Staffing Management - Essay Example

? Assignment IB Questions How can companies manage the risks associated with international management recruitment and selection? In a global competitive environment, the firms are plunging into the international markets and establishing their businesses in foreign locations in order to expand their business as well as to maximize their profit portfolio. A firm faces tremendous challenges in the field of human resource management whether it is in the domestic or international locations. But greater complexity of managing international operations arises with the multinational companies to ensure a high quality standard of human resource management over a domestic business set-up. International management recruitment and selection mechanism are exposed to various risks which the organizations are required to manage and select appropriate hedging techniques. The management plays the pivotal role in managing the risks faced by the organizations. Political risks are one of the important risks which the multinational firms quite often face. “Political risks are any governmental action or politically motivated event that could adversely affect the long-run profitability or the value of a firm” (Deresky, 2006, p.30). In order to manage the political risks identification of the risks is crucial. The risks faced by the firms may be firm-specific risks that affect the firms at the corporate level with conflict between the firm and the host government. In order to manage these risks the firms enters into negotiation of an investment agreement to purchase investment insurance and guarantees, to modify operating strategies in production, logistics, marketing, finance, organization, and personnel at the corporate level. Cultural and institutional risk evolve from host country policies with respect to ownership structure, human resource norms, religious heritage, nepotism and corruption, intellectual property rights, and protectionism. Managing cultural and institutional risks requires the MNCs to understand the differences, take legal actions in host country courts, support worldwide treaties to protect intellectual property rights, and support government efforts to create regional markets (Foreign Investment Decisions, 2005, p. 460).Closely connected with the political risks is the economic risk of the country. Various approaches are adapted by the mangers to manage the economic risks. The quantitative approach is devised to assign different weights to economic variables in order to produce a composite index used to measure the country’s creditworthiness over time and also to make comparisons with other countries. The problem of this approach is to do not incorporate different stages of development among the countries it compares. The qualitative approach estimates the economic risks of a country by assessing the capability of its leaders as well as analyzing the types of policies they are likely to implement. The future dimension of the economy of the country can be estimated from this approach. In another approach which is the checklist approach, the researchers develop several vulnerability indicators that categorize the countries in terms of their ability to withstand the economic volatility. Majority of the corporations try to use the combination of all these approaches to manage the economic risks faced by the organization (Deresky, 2006, p.34). Repatriate turnover not only results in a loss of human capital investment for the MNC in general but also increases the risks the possibility of losing this investment to a direct competitor. To reduce the risk of repatriate turnover, MNCs will emphasis on the structuring of the short-term oriented HR practices inculcated with longer-term instruments such as integrating international assignments into individual career paths. Research has focused that the short-term assignees may fail to expand helpful relationships with local colleagues and customers at the same time facing increased risks of marital problems. One of the staffing policies in this case is executing business trips for carrying on irregular specialized tasks such as annual budgeting meetings or for stabilizing personal relationships with key colleagues and customers in the host country. There are several other risks faced by the MNCs but the scope of discussion is limited here. Still some of the prime risk management technique used in the international management recruitment and selection is discussed (Reiche & Harzing, 2008, pp. 33-36). 2. Read the job background note in Module 7 and answer the following two questions: 2.1. What questions would you ask each candidate, if you were interviewing them for the assignment? According to me questions to the assignees should always be made on the basis of their individual professional background keeping accordance with the assigned profile in mind and the corresponding demand of the company. Professional background of Jim: Currently Jim is the Vice President of the Manufacturing department of the Ozarks furniture Company, USA and he is being attached with the company for a long time. He is also recognized as a hard working employee with a good professional reputation but he has been never been to Romania. His age is 27 years old. He has traveled to the European country of England. Questions for Jim: 1. What kind of pay and benefits would you expect from your employer? 2. Will you be able to maintain your performance level in Romania? 3. What will be your profit maximizing strategy for your organization? 4. How will the cultural gaps in Romania affect your professional performance, and how will you balance them? Professional background of Sarah Smith: Associated with the company for two years as the Director of Marketing for the company and holding an M.B.A. from the University of Arkansas and prior experience in advertising and sales is known to be a perfectionist. She can speak English, French, and Spanish and has international travelling experience to Canada, Mexico, Costa Rica, Venezuela, Chile, Argentina, France, Ireland, and England. Her age is 32 years. Questions for Jim: 1. What is the latest trend in global compensation? 2. You have an MBA degree from the University of Arkansas. How will your educational background influence your professional performance in Romania or how will you apply your managerial skills to formulate the optimal strategies for your company? 3. You have explored a lot of international destination. Will that be an added advantage or will that act as hindrance for your future international venture to Romania? 4. What will be the nature of your managerial attitude and how will you deal with the local employees? 5. What kind of pay and benefits would you expect from your employer? Professional background of Gus Dinu: Gus Dinu is the production supervisor at Ozarks for the past 12 years. He started his career in auto repair. Being a teen ager he spent his life in Romania when his family emigrated from Romania. He can speak English, Romanian and some Russian. Gus has also travelled to Romania and France. Questions for Gus: 1. What kind of pay and benefits would you expect from your employer? 2. Having Romanian roots will be an advantage for dealing with the customers and carrying out business or will it be a hindrance? 3. What will be your optimal working strategy and how will handle the workforce? 2.2. Which candidate would you select and why? Having discussed the professional background and basic demographic information like marital status and age it can be inferred that Gus Dinu is the best candidate for this assignment. The company has focused on the shift of the labor- intensive manufacturing sector in Romania. Gus having spent his teen ages in Romania, being able to speak both English and Romanian and spending 12 years of professional life in the company he definitely bears a competitive edge over the other two candidates. Again he started his career in auto repairing which is a labor intensive sector. Although he may not holding high educational degrees from reputed academic institutes but his long experience will definitely enhance him to understand the business dynamics. For these reasons I think that Gus Dinu is the most deserving candidate among the two. General Questions 1. What are the major alternative staffing approaches for international operations? Explain the relative advantages of each and the conditions under which you would choose one approach over another. There are different alternative staffing policies followed by the multinational companies in staffing procedure. Following an ethnocentric staffing policy a MNC would appoint mostly parent country national (PNC) [e.g. a German employee working at the Chinese subsidiary of Volkswagen (a German automobile company)] to top positions at their subsidiaries. Following a polycentric staffing policy the company w would prefer to appoint host country nationals (HNC) [e.g. a Chinese employee working at the Chinese subsidiary of Volkswagen] at the top positions. Following a geocentric staffing policy the company would simply appoint the best person despite of his/her nationality and that could include third country nationals (TCNs), nationals of a country other than the MNC’s home country and the country of the subsidiary. In a regiocentric approach, managers are transferred on a regional basis forming an amalgamation of a pure polycentric/ethnocentric approach and a truly geocentric approach (Haile, 2002, p. 7). High level of political risk in the host country often tends to make direct control through expatriates more significant as the risks of loss of income or assets might be sizeable. In these situations the companies basically hire HCNs in top management positions rather than PCNs as they are less expensive to employ than PCNs. The cost of living in the host country may be greater in the host country may be higher than the home country and in these situations the data suggests that local managers have quite well adjusted to the high cost of living and would not require supplementary compensation which would be required to be provided to a PCN (Reiche & Harzing, 2008, p.12). 2. Why is the HRM role so much more complex, and important, in the international context? The advent of internationalization and globalization has made the human resource management (HRM) much more complex and significant phenomenon in the global platform (Huntley, du Plessis, 2009, p. 413). The key variable that is most significant and has made the process complex in International Human Resource Management (IHRM) is the employment of different national categories of workers. Other complexities arise in the housing arrangements, health care, compensation packages etc internationally. Strict and detailed HR (Human Resource) activities are required to control the work force mix of expatriates and locals. The mechanism becomes more complex with the human and financial consequences of failure in the international arena as compared to the domestic business sphere as well as with the nature of the government, state of the economy and the accepted policies and procedures of the host countries. Several other factors like choices and elements of administrative heritage, culture shock, varied corporate values conflicting with their national culture adds to the complexity of the IHRM process (Huntley, du Plessis, 2009, p. 415). 3. Explain the common causes of expatriate failure. What are the major success factors for expatriate assignees? Explain the role and importance of each. Expatriate failure is defined as a posting which ends in negative results as for example employees not being able to adapt positively which results in the loss of work efficiency and providing unprofitable investments for the company. The major causes for the expatriate failures may be manifold. The common reasons for expatriate failure may be seen in two dimensions, one is external, and another is internal. The external factors may be said to be given and include factors such as political, economic instability of the country, corporate factors like changes in structure. The internal factor is the most important factor that is the employee factor i.e, the incapability of the employee to adapt to the new environment. This includes lack of adaptability of spouses, family problems, difficulties with the new environment, lack of technical skills, lack of ability to cope up with the increased responsibility and so on (Kniel, 2008, p.17). There are several success factors for expatriate assignees. The two major success factors for the expatriate success are relational skills and cross-cultural competence (DeNisi and Toh, 2005, p. 132). Relational skills consists of competencies related to fostering and developing relations in terms of dealing with people, developing relationships with locals and colleagues, not being self-centered, possessing social dexterity and orientation, being cooperative and developing skills in conflict resolution (Yamazaki, n.d., p.17). Cross-cultural competence include caring for, respecting, and understanding people of different cultures which forms an important component of cross-cultural learning. In this category also falls the development of intercultural sensitivity, extra-cultural openness, greater sensitivity to needs and values of others (Yamazaki, n.d., pp. 17-18). 4. What career risks would you be taking by accepting an international assignment soon after graduating from college? Do you feel the potential opportunities of an early international assignment would outweigh the potential risks? After graduating from the college, I would like to take up an international assignment related to a managerial post. From a career standpoint, the advantages are numerous. An overseas assignment will provide the exposure of understanding and doing the business in a better way. I think it will improve and develop new competencies and polish existing skills providing broad range of experience in exploring the cross cultural dynamics and carrying out business in a diversified environment. Getting placed in an early international assignment will definitely provide the opportunity to outweigh the potential risks and it will also enhance the future market moves. Case question: 1. What should William Zukowski do now? William Zukowski in this case may implement a new policy that would not hamper the Polish sentiments and recruit Polish managers in the hierarchy as wells as stress on the recruitment of the Polish workers rather than emphasizing too much on the American workers. Optimal compensation schemes should also be devised and implemented in order to keep the work environment spontaneous. 2. Should William Zukowski change the company structure regarding employee compensation his employees based on their qualifications, training, and productivity? William Zukowski will require changing the company structure regarding employee compensation based on their qualifications, training and productivity because it will make the workforce more organized and systematic which will accelerate the profit margins in the long run. In the short run, the local organizational and work culture may hinder the growth process of the company to some extent but such concrete policies need to be adapted. 3. What could have been done better regarding William Zukowski and his family?s preparation before leaving home and after their arrival? From the text it is known that wife and the children of Zukowski were excited to go to Poland to explore the foreign culture. But they did adapt any concrete plans to adjust with the environment of the country. Before leaving Chicago Zukowski’s wife and their children needed to receive some understandings of the Polish culture and education. After arriving his wife would have taken a job so that she could get acquainted with the working environment of the country and adjust accordingly and make their living better. 4. Do you think the host-country/home-country employees should have received the same amounts of compensation? The host country employees and the expatriates would be given the same amount of compensation as calculated to the host country cost of living standards to attract the market forces initially. This carries special emphasis in communist countries like Poland where the notion of equal distribution carries a great significance. After stabilizing to a certain extent the company would then restructure its payment policies according to various parameters like productivity, cost of living standards, cost structures, discounting factors and so on. In this case the American employees received more than the Poland employees although the wage rate provided to them were above the domestic rates. The discrimination injected within them with pessimistic feelings and ultimately resulting in strong opposition. Activity 4 Internationalmovers.com specializes in helping people to transfer their belongings to different parts of the world. The link below offers a broad checklist that families should consider. Yet how many of the points listed should be the responsibility of an employer and its HR department? Does an employer have a responsibility to monitor the progress made by their employees and their families in an overseas assignment? The Human Resource department and the employer must focus on some priority products related with the employees and their families in an international posting. The first priority will be the accommodation of the employee and their families. The other priorities must include the employee’s facility of local transportation, language, food availability, and schooling of the children, visa and passports, local customs, travel arrangements (Shaw, 2012). The employer should definitely have the responsibility to monitor the progress made by their employees and their families in an overseas assignment. Their primary job is to supervise that the work performed by employees is completed on time and at the highest level of quality. But on the other hand the employer must also posses the responsibility and awareness regarding the needs of the employees and their families. The employer must know the way to motivate the employees, maintaining a good moral within the employees in the execution of their work, provide employees assistant program. It has been found that the employees who are happy and enthusiastic in their job profile and take pride in their work are generally found to be more productive, loyal, and responsive to overall corporate goals. By actively performing and taking the responsibility the employer also gets to learn a lot about the global work environment which will act as a drive to them in expand their business to new heights. The employer must act as a supervisor, advisor, human resource manager, and student (Human Resource Policy Guidelines, n.d., pp. 100-1- 100-6) References Deresky,(2006), International Management: Managing Across Borders And Cultures, Pearson Education India Foreign Investment Decisions, Political Risk Assessment and Management (2005), Retrieved on May 21 from: http://www.aw-bc.com/scp/0321280318/assets/downloads/ch17.pdf Haile, S (2002), Challenges in International Benefits and Compensation Systems of Multinational Corporation, Retrieved on May 21 from: http://www.theaebr.com/v3n1Haille.pdf Huntley, K & du Plessis, A. J., (2009), Challenges in A Globalised Context For International Human Resource Managers in South African Organisations, Retrieved on May 22 from: http://www.bizresearchpapers.com/33[1].%20Andries.pdf Human Resource Policy Guidelines, (n.d.), Retrieved on May 22 from: http://www.rpi.edu/dept/hr/policy/HRPolicyGuidelines.pdf Kniel, S (2008), Evaluating intercultural learning. Developing key skills through the international Dukenet Markstrat programme, Kassel University Press Shaw, L. (2012), 5 Mistakes When Moving Internationally, Internationalmovers.com, Retrieved on May 22 from: http://www.internationalmovers.com/international_guide/moving_international_mistakes.html Reiche S. B. & Harzing A, W., (2008), International Human Resource Management, Retrieved on May 21 from: http://blog.iese.edu/reiche/files/2010/08/International-Assignments_Reiche-Harzing1.pdf Yamazaki, Y (n.d.), An Experiential Approach to Cross-Cultural Learning: A Review and Integration of Competencies for Successful Expatriate Adaptation, Retrieved on May 22 from: http://learningfromexperience.com/media/2010/08/Yamazaki_and_Kayes.pdf Read More