Contemporary Case Studies in HRM Report

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Contemporary Case Studies in HRM

IHRM – theory, practice and contemporary issues

Learning Objectives

  • Develop a broad understanding of the scope of IHRM
  • Have a critical understanding of the differences between IHRM and HRM
  • Build an awareness of the complexities of delivering HRM in an International context

IHRM – a definition

“IHRM has been defined as the HRM issues and problems arising from the internationalization of business and the HRM strategies, policies and practices which firms pursue in response to the internationalization of business.” (Scullion and Linehan, 1995:4)

Schuler and Tarique (2007) views of IHRM

  • The field of IHRM is about understanding, researching, applying and revising all human resource activities in their internal and external contexts as they impact the process of managing human resources in organisations throughout the global environment to enhance the experience of multiple stakeholders.

Is IHRM any different to HRM?

No consensus on this, but ...

  • provides opportunities to challenge universalist principles of HRM (Hollingshead and Leat, 1995)

  • studying IHRM provides more insights into management practices in general (Evans et al. (2002) in Scullion & Lineham, 2005)

  • IHRM involves more work for HR function – more than just the management of expatriates - relocation and socialisation, international taxation rules, language training, local employment and government regulations (Morley and Collings (2004)

Reasons IHRM has emerged as a separate field of investigation

Rapid growth of internationalization and global competition

Rise in number of SMEs (micro-multinationals) operating Internationally – with lack of general HRM expertise

HRM – considered major determinant of success/failure in International businesses

Transfer and integration of knowledge across borders – key source of competitive advantage

Organisational learning – key strategic importance in International firms

Concerns with strategic alliances with and cross-border merges and acquisitions

Issues relating to how to Internationalize the HRM function- transferability of policies across countries

(see Scullion and Linehan, 2005: 8-9)

Scope of IHRM research

Term IHRM misleading – implies one body of knowledge

In practice three key areas of focus:

  • Expatriate management

  • HRM in multi-national organisations

  • HRM in different national contexts

Ref: Brewster et al. (2004: 439)

Universalism vs contextualism

  • Universalist paradigm – dominant in USA:
  • aim – improving the management of human resources to enhance organizational performance
  • unquestioned consensus around what constitutes ‘good’, ‘best practice’, or ‘leading edge’ HRM – resulting in similar HRM practices adopted across firms
  • issue – these lists of best practice derived from a small number of case examples – which do not reflect reality of practice in other country contexts

Ref: Brewster et al. (2011: 72-74)

Convergence/divergence debate

  • As businesses become more global, HRM becomes more uniform?
  • Arguments for convergence
  • Industrialisation
  • Transaction cost economics
  • Arguments for divergence
  • HRM reflects national institutional context
  • HRM polices – influenced by state, regulatory structures and public opinion/norms

Ref: Brewster et al (2004)

Summary of convergence vs divergence

Convergence Divergence
World becoming increasingly global – thus all aspects of management, including HRM, increasingky more alike Each country has its own unique approach to management and HRM
To compete all companies will adopt most efficient management and HRM practices – drive for ‘best practice’ USA is ‘untypical’ – as more autonomous and independent – other countries influenced by state, legislation, role of trade unions
Predominant thinking – universalist Predominant thinking – contextualist

Increasing tendency towards ‘best practice’ – high involvement, or high-commitment work systems

  • Assumption that high involvement/high commitment work practices result in enhanced business performance – irrespective of national boundaries
  • Fits more with assumptions that “... comparative variations generally express enduring characteristics of the context of employment and work” (Brewster et al. (2011: 132)

Increasing tendency towards ‘best practice’ HRM? contd.

  • Research by Gamble et al. (2004) suggests a different picture
  • Their research based on Comparison of HRM practices of Eastern Asia MNCs (Japan, Korea, Taiwan and Honk Kong) in affiliate operations in China and Malaysia
  • Sophistication of practices – seems limited by host-country institutional HRM capacity – result is use of Taylorist work organization and low-trust, low-investment, HRM practices
  • Japanese and Korean Expatriate managers tightly controlled the work regime in affiliate operations in China - simple and fragmented HRM practices
  • Recruitment and selection basic, training limited, communications top-down.

Functional differences, HRM vs IHRM (Hollingshead, 2010: 6)

HRM core function International complexity
HR planning: anticipating and mapping staffing needs with anticipated business needs HR Planning: map labour market trends and skills availability in host country (i.e. Subsidiary), issues with labour mobility between parent and subsidiary
Recruitment: use of local/national staffing, as well as integrating recruitment, selection and induction Recruitment: understanding educational and training qualifications in host countries, selecting expatriates
Training and development: recognition of shifting emphasis on ‘hard’ technical vs ‘soft’ competencies and implications for T&D Training and development: identifying institutional framework in host national countries. Preparing individuals for expatriate assignments e.g. intercultural working and communication
Employee involvement: legal framework for employee consultation, management philosophy regarding information sharing and involvement in decision making Employee involvement: concerns over what/how to adapt consultative procedures to reflect country context – USA (non-unionism), Germany (influence of works councils)

Generic global challenges (Roper et al. 2010:361-373)

  • International movement of labour – resulting in greater employee diversity
  • Rise of precarious, or non-standard work
  • Work intensification and implications for work-life-balance
  • Particular tensions amongst younger workers
  • Advancement on imbalanced lifestyle – likely to lead to talent shortages
  • Korea – economic prosperity not translating into individual prosperity, or choice over W-L-B

HRM resourcing strategies in MNCs

Ethnocentric Polycentric Geocentric
Same strategies employed in all countries HRM de-centralized HRM managed on a global basis
Head Office has high degree of authority Decision making devolved Harmonisation of HRM but responsive to local needs
Mangers recruited and developed in home country Local managers trained Development of best person
Ref: Beardwell et al (2004: 616)

International recruitment – institutional effects

  • Role of HRM can be limited by social, cultural and institutional effects
  • Kuwait: Hiring influenced by social connectivity, tribal identity and political allegiance – ‘wasta’ effect – intervention of influential people
  • Dubai: UAE government ‘Emiratisation’ policy – priority given to local employment, as opposed to expatriates, through quota system, even though local nationals lack the skills that businesses need.
  • Influx of cheap skilled labour from emerging economies – presented challenges to the government policy – made these uneconomic.

Ref: Brewster et al. (2011: 181)

Case: Engagement and Talent Management in Hong Kong (Hayton et al., 2012)

  • Context: US–based business - expanded into the Asia Pacific region
  • Organization has a strong service-orientated culture – this informs, the recruitment, selection and induction practices
  • Issue – although policies exist to engage employees, there is a lack of consistency in the execution of these policies
  • Managers seem to have a different perspective on the role of HRM - HRM seen as an Administrative function
  • Rolling out the strategic talent management programme designed in the US a challenge for the HR team in Hong Kong

Case Scenario 2 – International Expansion in a gaming software development company

  • Rapid expansion
  • Gender imbalance
  • Attraction and retention
  • Fear of expatriate failure

References

Brewster, C., Sparrow, P., Vernon, G. And Houldsworth, E. (2011) International Human Resource Management. London: CIPD.

Brewster, C., W. Mayrhofer and M. Morley (2004), Human Resource Management in Europe. Evidence of Convergence?, Oxford: Elsevier Butterworth-Heinemann.

Gamble, J., Morris, J. And Wilkinson, B. (2004) Mass production is alive and well: the future of work and organization in east Asia. International Journal of Human Resource Management, 15:2, March 2004, 397-409.

Hollingshead, G. and M.Leat (1995), HRM – An International and Comparative Perspective, London: Financial Times.

Kramer, R. and Syed, J. (2012) Human resource management in a global context. Hampshire, Palgrave Macmillan.

Monks, K., H, Scullion and J. Creaner (2001), HRM in international firms. Evidence from Ireland. Personnel review, Vol. 30, No.5, 2001, pp536-553.

Morley, M.J. and D.G. Collings (2004), Contemporary debates and new directions in MNCs: introduction. International Journal of Manpower, Vol.25 No.6, pp487-499.

Scullion, H. and M. Linehan (2005), International Human Resource Management, Basingstoke: Palgrave Macmillan.