NEED IN 6 HOURS! - 300-words total - Business Management Course
Chapter 13: International HRD (IHRD)
DR. DAVID MCGUIRE EDINBURGH NAPIER UNIVERSITY
Chapter Objectives
Investigate the effect of culture on the character of HRD
Examine the cultural boundedness of HRD theory and practice
Present a framework looking at the internationalisation process for organisations
Identify the HRD opportunities that arise through the internationalisation process.
Chapter Context In cost competitive markets, the standardisation of HRD practices across overseas operations has the potential for producing significant financial and human capital savings, improving productivity and streamlining operational procedures. The increasing use and application of e‐learning and computer based training have resulted in the delivery of HRD solutions that are timely, current and immediately accessible worldwide National culture remains an important factor driving behaviour and resistant to standardisation efforts. HRD has a dual role to play: ◦ Developing economic and social wellbeing in less advanced nations ◦ leveraging value from human capital in international locations
Need for Care in International HRD Research
Our ability to conduct international HRD research that produces useful results depends not so much on our choice of methodologies, but on our ability to incorporate in our investigation culture as a major influencing factor and to account for culture’s influence on phenomena under investigation. And to do this, we need a better understanding of our own and others’ centrally conditioned perspectives and assumptions.
Ardichvilli and Kuchinke (2002)
Challenge Facing International HRD
Need to recognise HRD professionals as ‘learning architects’ and to construct viable international HRD frameworks which showcase the capacity of HRD to add value to the organisation across different cultures
The discipline of HRD needs to develop to accommodate the extensive amount of cross‐national work being done by transnational corporations, transnational nongovernment organisations and transnational political entities
An International HRD Framework
Effective communication with culturally diverse individuals and groups requires an understanding of both cultural assumptions and differences
Much attention has been devoted to the training provided to expatriates and those pursuing short‐term overseas assignments as well as the long‐ standing cultural convergence/divergence debate on management practices
Iles and Yolles (2003) identify international HRD alliances as an increasingly popular resource‐efficient means of securing knowledge transfer and diffusion across national boundaries. They argue that alliances may provide organisations with rapid market entry and access to resources in the host country.
The Multi-Domestic Organisation
The multi‐domestic organisation is characterised by a local approach to business and employee issues. Each subsidiary is treated as a distinct autonomous entity and possesses a high degree of flexibility enabling it to respond quickly to changing market conditions and national requirements
Firms operating within a multi‐domestic structure are equipped to respond flexibly and quickly to changing local conditions. Consequently, the firm is highly exposed to local cultural, political and economic factors.
The principal advantage of a multi‐domestic approach as one of being local worldwide, allowing for increased decentralisation, local accountability and increased transparency.
The Multi-Domestic Organisation (Con’t)
A multi‐domestic approach embraces local values and customs and operates according to nationally recognised rules and procedures. Experience in other cultures is not valued as firms adopting this strategy emphasise local knowledge and standards
Firms operating multi‐domestic approaches compete in independent domestic markets and consequently this requires an indigenous workforce that understands and is responsive to local market conditions. This suggests that there may be considerable geographic differentiation of HRD practices and activities. The key goal is to develop managers and employees in sensing and exploiting local opportunities using region‐specific and non‐ transferable knowledge.
The International Organisation The international organisation adopts a market orientation and is characterised by a drive for increased growth, efficiency and market penetration. The international organisation operates under a headquarters and multiple subsidiary model with a high level of centralised control. Operating a number of subsidiaries allows an organisation to have a presence in a number of international markets and gain from cost benefits derived through standardised learning and development programmes and the harmonisation of organisational processes and procedures. The international firm creates value by the transfer and leveraging of core competencies and resources from headquarters to the subsidiary.
The International Organisation
In the early stages of internationalisation, many managers tend to view the overseas subsidiary as a distant outpost whose role is to support the domestic parent company through contributing incremental sales and upholding the company’s revenue stream. The search for new markets, resources and cheap labour as key factors motivating overseas and international expansion. The political culture of the firm’s home country will exercise a strong effect on the firm’s internationalisation strategy Due to the emphasis on centralised control by headquarters, the overseas subsidiary will have limited autonomy in relation to HRD matters. Responsibility for HRD matters will normally be devolved for operational matters but most strategic decisions will be taken by management in the home country.
The Multinational Organisation
The multinational organisation has a significant presence in overseas environments and leverages opportunities from different geographical markets. The multinational organisation is one which engages in foreign direct investment and owns or controls value‐ adding activities in more than one country. Overseas subsidiaries possess a high degree of flexibility and are sensitive and responsive to changes in local conditions.
A multinational organisation is a complex organisational form which usually has fully autonomous units operating in a number of countries which possess a great deal of independence to address local issues such as consumer preferences, political pressures and economic trends.
The Multinational Organisation
One of the criticisms of the multinational form of overseas management is the lack of coordination and control exercised by head office.
Negotiating common cultural meanings is a difficult challenge for multinational organisations. The complexity of multinational organisations increases the probability that their culture tends to differentiation and that different systems of meanings or subcultures can greatly affect the operations of these organisations.
Responsibility for HRD issues is a contentious one with some firms resistant to transferring HRD responsibility to the local subsidiary, whilst other firms favouring the advantages of devolving responsibility for HRD locally.
The Transnational Organisation The transnational organisation has been recognised as the highest form of business Internationalisation. Rugman (2005) argues that of the world’s largest 500 multinationals, only a handful – nine – operate a truly global or transnational strategy. Iles and Hayers (1997) define transnational organisations as ones which successfully transcend cultural, geographic and managerial barriers in achieving organisational effectiveness.
Transnational organisations are structured to provide autonomy and flexibility to subsidiaries to allow them to respond to local opportunities. Transnational organisations are pluri‐located, integrated communities that focus on a network of competencies across the world.
The Transnational Organisation
Transnational organisations recognise the demands to be responsive to local market and political needs and the pressures to develop global‐scale competitive efficiency, and consequently can react well to political and economic volatility Transnational organisations fluctuate between a centralised and decentralised organisational structure. Transnational organisations operate in multicultural environments, but seek to move beyond cultural boundaries in their business activities The management and coordination of HR activities across the transnational organisation is decidedly complex and involves balancing a series of competing priorities (geographic, business and functional).
Conclusion An organisation’s international HRD approach is contingent on the stage that the organisation has reached in the internationalisation process. It indicates that the more international experience an organisation attains, the greater the devolvement of control to management of the overseas subsidiary
The type of structure adopted by the organisation during the internationalisation process will affect the product and service delivery as well as the degree of autonomy exercised by the subsidiary.
Responsibility for HRD activities operates on a continuum from full ownership by headquarters to complete devolvement to the subsidiary organisation
Discussion Questions What are the key obstacles faced by the HRD function in ‘exporting’ HRD programmes to overseas subsidiaries?
Should organisations be seeking to impose a single culture across all these global business units?
What types of cost‐efficiencies can be derived from cross‐cultural standardisation?
What key facets should an internationalisation strategy possess?