Describe about the International Human resource Management for The Traditional Theories.
The traditional theories of Human resource Management suggest that HRM is a support function and not a business function because it does not generate revenue. However, in recent times the multinational organizations have realized the importance and strategic nature of Human Resource Management function. It is important that the strategies and policies around human resource management function should be linked with the overall business level strategy of organizations. In recent times, the large and multinational organizations have been practicing the HRM function in an integrated manner. In the current business environment, organizations have started to focus on the integration of HRM with Information Technology. Many functions carried out by the HR department have now been made electronic and people are becoming more comfortable to use them in interacting with the business. Technology advancements have allowed the jobs that HR has to perform to become more streamlined. The role of HRM in multinational organization is definitely working in conjunction with the company’s strategy. The objective of this essay is to analyze and discuss the importance and challenges of integrating the International HRM function and the organizational strategy for the large and multinational organizations (Nankervis, 2011). The initial research suggests that the importance of integrating HR strategies is the overall improvement in the productivity level of employees. The large and multinational organizations have realized that the productivity, innovation and commitment level of employees are the drivers of competitive advantage. Therefore, multinational organizations want to have high level of integration between HR strategies and business level strategies so that organizations can have overall productivity improvement.
The HRM function could be complicated in the multinational organizations because the HR executives of multinational firms would have to manage to employees from different cultural and backgrounds. For example, the HR policies of Microsoft cover the employees across multiple countries. The HR managers have to modify the HR strategies for different regions. Therefore, it is important that the HR strategies should derive from the business level strategies of organizations. At a high level, the multinational organizations can have the business level strategy of cost leadership of differentiation. The HR managers of multinational organizations have to manage the cross functional teams. Daft (2013) described cross-functional teams as being comprised of employees of similar rank. These employees often come from different functions of the company. One of the primary concerns when working with cross-functional teams is finding a balance and common ground to build off of between the different concerns and perspectives from each function. The most productive way to address the challenge of leading and working with cross-functional teams is to continue to reiterate that the overall goal is everyone’s responsibility and not just a particular part of the team. Also, it is important to validate the concerns and input of each functioning part of the team in an effort to not stop growth and team cohesion. The work of HR managers is particularly difficult in multinational organizations because HR managers also have to manage the team in virtual environment. Virtual teams are not necessarily more difficult to manage but they are different than managing a team that is able to meet at a specific time and physical location. The distinctions of managing these teams can be learned and implemented successfully (Lepsinger & DeRosa, 2015). The tools to enable this success are multiplying as it becomes easier to share documents in the cloud, post videos online, and set up virtual workspaces.
According to (Farnham 2010 pp3), to be effective in the competitive business world today HR professionals need to have full knowledge of the external contexts (STEEPLE) in which their company operates and the driving force behind the changes facing it. The HR professionals can have the complete knowledge of external factors only when they have a deep understanding of the overall business strategy of organization. The level of competition in an industry has an influence on a company’s ability to find qualified workers because in most cases the big companies because of their branding power or reputation need not advertise their vacancies because the candidates seeks them out, therefore the HR has to develop programs and incentives to attract new employees as well s retain key employees. For example, Deloitte an international consultancy firm assist organizations strengthen their strategic objectives by placing HR functions at the forefront of the business strategies. Deloitte has a ten-step approach divided into three categories; namely, defining human capital value; alignment of HR products and services; and value delivery (Deloitte, 2009). One of the greatest challenges of operationalizing strategy across various business functions is creating and sustaining the synergy that is needed to have an organization that function efficiently. “As companies realign the structure of the organization to be more market-oriented and responsive to changing customer requirements and competitive conditions, there is a greater need to share information across functional groups and organizational boundaries” (Hunt & Speh. 2007). Challenges can change depending on the circumstance. When the strategy is well received and individuals see benefits for not only the organization but for them, change can be welcomed and implemented rather quickly.
It would be correct to say that HR mangers should change the focus of Human Resource Management function from a reactive function to a proactive function. The greatest challenge of operationalizing strategy across various business functions are convincing employees that change is needed. “Change” for most isn’t an easy task. The challenge is convincing people to change when they feel that there is no change needed. Basically it’s about the art of persuasion. So appealing to the heart is the best way to implement change (Fujimoto, 2007). The most challenging part of implementing and integrated human resource management strategy is the human aspect. How workers will accept their role, how they will evolve, how to keep the organization balanced with a healthy work environment and productivity. People are resistant to change and strong leaders with a good vision and communication skills are needed to lead effectively.
The greatest challenge of operationalizing and an integrated HRM strategy across business functions is execution. Managers can guide their teams towards the strategic plan, but most of the time provides little leadership or feedback on how to get there (Mathews, 2016). Thus, without effective leadership, the strategic plan will fail (Daft, 2013). Ways in which to effectively operationalize strategy across business functions can be achieved in the following ways:
Planning- Identify key areas of the business that need to be tackled. Strategic initiatives should focus on products/services for profitability and sustaining growth (Mathews, 2016).
Transform strategy into tactical- Effective business plans target key areas that will steer the organization in the direction it wants to go and contains the tactical steps on how to achieve the goal. Unfortunately, this is where things can get muddled and companies fail to produce (Mathews, 2016). A successful business plan will identify which strategies will result in profitability, identify who will be responsible, which departments will execute on the plan and how to get there (Mathews, 2016).
Team Approach- Successful strategic plans are well communicated throughout cross-functional teams. Although most strategic planning is done at a senior level, heads of different departments are accountable for communicating the plan throughout their teams and establishing steps on how to achieve the goals.
Establish benchmarks- Establishing benchmarks and timetables assists with ensuring the strategic plan is carried out and communicating often is key to success (Mathews, 2016). Benchmarks helps to transform the goal into small steps that are achievable in everyday tasks.
Monitoring progress- Strategic plans can be overwhelming at best when looked at in its entirety. By breaking down the strategic plan into manageable steps, can help people stay focused and on target. The tactical execution should be communicated often, celebrating milestones when benchmarks are met along the way to help keep people motivated and working towards the strategic goal.
Although challenging, the leader still has a responsibility to honor stakeholders concerns even though emotions are tied to feeling of change. They just have to figure out the most strategic way to implement changes that will be the most effective way, otherwise they will fail. They must understand that in order to grow, you must respond to the needs of your employees, otherwise they are less likely to be as productive. Also, there will some resistance. Whenever there is change, there are people who are going to be resistant. Most people understand that in order to improve, there must be change, however there are always a small group of people that are resistant to change because they don’t do well with a changing system (Corbridge, 2010). The most important thing is to have structure, and include you’re employees in so that they will feel part of the process. Once you have the majority of employees accepting changes in the system, then others will likely follow. It would be correct to say that the organizational leaders should be able to implement the HRM strategies in an effective manner.
According to Daft (2016) there is no value in the most creative HRM strategy if it cannot be translated into action. Implementing IHRM strategy is the most important, but also the most difficult part of strategy. The greatest challenge is related to the inability of people to adopt new behaviors. Dekhane (2014) stated that several studies have confirmed that poor strategy implementation is the number one reason strategies are not successful and that less than 10% of all business strategies are effectively implemented. This emphasizes the point that the poor output of the strategy may well be a result of the poor implementation, and not necessarily the strategy itself. There are many factors that make operationalizing IHRM strategy difficult. First and foremost, change involves people, and many different kinds of people with different values, goals and fears. Attempting to create anything new will always be difficult because someone will be negatively affected by the change, or will perceive a negative threat. Resistance will look different depending on the situation, what change is being affected and who will be affected. Leaders must be able to assess the situation and determine how to best move forward (Scott, 2012). Having a variety of plans will assist the leader in successfully implementing products or larger scale cultural changes. Understanding the reason or the resistance will help determine which implementation plan would be most useful. Successful change and innovation also requires a great deal of teamwork and creativity. These are two qualities that leaders should look for in new hires but something that is also fostered at the work place. To create or implement new products, training or strategies, the teams must work collaboratively and identifying roles and encouraging cross participation can foster this. The roles are inventor, champion, critic and sponsor. Daft (2013) explains that products that are successful almost always had champion, someone who believed whole-heartedly in the products and was willing to fight for it. It is important to look at all sides though to ensure a product isn’t being allocated too many resources and will be flop, so having a critic is crucial as well. The leader can do a variety of things to lessen the resistance but the challenge will always be there. For example, these five tactics can be utilized to lessen the resistance of employees by educating/training, brining them in a participatory nature, negotiating, using cohesion (only in emergency situations) and obtaining top management support (Daft, 2013).
Communication is essential and even though all the details may not be available from the get go, there remains the ability to enlighten people as to the reasoning behind why there are plans in the works and how those plans will impact not only the organization, but also how they will impact the individuals involved (Holland, 2006). By including members from numerous departments during the early stages, will be invaluable in getting their input on issues. By developing surveys, focus groups, town hall meetings, all members of an organization can feel involved and meaningful in the process. These shows that they are valued members, and that their thoughts and contributions matter.
References
Deliotte (2009) Creating value through HR: HR Strategy Sweden. [Accessed on the 08th September, 2015]https://www2.deloitte.com/content/dam/Deloitte/de/Documents/human-capital/creating-value-through-hr.pdf
Farnham D., 2010. Human resources management in context. 3rd ed.
Hutt, M. D., & Speh, T. s. (2007). Undergraduate Education: The Implications of Cross-Functional Relationship in Business Marketing-The Skills of High-Performing Managers. Journal Of Business-To-Business Marketing, 14(1), 75-94. doi:10.1300/J033v14n01̱08
Hartel, C.E.J., Fujimoto, Y., Strybosch, V.E., & Fitzpatrick, K (2007). Human Resource Management Transforming Theory into Innovative Practice. Australia: Pearson
Nankervis, A, Compton, R & Baird, M (2011), Human resource management: Strategies & processes, 7th edn, Thomson,Victoria.
Pilbeam, S. & Corbridge, M. (2010) People Resourcing And Talent Planning: HRM in Practice. 4th Ed. Financial Times Prentice Hall
Lepsinger, R., & DeRosa, D. (2015). How to Lead an Effective Virtual Team. Ivey Business Journal, 2-6.
Mathews, J. (2016). Operationalizing Your Strategic Plan. Retrieved from https://graycatenterprises.com/operationalizing-strategic-plan/
Murphy, M. (2016). The Tug of War Between CHANGE & RESISTANCE. Educational Leadership, 73(9), 66.
Scott, A. (2012) “Don’t Confuse Passion with Competence” Hardvard Business Review https://hbr.org/2012/02/dont-confuse-passion-with-comp/ (Accessed 09 August 2016)
Teicher, J., Holland, P., and Gough. R. (Eds.), (2006). Employee Relations Management, Second Edition. Frenchs Forest, NSW: Prentice-Hall.
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