Discuss about the Strategy Deployment in Business Units.
Many organizations around the world have expanded their business in different countries. As such those countries have their own working culture and types of employees who are native to that place and are different in culture and behavior (Huang et al. 2017). To manage the work which will be done in offices of foreign countries there is a need to train and staff those offices according to the working environment in that particular country. It forms the most key component of the management of human resource on the international level determines the success and failure of the organization in international business. The main function of an organization in this perspective is to hire, train and prepare their employees and to compensate them with programs of performance management (Huang et al. 2017).
A few years back, expanding the company to global level was considered to be a luxury which very few companies could afford due to their nature of the business or due to their strong balance sheet. But in today’s world going global has become a need for any company to survive because depending upon the market opportunities of any one country may prove to be problematic in the long run. There are many risks in doing business in just one economic scenario which makes the business dependent on the local economic environment. With the passage of time, any business done on local level gets threatened by competition. These factors have laid a path of globalizing the business for major players in the market and has proved to be beneficial for many.
With the development of technology especially in the field of communication and information managing business in another country has become easier. These innovations have brought a revolutionary trend in the trade market as every company capable of expanding its business is now game for establishing an office or two in the foreign countries. But when this expansion or migration happens there comes a need for hiring, training and maintaining staff which is done by human resource managers by formulating human resource policies. The following business report contains the nitty-gritty of the importance of efficient staffing methods adopted by a company which intends to operate its business in the foreign land (Demeter 2017). The entire process includes staffing, training and compensating workers who will perform business operations in foreign offices and their methods of managing expatriates. Factors of selection are also discussed in details.
In today’s world, top officials of all the multinational companies have realized the need and importance of an effective human resource management to stay ahead in the competitive business environment and gain profit for their business (Anand and Gray 2017). Human resource has become the key to improving business prospects in the international market and has been given more emphasis by the stakeholders. Their main focus has been on formulating policies which can help them in hiring, managing and retaining employees who are like assets to their company. This practice gives them the competitive advantage as these employees get well versed and experienced in managing global operations (Panda 2017).
There are some factors which determine the success of the international business of a company which is the level of internationalization, the global scope of a specific company and a particular choice of the organization. When a company doing business in its base country suddenly expands its business at the global level, their staff start operating in different countries with no prior experience or expertise in that dimension (Anand and Gray 2017). This creates operational hazards in the company which can be loss bearing.
Therefore, there is a need for these companies to hire such employees who are dynamic and can quickly adapt themselves in multinational environments. Need for global staffing has become prominent due to the reasons that organizations have realized the importance of hiring employees at a higher level with international exposure, hiring is more complex when it comes to international standards, the performance of expatriates and development of multicultural workforce at the global level (Panda 2017).
When it comes to global hiring, companies are keen to have different global staff types and require definite approaches and policies of hiring. There are three main categories of which the global staffs are put which are third-country nationals, host-country experts, and expatriates. A host-country expert is a citizen of the country in which the satellite office of the company is situated (Zhou 2015). An expatriate is an employee of the organization who is a citizen of the country where the company is headquartered. As the name goes a third country national is an employee who is a citizen of one country, working in another country but is employed by the company established in a third country.
Global staffing of a company depends on the factor of its internationalization stage and other factors which are determined by the four basic approaches of staffing. These approaches are ethnocentric, geo-centric, regiocentric and polycentric. Each of these staffing approaches is unique in itself and respond to different challenges and createsvariety of opportunities in the context of international operations (Elliott, Li and Ghosh 2017).
Since the company is more or less oblivious to the rules and regulations of taxation and other company laws which are prevalent in the respective country, the hiring of employees from that particular country becomes important. It is because the local citizens of any specific country have knowledge about the existing laws and regulations of their country which makes the business operations of the company hassle free (Zhou 2015). The four approaches of global staffing are discussed below.
This approach is mainly adopted by the companies to hire officials at the higher management levels in the foreign country. The company is known to put employees of the home country at senior managerial positions in the foreign office. This notion is believed that home-country issues will have more weight than the local issues and the expatriates will be inclined towards representing opinions of the home-office (Elliott, Li and Ghosh 2017). It is important to keep a leash on the operations of the foreign office from the home-office so that the business authority does not get disoriented.
Mainly, the ethnocentric approach is adopted by the companies when they are at a certain level of internationalization or tend to have strategic expansion. This approach is centered for filling key managerial positions by the employees of the parent country. When the company adopts this approach, it has been observed that home-based employees, policies and practices are considered to be superior, to the foreigners who are working in another country who is said to be second class (Marino, Aversa and Mesquita 2013). This approach is considered to be the best when a company is in its early expansion phase and needs more control and authority in its new office.
It can be justified that parent country officials know the goals and policies of the organization better than the foreigners and they design the flow of operations in their own familiar way. This approach is also used when there is an inadequate hiring of local officials who try to change the basic business operations of the company.
On the contrary of ethnocentric approach, the polycentric approach focuses on staffing employees who are local talent. According to this philosophy, a company who follows this approach tends to staff foreign offices with citizens of that particular country and hire citizens of the parent company for their home offices (Marino, Aversa and Mesquita 2013). In this approach, local citizens are given important managerial posts in the offices of their own country. It becomes the part of a multinational strategy which is adopted by the companies in their expansion phase.
It seems to be relevant as the local citizens tend to know the local business trends and culture, local competition, demands of the people and local market. This makes that foreign subsidiary almost independent in which the local managers are the key aspects (Roh et al. 2017). There are many advantages of this approach which takes the business of subsidiary office to the next level. This approach facilitates strong familiarity of operations of business with the local customs and traditions. It bypasses the problem of language barrier without a doubt which helps in accomplishing expatriate goals (Roh et al. 2017).
Staffing local people at the top positions, a company wins over the hearts and minds of the local government and people who start to believe that the company can be trusted and can prove to be beneficial in doing business with. There are some regulations in different countries about the percentage of employment of local staff which needs to be complied without which business operations will not be possible (Schlickel 2015). This approach caters to that issue with much ease.
As the name suggests, this approach is based on the notion of hiring people from regional levels. The philosophy behind this approach is that the employee which is to be hired should be “best in the region” (Sparrow, Brewster and Chong 2017). It is observed that regiocentric approach is a wider form of polycentric approach as it ranges to large regions of the world in which the managers are allowed to transit between the business modules established in different countries of the same region. It is mainly practiced in the European Union. This approach allows the mixture of host-country nationals, parent country nationals, and expatriates to be posted in any region according to the need of the business operations. This gives makes the global operations more dynamic (Sparrow, Brewster and Chong 2017).
According to (Oshri, Kotlarsky and Willcocks 2015) the regiocentric approach is becoming more popular among the multinational companies and they are changing their business operations on the guidelines of regional hiring. One of the major reason for this paradigm shift is the low cost of support services which were duplicated in other approaches. It has been observed that most of the multinational companies adopt regiocentric approach and practice their business operations in a particular region and also derive revenue from specific regions only. But there is a downside to this approach as the managers who are practicing this approach would focus and apply their talent in small regions only and will not expand their scope outside their regions of strength (Oshri, Kotlarsky and Willcocks 2015). This forfeits the entire concept of internationalization to some extent.
This approach is neutral of the place of company establishment and citizenship of an employee. It is more of a merit-based staffing approach in which the employees who are best in their job domains are placed at top managerial positions (Nguyen 2017). The company focuses on building up a robust international management team in which the employees are free to move in nearby countries. This approach is also known as the global approach as employees are hired from all around the world irrespective of their nationality in the same country as that of the host company (Nguyen 2017).
It is also termed as the “colorblind approach” as the color of the passport a manager carries does not matter to the higher management which indicates that the manager can be a parent, third or a host country national. It is the most appropriate staffing approach if a company wants to make a global operational team competent enough to handle business operation in any corner of the world (Stahl, Mendenhall and Oddou 2012). But the company also needs to keep in mind the costs of operations, the practice of global business and variations in culture.
When there are no restrictions on the nationality of employees at the time of hiring then it opens up a big pool of professionals who are experts in their respective fields and know the international business operations of different countries and are up for hiring. This proves to be the most beneficial approach in the long run for any organization. This adds to the diversity of managers of an organization (Stahl, Mendenhall and Oddou 2012).
The success and failure of international business operations of an organization depend on the selection of employees (Bumblauskas 2017). The selection process must be overseen by the experienced top management officials as the process should portray a clear picture of the nature of work and operations which will be performed in the organization and the conditions of work in which the employees will be sent (Slack, Brandon-Jones and Johnston 2017). It is the task of human resource management team to formulate a policy for hiring in which the requirement of business operations is identified. This will pinpoint the type of expertise and qualifications of employees needed for the job.
Factors of consideration at the time of recruitment of employees are the ability of an employee to get the job done, personal character and commitment towards the job, skills of communication which includes knowledge of different languages and ethical perspectives for honest working (Slack, Brandon-Jones and Johnston 2017). The opinion of the employee about different cultures existing in the world is also important for his adaptability. The cultural adjustments which the employee has to make, contain aspects such as cultural awareness, cultural adaptability, acceptance of diversity, and global experiences.
Personal characteristics of the employee should be endowed with emotional stability, tolerance of ambiguity, capacity to take risks and capability to cope with stress (Bumblauskas 2017). Some organizational requirements for getting hired are knowledge of work in an organization, technical abilities, and skills which can be used in doing the job. There should be some communication skills which are mainly concerned with the capability of language understanding, non-verbal awareness, listening and coaching and skills to resolve conflicts in the organization (Lee and Tang 2017).
Expatriates alone cannot be successful, so they need coaching and training to perform global operations. From time to time, to maintain the level of competence all employees maybe at any level of management need to be trained and upgrade their knowledge base and skillset. I case of global operations training is the most critical issue which determines the success and failure of the organization.
According to (Lee and Tang 2017) expatriates experience cross-cultural diversity which ends up in circumstances to which the employee is oblivious. No pre-departure training can vet them to handle problems which they may face in a foreign land. But to some extent, pre-departure training can give them the idea about the nature of encounters which they may face and they can prepare themselves accordingly. After going to foreign land for the purpose of work an expatriate has to maintain many relationships inside and outside the organization (Pashaei and Olhager 2017). Some of these are family relation, global and local relation, internal relation, relation with headquarter and relation with the government of host country. It is due to this reason that expatriates need to be culturally trained and instructed in linguistics to be accustomed to the day to day lifestyle of the respective country (Ito and Ikeuchi 2017).
Some people are reluctant to live in certain countries due to the climate of that country or eating habits of that person which does not allow them to survive for much longer. These restrictions should not be there if one intends to work in a multinational organization and should be employable anywhere around the world.
According to (Ernst and Viegelahn 2014) cross-cultural training of employees is both important as well as a complex philosophy. This type of training helps the expatriates a lot in getting used to the culture and customs of the host country and saves them from the cultural shock which they can experience. First of all, there is a sense of despair and anxiety in the minds of employees who leave their homeland to work in a foreign country. There are many barriers they have to overcome in a very short period of time (Miemczyk 2012).
Moreover, the difference in culture makes them feel insecure about the understanding of nature of people and customs prevalent in the host country. Cross-cultural training gives them the idea of the culture in which they are going to work so that the employees can figure out the way to adapt themselves and do not get surprised by new customs (Bills, Di Stasio and Gërxhani 2017). This training includes teachings about the values which are sacrosanct in other culture, what is the historical, political and economic stance of the other culture, how the values of the other culture can be expressed through attitudes and behaviors.
The expatriates who attend the cross-cultural training benefit a great deal from it as they learn to increase their social quotient, styles of management, structure management, planning in a strategic manner, skills of management and enhance their knowledge in the field of technology (Zachary 2013).
Conclusion
It can be concluded from the above discussion that global business operations have become a very vital part of business strategy in the recent years. There has been a change in trend when it comes to trading at the global level. Almost all the multinational companies have expanded their business units from their home country to other foreign countries keeping their subsidiary offices in important cities in the world. To run business in different parts of the world the employees should be staffed, maintained and trained in such a way that they could be competent and can bring profits to the company.
For that purpose, human resource management team has to draw some policies and adopt some staffing approaches which can help them in establishing a framework of international operations through their staffs and employees. The kind of staff which will be recruited depends mainly on the level of business a company is doing and the stage of internationalization it is in. After observing these two factors it is found that what kind of staffing approach will be appropriate to apply which can yield the best results according to the circumstances. It was observed from the above discussion that the nature of approach determines the success and failure of international operations of the company.
Finally, there are some requirements of the company which is expected from the employees to have in order to be employed and works in the global environment and they are needed to comply with those requirements for their own benefits. Before posting the employees in a foreign land and in unknown situations all multinational companies provide them training of different work aspects and vet them to adapt to unfamiliar situations. It can be summed up to say that every company who wants to expand its base from home country to the global level needs to have a robust HR team to staff, train, maintain and compensate employees for global business operations.
Reference
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