Standardising HR Practice in IT Company - Essay Example

Standardising HR Practice in IT Company Introduction It is a fact that one of the major assets of a certain company is its manpower working for the achievement of its corporate goals. This is due to the fact that the manpower is significant force of the company in order to successfully implement its corporate strategies and goals. In this regard, it is the main function of human resource department to take charge in effectively handling the manpower in order to successfully implement the company’s strategies and eventually its goals. According to Vance and Paik (2006), one of the most important ways of transferring a firm’s critical capabilities is through human resource management(HRM). However, the situation might be a little bit complicated when it comes to handling manpower in the multinational company, which has operations in all over the world with different cultures and values. Globalisation is a very important concept. Knowing it fully will pave way to understanding how entirely a multinational level company should operate. Clive (2001) defined multinational companies as those with strategies and ability to organise allowing them to become sensitive and responsive to variation in national environments worldwide. From this definition, it is clear that the complexity in handling multinational company is taken into consideration. Paralleling the culture and technological innovations of recent time has been the most important development of a global business.For instance, the fact that there are differences of culture and other environmental factors from one country to another is a very important issue that the human resource department should take into consideration as far as the operation of company is concerned on a global basis. IT Company HRM Strategies Let us now take a look at the case of a large multinational organisation, the IT Company. In the early 1990s, the IT Company as a large multinational organisation with relatively powerful independence was structured around geographical areas. This lead to different Human Resource (HR) policies that existed between countries where IT Company existed and this resulted further to different HR practices in areas such as training, pay and flexitime. In the early 1990s due to emerging global and local competition, IT Company experienced economic trouble. With this, the organisation tried to change its business and organisational structure. The decision-making authority of local managers was reduced and responsibility transferred to Paris and to the US as regional headquarters where regional managers have the total control on decision making process. In addition to this, business units were instituted which the purpose was to give them responsibility over certain range of products such as printers or IT solutions. Business units were also encouraged to standardise on a global basis its finance, marketing and human resources. IT Company Obstacles Different HR practices in areas such as training, pay and flexitime can be major problems considering that IT Company tries to work on a global setting. This alone can be considered an obstacle with regards to implementation of human resource management policies. This means that as much as possible, the IT Company has to maintain an organisation with harmony in its policies so as to effectively promote its strategies in the global setting. Another situation, IT Company has only ensured some of the core values to be applied throughout its entire organisation in the global arena. This means that some core values applied in the mother company do not actually apply to other business units in other countries. This alone is another probable obstacle to implementation of global human resource management considering that IT Company needs to clearly define a culture that will totally unite its people in terms of knowledge transfer and more. Since the decision-making authority of local managers was reduced and responsibility transferred to Paris and to the US as regional headquarters where regional managers have the total control on decision making process, this means that the regional managers have greater power. This also means that with such great power, comes great responsibility. In order to achieve complete achievement of such responsibility, the regional managers of IT Company have to clearly enhance themselves with key competencies. The role of human resource in regards to this needs to be clearly defined especially that it has to be applied in the global setting. This can be an obstacle considering that manpower needs to have suitable training in order to become effective. Recommendations for overcoming obstacles: It is in this regard that this paper tries to evaluate the areas of HR practice that should be standardised on a global basis and the brief analysis of the obstacles in implementing these global Human Resource Management policies. This paper also gives recommendation in overcoming these obstacles. Since the IT Company instituted regional managers, this paper also includes the identification of their key competencies needed in the business. This also included the discussion to which these competencies vary according to the information available from related literature. Combining all these information, the proponent of this paper finally gives suggestions for management development within the organisation. The case of IT Company as a multinational company is a common case encountered by almost every multinational company. Things that are clear in the case of IT Company are standardisation of its policies, most especially on training its manpower and ensuring effective knowledge transfer. In order for IT Company to compete in the global scale, it has to effectively train its personnel and manpower to create the best of them. This can be best implemented by providing its personnel the knowledge aligning with the company’s global corporate goals. Vance and Paik (2006) highlighted that one of the primary developing areas in human resource management is business globalisation which involves sourcing of the right people on overseas postings, effective staff management and sharing of greater expertise with the staffs. Vance and Paik considered international assignment as mechanism of knowledge transfer. Vance and Paik presented two types of knowledge, the explicit and implicit knowledge. Explicit knowledge can be expressed in words, numbers and can easily be communicated. The implicit knowledge is not easily visible or expressible and not easy to share or communicate with others. The implicit knowledge is also considered know-how or learned skills. In globalisation and its underlying competition, it is important to make strategic moves in order to survive tough competition. For instance, the marketing function according to Porter (1986) needs centralised training as an effective tool to effectively implement a global strategy. Porter added that the good things about centralised marketing training are the following: 1. Ecomies of scale in the production and training programs delivery. 2. Faster accumulated learning as a result of gathering the people with varied experiences in one location. 3. Increase the chance of being uniform in implementing marketing programs. The point of Porter talks about centralisation. This underlying concept can be applied to IT Company. In fact, it does by centralising the decision making to its regional headquarters and its regional managers. This is clear as one of the best approaches the company sees in order to compete. However, there is another thing this has to take into account prior to making it a good system for IT Company. There is a need of coordination among regional managers and local managers of IT company. This is a clear competency among employees of higher rank that they need to take into account so as effective knowledge transfer can be successfully implemented. However, Porter added that the obstacles of this centralisation might be language barriers, travel time and cost and availability of training materials and qualified training personnel. Thus, it is implied that in order to successfully implement the knowledge transfer, the human resource management department needs to understand how to successfully combat these obstacles. The HR department needs to understand various strategies and organisational structure of multinational corporations. This might as well be added as one of the key competencies among regional managers and local managers of IT Company. Verlag (2001) presented common strategies and organisational structure of multinational corporations. These are multidomestic strategy, international strategy, global strategy and transnational strategy. The multidomestic strategy adheres to local conditions especially on market, products, taste and policies in the local setting. The problem with this strategy when it has to be applied to IT Company is that it cannot be effective when it comes to the issue of centralisation considering that it adheres to local conditions. The international strategy is concerned with transferring knowledge and expertise to foreign markets, less advanced in terms of technology and marketing though. However, the multinational company with international strategy is both adapting to local condition and global responsiveness by transferring knowledge and expertise across boarders. Subsidiaries here are dependent on headquarters in terms of new products, strategies and ideas. Therefore, coordination with headquarters is important. The case of IT Company is strongly linked to this strategy. One thing it has to consider though and that is strong coordination with every one involved. The global strategy is more on pursuing global efficiency and consistency, standardisation of products by integrating production and sold them in a standard market through foreign subsidiaries. In this case, the human resource management needs to be standardised as well. However, there is difficulty in doing so considering that the local setting is not much of consideration when in fact, in the case of IT Company as multinational organisation needs to fully integrate its standards with the existing local environmental condition. Transnational strategy is aiming to be locally responsive, globally efficient and pursue world-wide learning. There is a center of excellence among subsidiaries and they have the freedom to decide. On the management style on the other hand, Verlag discussed three styles, such as polycentric management style, ethnocentric management style and geocentric management style. Polycentric management style recognises cultural, legal and political factors to vary from every country. Therefore, the management of human resource will be given to local management and local environmental conditions. Ethnocentric management style adheres to the principle that home country practices are superior to host countries or countries where subsidiaries belong. Geocentric management of style has a world-wide approach in which subsidiaries collaborate with headquarters to establish universal standards and permissible local variations. Whatever management style or strategy the IT Company will implement; there is one thing clear that needs to be taken into consideration. Effective human resource management in the global setting needs to take into account the variations in local environmental conditions including but not limited to for instance, culture, environment, politics and more. All of these can stand as potential obstacles to standardising human resource management in a global setting and probable variation of adaption among regional managers at IT Company. Another consideration would involve completely equipped manpower and regional managers when it comes to understanding different strategies and management styles across borders. In this regard, there is a great role of effective knowledge transfer to completely enhance competencies among regional managers. Regional managers: Key competencies In IT company, there are different business units which the bottom line was to standardise management functions such as finance, marketing and human resources on a worldwide basis. This means that regional managers have better grasp on understanding different culture. This system only emphasises that regional managers need to look at whole range of perspectives by dealing with manpower. Understanding culture may not be enough. With their newly instituted responsibility, regional managers at IT company have to be well versed on the following aspects: a. customers b. financial c. learning and growth d. internal business process Managers must be able to appreciate the value of diversity and as much as possible will be much knowledgeable on creating effective group cohesion by understanding individual differences at the deepest level. Regional managers: suggestions for management development Everything must start with the human resource management considering that the whole system of IT Company relies heavily on manpower. In this case, regional managers must effectively promote wider range of acceptable improvement on their human resource departments. In order to effectively implement various strategies of human resource department it is also a good idea to consider criteria of implementation and with this, it can be evaluated by regional managers to what they think would be needed in their areas of responsibility. Sparrow et al (2004) explained that in the perceptions of effectiveness of human resource, the information human resource (IHR) can create performance criteria and genuine ratings of effectiveness coming from the employees and line managers operating in different units throughout the world. Sparrow et al presented the following tasks that should be implemented by the human resource on organisation wide. 1. Human resource needs to ensure as being the strategic partner in global business. 2. Global leadership development through developmental cross-cultural assignments. 3. Training and development of all employees to advance their mindset. 4. Improvement of worldwide communication through a formal system. 5. Designing and implementing human resource information system. The following are what the human resource should implement within the human resource function (Sparrow et al., 2004). 1. Flexibility in human resource programs and processes. 2. Encourage information exchange by developing relationship with international human resource counterparts. 3. Ability to contribute to organisation as expression of its worth. 4. Ability to strategic advantage by maketing human resource globally. CONCLUSION: We may conclude this report by the above discussions and arguments, globalisation and standardisation of human resource management are not easy tasks to do. These are complicated at some point. Culture really does matter. For all of the effects of globalisation, data still suggest that there are tangible cultural differences between workers in different nations, and that these differences express themselves in particular ways.However, what human resource needs is just the basic in order to effectively implement effective standardisation of policies and procedures across boundaries. This means that obstacles need just only be surpassed and put into consideration. This can be effectively exercised by enhancing key competencies required of the regional managers and the human resource management personnel in the case of IT Company. Read More