International Human Resource Management For GDP Growth

Organisational Design and Structure of the Overseas Subsidiary

Discuss about the International Human Resource Management for GDP Growth.

Chowdhury (2014) depicts that in recent times, every contemporary organization intends to expand their not only for expanding their customer base but also for favourable financial opportunities. The primary objective for this essay is an expansion of a Singaporean organization that is XYZ Company in Australia. Australia is chosen for business expansion because of its innovative economy that values on talent and the goal of the organization to fulfil their demands. The economic status of the concerned countries favours the business expansion of the XYZ Company. It can be proved by the GDP growth has reached to 2.7% with an average of averaged 386.58 USD Billion and the unemployment rate has reduced to 6.0% in the last year (Tradingeconomics.com, 2016) (See Appendix, Figure 1). Thus, the XYZ Company of Singapore has planned to set up business overseas for achieving the essential benefits on the international human resource management.

In this essay, the organizational design and structure of the home and the host cities will be compared along with the training and development process for the employees so that they can serve their best for the betterment of the organization. Moreover, the strategies taken by the R od the XYZ Company to retain their employee in the organization will also be discussed.

Alfes et al. (2012) have mentioned that the organisational design and structure is pivotal for the international human resource management. Hofstede dimensions of national culture include the essential values, which distinguish the country cultures. This particular framework is applicable for the cross-cultural communication. Arrowsmith and Parker (2013) depicts that with the help of this framework, an organization can easily evaluate whether their selection for the host country will be beneficial for them and help them to attain more financial growth. Bratton & Gold (2012) have suggested Hofstede dimension of national culture represent the uniqueness of every culture. This section will illustrate the cultural perspective of Singapore in comparison with Australia.

Image 1: Hofstede dimensions of Singapore in comparison to Australia

(Source: Geert-hofstede.com, 2016)

As illustrates in the above figure, the concerned framework comprise of six aspects- power distance, individualism, Masculinity, Uncertainty Avoidance, long term orientation and indulgence. Gholipour and Tajaddini (2014) define that in terms of the power distance that resembles the fact that all individuals in societies are not equal, Singapore though scores high than the Australia; will be beneficial for the XYZ Company. In Australia, both managers and employees share their knowledge. In terms of the individual, the concerned organization in Australia will be a success as in Australia hiring of people are done  based on merit or evidence of one’s ability and not by favouritism (Beugelsdijk et al., 2015). The Australian society possesses a high score in masculinity that means that there is a huge competition among the people which is a good signal for the advancement of the organization as people strive to be the best they can be for better recognition. Moreover, in terms of uncertainty avoidance, Hofstede (2013) portrays that compared to Singapore, Australia intends to take risk for incorporating new technological advances so that the business can make more profit and hence it can be said that in Australia there is a high chances for a successful business expansion for XYZ Company. Beugelsdijk et al. (2015) moreover, depicts that the long term orientation and indulgence refers to the situation of maintain time-honoured traditions and nature of people to control their desires and impulses respectively. In context of Australia, 21 on this dimension of long term orientation signifies the great respect for traditions while valuing the modern system for gaining competitive advantage in the market (Hofstede, 2013). Furthermore, comparing the score it can be said that Australia is an Indulgent country and employee here possess positive attitude and are optimistic that is a crucial trait for XYZ Company to expand their company. Thus, selecting Australia will be a beneficial decision for the company to make their business a success.

Analysis of the Staffing Process for Overseas Assignment

As opined by Clarke & Hill (2012) the staffing process such as the recruitment and selection involves effective Human Resource Planning (HRP). The selection and recruitment of efficient and potential human resources will help to achieve the organisational goals and visions in short period (Gould-Williams, 2013). In order to capture the international market of overseas competitive advantage, the management of the XYZ Company engage proper and adequate recruitment strategies not only to attract nation’s people but also to allow diverse people belonging from different culture and possess great ability to fulfil the goals of the business. The strategy of recruitment involves the direction and process of the recruitment process.

The XYZ Company at first selects the mode of selection and Geare et al. (2014) have referred that a series of steps in the hiring process from adopting the conventional process like interviews to the contemporary process like situational tests will be an effective step for hiring people from different diversity within the organization. If an organisation fails to select and recruit the potential candidate from the staffing process, then it can influence the productivity of the company and with the low productivity, an organisation may face the downturn in the sales revenue that may damage the brand image of the company. In this section, the staffing process for the XYZ Company will be discussed for the overseas assignment along with the selection tools.  

The HR department of the XYZ Company adopts the appropriate selection tool for selecting the suitable candidates through interview. Kim and Sung-Choon (2013) depicts that this is the most effective conventional method to assess the ability of communication skills of a candidates. Interview allows the HR department to evaluate whether the particular person is able to fulfil the organizational objectives. Another important selection tool is skills testing (Jose & Mampilly, 2012). This particular tool is effective for the positions that need a perfect level of competency in some software programs and the computer operations to obtain the goals of the organization within short-time and extraordinary result. On the other hand, in Australia as people values traits and skills more than the emotional traits like favoritism regarding one candidate, the HR system can follow the approach of aptitude and competency based assessments. Gonzalez-Loureiro et al. (2015) moreover depicts that situational assessment will be an effective procedure to select a candidate that also help to know the industry specific skills of the desired candidates along with their intellectual ability to solve a hectic situation with efficiency. This resembles their ability of the job competence of knowledge regarding the HQ operations, general managerial skills and administrative competence and creativity. These selection assessments also ensure the relational traits like tolerance regarding ambiguity, kindness and behavioural flexibility and ability to adopt the cultural empathy and ethnocentrism. Lastly, it can be considered that as all the procedure are performed based on the competency skills of an candidate irrespective of their different race and communal difference, more people of diverse culture will be selected for better business outcome.

Critical Evaluation of the Training and Development Process of International Assignees

According to Kehoe & Wright (2013) the training and development process help to enhance the failed interactions of the business operations in between the host and the home country. The training and development process of the XYZ Company will help the international assignees to understand the behaviour and the work practices of the host country before handling the business operations there. As opined by Kooij et al. (2013), it is the responsibility of the HR manager to conduct and plan an adequate intercultural training for the international assignees. The international assignees are also liable for developing their personal traits like congruence of assignment with interest in overseas experience along with the career path. Gonzalez-Loureiro et al. (2015) mentions that he intention behind these training is not only to develop the professional skills abut also for adopting the non-verbal; communication with the business associates. It also provides the fundamental understanding of the difference of culture in between Australia and Singapore in order to prevent the emotional challenges.

Mariappanadar (2012) has depicted that cross-cultural training (CCT) comprises of five distinct phase- identification of the kind of global assignment, determination of the specific CCT needs, establishments of the objectives for effective CCT, developing and delivering CCT programs to international assignee and evaluation of the effectiveness of the CCT program. However, the XYZ Company also arranges language training program, industry training and the leadership training for the selected employees. All of the mentioned training and development process help the employees to build a strong relationship and a bond of trust with in the Australian culture. Marescaux et al. (2012) affirms that depending on the organization requirement the training have to be provided by identifying global assignments in content of technical, functional, developmental and strategic requirement. The training and development programs reduce the basic complexity of the international business in perfect manner and enhance the skills of the employees, which will help to implement the corporate initiatives for further success of the organisation across the world. ?ahin et al. (2014) in addition to that depict that the HR is responsible for determining to provide pre-program assessment and exploration so that expatriate can utilizes the cultural intelligence tools, such as “Culture Wise” to adopt the change in Australian field. The objectives for effective CCT program can be decoded by the successful hosting of project alignment meeting, either in person or via telephone or videoconference. This ensures the technological advancement of the organization and the development of the international assignee at the same time. Moreover, ?ahin et al. (2014) stated that arranging short-term CCT training will bring more cognitive, affective behavioural change in a candidate of different cultural background. CCT assessment for evaluating the exact development and shot exams on cultural importance aligned with the organizational goals will be beneficial for delivering the effective CCT programs. Lastly, the effectiveness of these training can be evaluated though outcomes of these assessment and the progress in the job performance.

Contemporary organization values the desire of an individual to stay in their home country and thus they offer a remuneration package to their international assignees to ensure employee engagement. According to Need (2012), there are proper and relevant terms and conditions for the remuneration package of the international assignees of the XYZ Company. There are cost differential allowances for them in order to maintain the present standard of living in Australian field. However, the XYZ Company offer adequate salary for managing the utility expenditure, health insurance, retirement plan, spouse assistance, child care facility and tax assistance to the employees.

According to Mitchell et al. (2013) the balance sheet approach involves a process of limited audit, which only evaluates and examines the basic accounts on the balance sheet of the concerned company. With engaging the balance sheet approach for the remuneration of the international assignees, the XYZ Company checks the correct recordation of the existence of the employees, values off the liabilities and assets of the company. Mariappanadar (2013) has contradicted that the balance sheet approach is completely different from the transaction approach, which particularly measures the net income. On the other hand, the balance sheet approach of the XYZ Company includes basic allowances for the international assignees. These basic allowances involve the housing allowance, car allowance, cost of living allowance, hardship allowance, agreement salary and the housing deduction. It is noteworthy to mention here that, all of these mentioned allowances are provided before tax. Even the balance sheet approach of the XYZ Company deals with the present, before and after remuneration package of the employees.

Items for the international Assignees	Before (SGD)	During (SGD)	After (SGD)
Basic allowance	20,000	20,000	20,000
Car allowance (12%)		2,400
Housing allowance (23%)		4,600
Hardship allowance (16%)		3,200
Agreement salary (12%)			2,400
Cost of living allowance (23%)		4,600
Housing deduction (-8%)		-1,600
Total (before tax)	20,000	33,200	22,400

Table 1: The balance sheet approach of XYZ Company

(Source: Created by the author)

Conclusion

It is concluded form the discussion that Australia has a favourable economy to expand a business as people rely on modern development to accomplish organizational objectives. This kind of workplace plays an important role of the decision making for the HR to attract not only the nation’s people but also diverse people from different cultural background and encourage them to utilize their skills for the betterment of the organization. Effective recruitment strategies like interview, skills test and aptitude test allows the XYZ Company to select effective employees. Moreover, international human resource management involves the adequate policies, rules, guidelines, code of conducts and the procedures in order to conduct the international business across the world. The HR department of the XYZ Company decided to provide effective strategies in order to conduct its business operations in Australian market. Moreover, to ensure the employee engagement with the organization, the concerned company also offered remuneration plan and cross-cultural training to the employee for gaining better understanding of the host country and ways to adjust in the new environment. These training thus not only ensure employee’s engagement but also ensure the success of the business expansion in the host country.

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