International HRM Practice In Australia For Multinational Company

Hofstede’s model of cultural dimension

Question:

Discuss about the to International Human Resource Management for an Organization Expanding Into New Host Country. 

Australasia is known as the Commonwealth of Australia and is a sovereign country consisting of mainland of Australian continent, the Tasmania island and other islands. The Australia is the country that comprises of various national and multinational companies with proper legislative system and employment system. The fast growing population is responsible for providing the adequate employees to the multinational companies that has expanded in Australia. The current scenario and context of the international human resource management presents some factors that needs to be considered for employment in the multinational companies of any country (Sparrow, Brewster & Chung, 2016). Similarly, Australia is no different in terms of human resource management. The chosen Singapore based company for the report needs to consider rules and regulation in the international Human Resource Management (HRM) (Brewster et al., 2016). In the present context of international business, the cross cultural management is also another major factors that must be considered at the highest priority to avoid any cultural conflicts among the employees of different cultures. On the other hand, the company needs to ensure the proper implementation of employment policies and training procedures in order to manage the human resource of the company. The following section presents the detail report on the international HRM practice in Australia for multinational company.

Considering the fact of business expansion of the Singapore company to Australia, the organizational structure of the both the workplace of Singapore and Australia for evaluating the difference of cultural dimension. In regard to this, Hofstede’s model of cultural dimension is the appropriate and effective tool to assess the cultural diversities of the host and home country of the organization.

Cultural dimensions of Hofstede are based on five different factors that determines the cultural acceptance and practice of the people of different country (Dartey-Baah, 2013). The following section uses the five factors of cultural dimension in terms of comparing the cultures of two countries.

Power distance in Singapore is high which mentions that the country has strong class system. The society is based on the unequal relationship among people. Therefore, in the host country the organizational power is centered on the managers and they dominate the employees. The communication and culture of the organization is formal (Hofstede, 2013). On the other hand, the power distance is low and the relationship between the people is almost equal and easy. However, the chosen company has hierarchal structure in the organization but the managers are always accessible and the communication is both formal and informal as per the necessities.

Power distance in Singapore and Australia

The country has collective society where the living in groups and valuing the relationship is important. The people here are family oriented and harmonious. The organizational structure is based on the collectivism where the opinions groups are mattered than individuals. On the other hand, the society of Australia is more individualistic and people here values the individual opinions (Wiewiora et al., 2013). In most of the cases people are not family based. Therefore, in the workplace the individual decisions are prioritized and valued. 

Singapore is in the middle in terms of impact of masculinity on the society. The society is determined by both the feminine and masculine values. Therefore, conflicts regarding the gender issues are less in the workplace. Considering the dimension of masculinity Australia is little higher and the masculine values apparently dominates the society. Therefore, in the professional context there are some gender diversities.

The country holds strong structure and high power distance index which makes the uncertainty avoidance score low in Singapore. Whereas, the company in Australia receives high uncertainty avoidance which indicates the society is ready to accept the change in the culture.

Singapore strong cultural qualities that preserve the culture and moral values of the society. In the professional context, the people are also culture oriented. On the other hand, the cultural qualities and bond is not as stronger as Singapore and values the change in the contemporary society.   

For sustaining in the new international context of Australia, the company needs to consider some international human resource employment policies and procedures for successful and effective staffing process. For the overseas recruitment the organization needs to recruit people from the host country in terms of maintaining organizational culture accordingly (Dowling, 2013). The staffing strategies must include proper evaluation of the candidates about the knowledge of the company and the workplace cultures of the same. On the other hand, the firm must pay necessary attention to the key legislation of the host country such as Fair Work Act 2009 for legal and ethical consideration of employment process (Fair Work Commission, 2013). It must be noted that the chosen firm also needs to ensure that the selected employees follow the ethical and legal considerations of the organization.

Considering the fact of staffing, selection is another major process after recruitment. The selection process in fact the most vital part of the staffing as this stage determines the right choice of the candidates by the management (Dowling, 2013). The company needs to follow some selection procedures and tools for ensuring the right selection of employee. The most effective selection tools are:

Collectivism vs Individualism

Face to face interview is considered to be the most effective and popular HR selection tools. For the overseas recruitment, face to face interview will help the managers of the company to have clear understanding of the candidates’ knowledge and skills (Behrend et al., 2012). This will help the management to choose the right candidate easily.

For certain there is requirement of technological, verbal, numerical, reasoning and intellectual skills. For ensuring the skills of the candidates the company needs to use the skill assessment test that will enable the same to evaluate the skills and capabilities of the employees for certain positions (Hull et al., 2013).

Screening is the initial selection tool for any staffing. The screening of the employees refers to the basic assessment of the candidates in regards to the key employment criteria. This tool is a cursory review of the candidates’ application for the certain jobs and indicates towards the assessment of the candidates upon the basic information of them.

The needs for training and development of the overseas assignees are required for achieving the long-terms and short-term goals of the organization in international market (Wilson, 2014). The training and development of the overseas staffs referred to the establishment of effective communication and maintain cross cultural relation within the workplace as well as with the home country. There are few training stages that are to be followed by the organization for effective outcomes out of the same.

The major and most important training is the cross cultural training of the employees which includes the communicational training, cross cultural knowledge development and diversity management training (Dongfeng, 2012). This training will help the management as well as the employees to interact with each other and operate the business activities successfully.

The next important training is the technical training. However, this training is intended for the employees who are lacking or have no technological knowledge. The technical training of the employees will strengthen the overseas communication and international business operation.

Strategic and functional training is another important training for the employees to cope with the organizational culture and structure along with the norms and workflow. This particular straining will help the employees to adapt the organizational culture and workflow easily.

In order to enhance the knowledge and efficiency of the overseas employees in their certain job roles the training procedures are intended towards them. The international assignees are not accustomed with the organizational culture and the business operation. The strategic and functional training will develop their knowledge and understanding of the organizational structure and culture along with the business process (Lamba & Choudhary, 2013). On the other hand, the cross cultural training of the employees will add advantages to the management of the firm to manage the workplace diversity without hazards. The training on cross cultural aspect will enable the employees to establish professional and effective relationship with each other which will lead the organization to avoid cross cultural issues in the overseas workplace (Dongfeng, 2012). At the same time, the technical training will develop the technological competency of the employees and increase their capabilities to handle business in the international market. It needs to be noted that before the training the employees are only the chosen candidates with personal and individual skills for performing the job roles. The training transforms them into employees as well their skills and capabilities into competencies (Wilson, 2014).

Masculinity vs Femininity

Remuneration is one of the primary and important factors of international human resource management that needs to be considered by the company at the highest priority. The remuneration package refers to the combination all types of expenditures and savings of the employees as well as the company for the employment as the whole (Thomas & Van der Elst, 2013). The international remuneration packages generally include basic salary, insurance, home and travel allowance, expatriate allowance, compensation and many others which varies for the different companies. For the chosen organization, the remuneration packages need to be concise, clear and attractive to the overseas employees in order to determine the employment in the new host country. The different elements of the remuneration packages that the company must consider are the salary negotiation, Foreign Service premium, cost of living adjustment, housing allowance, tax assistance, health insurance, retirement and the compensation (Tornikoski, Suutari & Festing, 2014). The importance of determining the remuneration package lies in the successful employment and international human resource management in the new host country workplace. It must be noted that the management of the company needs to remember and follow the legislation of the host country for making proper and legal remuneration packages.

Among all the elements of the remuneration package the compensation approach is important as the company is sending expatriates to the new host country for setting up the context of business (Boyd, Franco Santos & Shen, 2012). The compensation approach is intended for the expatriates. The company needs to prepare home-based balance sheet as well as the host-based balance sheet for easy compensation approach (Nazir, Shah & Zaman, 2014). The compensation approach of the employees needs to consider the challenges and risks in the host country before making the balance sheets. This approach also needs to ensure the following of key legislation and local market trends for attracting the employees. The management of the firm needs to have a thorough research in the host market for having an idea of the local compensation strategies. The acquisition and implementation of the local compensation strategies will help the management to manage the expatriates. The following balance sheet is the probable calculation of the remuneration package along with the compensation approach.

Figure 1: Probable Balance Sheet

Source: created by author

Conclusion:

Therefore, it can be concluded from the above discourse that for expanding into the international market, the chosen organization must give special attention towards the human resource management system. According to the report, the company being and Singaporean company needs to assess the international HRM trends and the Australian employment practice as it is expanding into the international context of Australia. In order to ensure proper and successful employment to the overseas expansion the company needs to follow the international HRM trends and factors. The report discusses the comparison of the two countries in terms of cultural differences through the use of Hofstede’s cultural dimension model. The report also presents the staffing procedures with different stages of recruitments and tools of selections. In addition, the report identifies the need and necessity for different training and development process of the overseas assignees along with the discussion of the impact of training on the employee development. The report concludes with the importance of considering the remuneration packages and the compensation approach for the employees and the expatriates in order to determine the sustainability of the firm in the new host country.  In addition, the report also presents a probable balance sheet for the company to understand and prepare remuneration package with the consideration of compensation approach

References:

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