INTERNATIONAL HUMAN RESOURCE MANAGEMENT

INTERNATIONAL HUMAN RESOURCE MANAGEMENT: DETERMINING THE STRATEGIES FOR EFFECTIVE CROSS-CULTURAL TRAINING

RATIONALE OF THE STUDY

            The internationalization of human resource management has increased the scope of traditional HRM. Today, HR practitioners not only manage people from their home country, but one that involve managing many diverse nationalities, with which the culture of staff and employees are already well-known or predicted. Companies start business within their country of origin and staff are hired from within that country. However, with the arrival of globalization and the shift from industrial to information technology, a new problem for HR practitioners emerged as employees become more diversified and hard to manage. Companies expand to other countries, or moreover participate in joint ventures or mergers and acquisitions. This move has many implications including the limited choice of hiring employees from the country which the company expanded. Basically, this gives HR practitioners a new challenge as they are faced with a diverse cross-cultural workforce that they are not yet familiar with. For instance, a UK or an American company expanded or having joint ventures in China would have to integrate their own HR practice in that country. However, the Chinese and Western managers have different beliefs and practices in terms of managing employees. Thus, a cross-cultural conflict might arise, which could affect the productivity and culture of the company as a whole, most especially in the branch they invested in China. Western expatriates might not be able to adapt with the Chinese way of working or any Asian way of working for that matter if they don't have proper training or knowledge about them. This gives the HR team a huge responsibility in making sure that cross-cultural relationship within the company is going well. An HRM expatriate might have problems having the best local staff when they do not have enough knowledge about the foreign culture. Furthermore, productivity might also be affected if their way of human management is not compatible with the working nature of the local staff.

OBJECTIVES OF THE STUDY

          The study will address the following three key objectives:

           

1.      To determine the different cross-cultural training strategies of multinational companies in the UK that employs expatriates from other countries.

2.      To determine the advantages and disadvantages of their cross-cultural training programmes and determine which approaches are highly recommendable.

3.      To build theories of effective cross-cultural training programmes for international human resource managers.

CONTRIBUTION OF EXISTING LITERATURES

Human Resource Management

Human resource management (HRM) is known and accepted in the broadest sense of the term, as a form of management that includes "all management decisions and actions that affect the nature of the relationship between the organization and the employees – its human resources" (Beer et al., 1984, p. 1). It is defined as the process of coordinating an organization's human resources, or employees, to meet organizational goals. As can be observed based on the definition, the tasks of those belonging in HRM can be complex as it involves all issues that encompasses employee and firm relationship. Believing that the most important asset of a business is the people in order to achieve sustained business success is the core philosophy of human resource management (HRM). Realizing this leads to a strategic management of people within the organization. Its philosophy is based on the simple belief that human resources are the most important asset in achieving and sustaining business success. This realization became the driving force behind the creation of human resource management resulting in organizations taking a strategic approach to the management of their people.

Human resource professionals basically deal with such areas as employee recruitment and selection, performance evaluation, compensation and benefits, professional development, safety and health, forecasting, and labor relations, as well as management of diversity, job analysis and job design (Lipiec, 2001).

The Internationalization of HRM

In the current age of global economy, worldwide interdependence of resources, markets and business competition thrives (Schermerhorn, 2001). The onset of globalisation has prompted businesses and its leaders to think and act globally to be able to gain competitive advantage. There are two opposing views: some view globalisation as an opportunity for limitless growth and prosperity for both developed and developing countries; while others see it as a threat to further the extent of inequality because of increased competition and the dominance of market forces seen in multinational companies (MNCs) (Johnson & Turner, 2003).

The implications of these changes in international business are far-reaching because of the emphasis on interdependence which prompts a discussion of the different collaborative arrangements between MNCs. As national boundaries have increasingly been blurred, it has become imperative that MNCs take advantage of forming collaborative arrangements or cooperative strategies which are believed to be a productive method to promote growth. This trend has affected even companies directly competing with each other as Hitt, Ireland & Hoskisson (2003) has given the example of FedEx and the US Postal Service (USPS) forming an a seven-year alliance which benefits both companies.

One of the areas of business organization that is affected by the internationalization of business is the area of human resource management. Because business has become internationalized, the process and factors that make up the HRM concept have also become global. Thus, out of HRM, a new field has been formed – that is International Human Resource Management or IHRM. The field of IHRM refers to the: "…understanding, researching, applying and revising all human resource activities in their internal and external contexts as they impact the process of managing human resources in enterprises throughout the global environment to enhance the experience of multiple stakeholders, including investors, customers, employees, partners, suppliers, environment and society (Briscoe and Schuler, 2004, p,20).

            Briscoe and Schuler (2004) explained that there are many forms of IHRM. These are: the operation of parent-country firms overseas; and the operation of foreign firms in the home country. The first one involves the situation of working as a parent-country HR professional in the main or regional headquarters of the traditional multinational enterprise (MNE). This may involve working as an expatriate HR manager in a foreign subsidiary of an MNE (Briscoe and Schuler, 2004). Typical headquarters IHRM responsibilities include selecting and preparing employees for and transferring them between the various country locations of the firm, determining and administering compensation and benefit packages for these international assignees, and establishing HRM policies and practices for the firm's foreign operations (Briscoe and Schuler, 2004).

On the other hand, the second situation involves the HR manager working at home in the foreign subsidiary of a foreign MNE (Briscoe and Schuler, 2004). The possibilities include: working for a home-country firm that has been purchased by a foreign firm and thus is now a foreign-owned firm; and working with a foreign headquarters (and, often, expatriate managers sent from the foreign - now parent - company) and typically will involve having to integrate into the local operations - the HR manager's home country - a philosophy and organizational culture and practices that are different and/or unfamiliar (Briscoe and Schuler, 2004).

The Need for Cross-Cultural Management

            The situations that IHR managers might face involve dealing with different people with different culture. Managing culture is one of the tasks that an international human resource manager has to deal with. Culture is defined as a set of beliefs and values widely shared in a specific society at a particular point in time (McGuire et al, 2002). Furthermore, culture encompasses a set of fundamental values that distinguishes one group from another (Hofstede and Bond, 1988) and these values can act as a strong determinant of managerial ideology that consequently affects both HR practice and performance (Laurent, 1983).

            Culture is basically a combination of shared beliefs, social norms, organizational roles and values, emphasizing a cross-cultural socio-economic perspective in industrial and management research (Wang, 1993). One example is that the Eastern style of management is different from that of the West. The Chinese approach is usually based from historical leaders and philosophical figures such as Confucius, Sun Tzu, Mencius and Han Fei (Satow and Wang, 1994), which involves and depends on the connections, on circumstances, on the level of affinity (who you know and what family you come from). Here, there is no consistent legal framework and, even within the regulations that do exist, the exception is the rule rather than the rare occurrence. On the other hand, the management in America is objective and driven by data and rational models. Deployment of statistics and financial modelling is the key in decision-making and strategic planning. These differences alone can create problems. Chinese employees may not function well with the Western management style and vice-versa. Thus, foreign expatriates should obviously be trained, as making themselves familiar with the new culture can help them create the appropriate management style that will make employees in the country perform at their best.

Cultural Dimensions

One of the ways to assess culture is to take heed of its value dimensions. As explained by Hofstede (1980), there are four cultural value dimensions:

Ø      Large versus small power distance. Large power distance is the extent to which the members of a society accept that power in institutions and organisations is distributed unequally; while small power distance is the extent to which members of a society or organization accept that power is distributed fairly (Adler, 1997).

Ø      Strong versus weak uncertainty avoidance. Strong uncertainty avoidance means the degree to which the members of a society feel uncomfortable with uncertainty and ambiguity, which leads them to support beliefs promising certainty and to maintain institutions protecting conformity; while weak uncertainty avoidance is the degree to which members tend to be relatively tolerant of uncertainty and ambiguity and require considerable autonomy and lower structure (Rodriguez, 1995).

Ø      Individualism versus collectivism. Individualism is the preference for a loosely knit social framework in society; collectivism stands for a preference for a tightly knit social framework.

Ø      Masculinity versus femininity. Masculinity is the preference for achievement, heroism, assertiveness and material success; while femininity refers to a preference for relationships, modesty, caring for the weak and the quality of life.

Related Studies

Sadri and Lees (2001) stated that there are key elements to determine a positive culture. They are: the development of a corporate vision; the development of corporate values; valuing and maintaining communications with employees; adaptability; and perpetuation of the culture through tangible symbols, slogans, stories, or ceremonies that highlight corporate values. However, these positive characteristics can be easier said than achieved as the workplace involves different nationalities that do not share the same pattern of beliefs. An incompatible management approach brought and implemented by foreign expatriates can result in the development of a negative corporate culture. Expatriates who have poor performance in their cross-country assignments cost multinational enterprises (MNE's) billions of dollars, damage firm reputation, disrupt relationships with local nationals (Harvey, 1996; Welch and Welch, 1994), and often precise a cost on expatriates' psychological state (Solomon, 1996). Expatriates are proposed to gain intercultural communication skills and, consequently, intercultural effectiveness through a cultural learning process.

            Fischer and Hartel (2003) conducted a study that tries to determine comparatively how Thai and Western managers conceptualize intercultural effectiveness and to identify the extent to which perceptions of socio-biographical characteristics are important to Thai managers' perceptions of the effectiveness of a Western manager and vice versa. The qualitative study found that both considered religion, age and gender, nationality as important; while they have different views on the importance of stereotypes, linguistic abilities, intercultural abilities and identifying task and contextual performance.

            Hutchings (2002) investigated the need for careful selection and in-post support of expatriates in China and argues that expatriates should be those who possess realistic pre-departure expectations and cultural awareness and knowledge, and  whom are provided with in-post support, including work-related skill development, mentoring and consultative groups. Through semi-structure interviews of Australian organizations in China, the research found that that expatriate selection is very much ad hoc in nature and that expatriate preparation and cross-cultural adaptability skills need to be improved in a number of important aspects. Hutchings (2002) suggested that "there is a clear need for

expatriates to be fully briefed prior to being sent on overseas postings and that careful selection should be balanced with goal-setting, performance expectations, and awareness of socio-cultural limitations of operating from a business and social perspective in the host environment" (p.46).

METHODOLOGY

            The research design to be used is the descriptive approach. This type of research presents facts concerning the nature and status of a situation, as it exists at the time of the study (Creswell, 1994). This also believes that the relationships and practices that exist, beliefs and processes that are ongoing, effects that are being felt, or trends that are developing. (Best, 1970) Furthermore, such approach tries to describe present conditions, events or systems based on the impressions or reactions of the respondents of the research (Creswell, 1994).

Quantitative approach will be used in collecting data. Quantitative method is compatible with the study because it allows the research problem to be conducted in a very specific and set terms (Frankfort-Nachmias and Nachmias, 1992). Besides, a quantitative research plainly and distinctively specifies both the independent and the dependent variables under investigation (Matveev, 2002). It also follows resolutely the original set of research goals, arriving at more objective conclusions, testing hypothesis, determining the issues of causality and eliminates or minimises subjectivity of judgment (Kealey and Protheroe, 1996). Further, this method allows for longitudinal measures of subsequent performance of research subjects (Matveev, 2002). Finally, it provides achieving high levels of reliability of gathered data due to i.e. controlled observations, laboratory experiments, mass surveys, or other form of research manipulations (Balsley, 1970).

Data Collection

            The data for the study will be collected through survey. Survey is the chosen method to collect data because its function is to generalize results from a sample to a larger population. (Commonwealth of Learning, 2000) The primary purpose and advantage of surveys is generalization of the results (Commonwealth of Learning, 2000). Usually, surveys are interested in gathering data from many than in obtaining intensive, detailed information from a few individuals; therefore, it is seldom for a survey to consist of one or very few individuals (Commonwealth of Learning, 2000). Consequently, in designing a survey research study, one has to take into consideration the sample and the sampling procedure: the sample size should be adequate to allow generalization of the results, and the sampling procedure should also be such that small sub-groups within the population (such as landless farmers) are properly represented in the sample (Commonwealth of Learning, 2000). This is because errors in sampling procedures may not justify generalization of the results, thus lowering the value of the survey (Commonwealth of Learning, 2000).

A semi-structured questionnaire will be used to collect data.      This survey-questionnaire will have two sections. The first part will intend to acquire the demographic profile of the respondents, while the other section will contain a set of attitude statements. The purpose of the set of attitude statements is to determine the level of agreement or disagreement using a five-point Likert scale. In the Likert technique, the degree of agreement or disagreement) is given a numerical value ranging from one to five, thus a total numerical value can be calculated from all the responses. (Underwood, 2004) The equivalent weights for the answers will be:

Range                                                            Interpretation

            4.50 – 5.00                                                    Strongly Disagree

            3.50 – 4.00                                                    Disagree

            2.50 – 3.49                                                    Uncertain

            1.50 – 2.49                                                    Agree  

            0.00 – 1.49                                                    Strongly Agree

Sampling

The respondents to be surveyed are MNCs in the UK that have joint ventures or direct investments in Asian countries such as China, Japan, or Southeast Asian nations. Potential respondents will be first chosen from the DTI list of MNCs, and then emails will be sent for their approval on the survey. Questionnaires will also be submitted through emails and will also be returned to the researcher through emails.

The formula suggested by Saunders, Lewis and Thornhill (2003) will be used to determine the actual sample size required in the study. First, the total population of a particular online MBA school and a traditional MBA school will be acquired. The estimated total response rate will be estimated with the formula that was suggested:

            Total response rate   =              Total No. of Responses

                                                        Total No. in Sample ineligible

                                                                       

Then, the actual sample size will be calculated with the following formula:

nª =           n X 100

                                                        re%

            In the formula, nª is the actual sample size required; n is the minimum sample size, and; re% is the estimated response rate expressed as a percentage.

           

Systematic sampling will be used to calculate the valid number of respondents needed. A probability sampling approach was chosen to avoid the bias of non-probability sampling.

Data Analysis

Data will be analyzed through percentage and mean analysis. SPSS software will be used to compute the data gathered. Determining the mean and percentage on the level of response of the respondents on the items in the Likert-type questionnaire will statistically show the relationship between lack of cross-cultural training and learning, and poor performance of the HRM expatriate.

Potential Limitations

The study is limited only to MNC's headquartered in Europe that has expansions in mainland China. However, persuading companies to participate in the study may be difficult because it will involve setting up appointments with the managers of the company.

Another potential limitation of the study is that respondents may not take the questionnaires seriously since it is only structured; meaning answer choices are already provided. So, in order to promote participation among respondents, the study's purpose will be clearly explained on the survey questionnaire. TIMEFRAME

	5-April	15-May	1-June	25-July	10-Aug	25-Sept	5-Oct	25-Nov
PROPOSAL
INTRODUCTORY CHAPTER
LITERATURE REVIEW
RESEARCH DESIGN
SURVEY-QUESTIONNAIRE
CONDUCTING THE SURVEY
CONDUCTING INTERVIEW
DATA COLLECTION
PRELIMINARY ANALYSIS
FINAL ANALYSIS
SUBMISSION OF PROJECT

Table 1: Timetable

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