understand their cultures better and can manage the tasks effectively compared to a foreigner who will require some time to learn the culture and values of the country.
Advantages of using this approach are;
- The challenge in the improvement of expatriates from the home country is ruled out
- The local employees are inspired to work and achieve the best for the organization
- The HR hiring locals of the host country become affordable concerning cost compared to hiring from home country
The disadvantage of using the polycentric approach
- The absence of effective communication between employees of the host and parent organization because of a language barrier
- Lack of cooperation between host and parent organization because of the absence of a connection that gets formed when expatriates from home country hold the leadership positions at the branch
- A challenge to exercise control over the subsidiary
This is an international recruitment strategy where managers are chosen from various nations existing within the geographic location of the business. The method involves sub-dividing the tasks in geographical regions and moving employees in those regions. The reason for the approach is that an individual belonging to the same region as that of the host nation understands the language, and culture (Jackson & Aycan, 2001). Therefore, it is evident that this person would understand the challenges that arise in the market better than a foreign counterpart.
Advantages of using the approach are;
- It ensures there is a culture fit because the leaders from a similar location to that of the host nation might not experience any challenge in regards to culture, values, and language
- The managers operate effectively in neighboring nations around the area of business
- The citizens of the host nation can effectively impact the decision of the leaders at the central management with regards to the whole region.
The disadvantage of using the approach are;
- The leaders in various locations may not understand the perception of other leaders working in the original organization
- The managers hired from a given location may not have international knowledge and skills
- A possibility of a communication barrier due to different languages
- A possibility of confusion between the regional goals and global goals hence the regional managers could only major on regional targets
Hofstede’s Cultural model to IHRM
Hofstede performed research on various values that are affected by the culture in the workplace (Al-Sarayrah et al., 2016). He then introduced four dimensions of culture such as power distance, uncertainty, individualism and masculinity that impact the various values in the job areas.
Large vs. small power distance
In regards to this model, the manner through which countries handle inequality varies. The imbalance can be linked with riches, power, and prestige. Staff within large power distance communities hold the fact that their superiors are always right even when they are not. However, the imbalance is not an issue in small power distance and managers are more accessible (Al-Sarayrah et al., 2016). Therefore, it is important for an organization to have search knowledge before conducting any operation such as hiring and management of the employees. It is evident that these factors can affect the relationship between a manager and a subordinate staff.
Individualism vs. collectivism
It is described as the degree that a person majors on individual needs and wants to be compared to the requirements of society. Based on this, in an individualistic culture, an individual is anticipated to only look at themselves hence the employee will not expect the organization to care for their needs. However, in collectivism, individuals exist in a society that is likely to care for one another. In this kind of culture, the employees expect the organization to care for them. Therefore, an organization has to understand these two cultures to operate effectively in global business (Al-Sarayrah et al., 2016). For instance, in collectivism culture, an organization will have to attend to the needs of the employees to exhibit that relationship.
Strong vs. weak uncertainty avoidance
Uncertainty avoidance describes the extent to which issues easily threaten an individual focus on rules and. It is also based on how members of a given society handle incoming risks. Thus, in weak uncertainty avoidance, an individual tends to take risk easily. The individuals in this kind of setting are lazy. On the other hand, in communities with strong uncertainty avoidance, individuals tend to be more structured, tends to know what will take place in the future and are more reserved. However, strong uncertainty avoidance people do not embrace change easily compared to people with week uncertainty avoidance (Al-Sarayrah et al., 2016). Thus, HR should always have this information for better strategy formulation and operation. This will allow the organization to design new strategies to handle these people without altering their values.
Masculinity vs. femininity
This model describes a situation where male values such as high salaries and a hard career override female values. For instance, research has shown that United States of America and Jamaica recorded a high score with respect to masculinity where male-dominated family issues, business discussion and other important aspects of the society (Al-Sarayrah et al., 2016). Moreover, it is evident that in masculine cultures there are clear gender roles where men are anticipated to be tough. When working in such as culture, it will be important for the organization to ensure that top managers are male as an alignment to the existing cultures.
The international HRM interest is fostering a relationship between HR activities and foreign environments. There exist approaches and models that guide the human resource management to work according to the global environment. The approaches are a polycentric approach, ethnocentric approach, geocentric approach, and regiocentric approach. These approaches provide a guideline on how human resource management can carry out its mandate of hiring employees taking into consideration cultural aspect, knowledge, and skills as well as geographical location. On the other hand, Hofstede’s Cultural Dimensions provides a guideline using aspects such as power distance, uncertainty, individualism and masculinity which are important when managing employees. The relationship between an organization to its environment especially the employees and society determine its performance.
Al-Sarayrah, S., Obeidat, B. Y., Al-Salti, Z., & Kattoua, T. (2016). The effect of culture on strategic human resource management practices: A theoretical perspective. International Journal of Business Management and Economic Research, 7(4), 704-716.
Brewster, C., Vernon, G., Sparrow, P., & Houldsworth, E. (2016). International human resource management. Kogan Page Publishers.
Harzing, A. W., & Pennington, A. (Eds.). (2010). International human resource management. Sage.
Jackson, T., & Aycan, Z. (2001). International Journal of Cross-Cultural Management—Towards the Future.
Lakshman, S., Lakshman, C., & Estay, C. (2017). The relationship between MNCs’ strategies and executive staffing. International Journal of Organizational Analysis, 25(2), 233-250.
Tosi, H. L., & Pilati, M. (2011). Managing organizational behavior: Individuals, teams, organization, and management. Edward Elgar Publishing.