Essay on Global Companies

Topics: Human resource management, Management, Expatriate Pages: 8 (2480 words) Published: May 15, 2013

International companies are characterized by many factors among them geographical dispersion, demand for rationalization and differentiation and cultural diversity. These factors pose numerous challenges to international HR managers on how to ensure successful performance of their functions. The paper highlights various challenges the mentioned factors presents to IHRM in their work. It assembles evidence and previous research findings done by other writers. The paper also demonstrates why managing international HR is more difficult than managing HR in a large domestic firm.

Challenges presented by geographical dispersion to international HR directors As employees in an international company come from different backgrounds and possess diverse experience, it’s hard to standardize pay and conditions of work (Briscoe & Schuler, 2009). Doing so is likely to bring conflicts among staff doing similar jobs in different locations. Standardizing working conditions is also tricky because of diverse cultures, rules and laws of different nations. Home working conditions and policies cannot be transferred to another country due to existence of different legislations in host country. In such a case each host country could have a slightly different working condition (Paik and Vance, 2006). Due also to natural differences in each country, it is hard to standardize business processes and pay in a multinational company. One of challenges faced by international HR managers is dealing with multiple time zones. This time differences bring about difficulties for managers to consult with key decision makers (Herod and Yearn, 2002). These difficulties may result into ramifications on productivity. Closely associated with this problem is the continued heavy reliance on face to face communications since improvement in technologies has not completely bridged this gap (Punnett, 1989). Rolling out a non conflicting international compensation system is a challenge to international HRM. This is due to the fact that conditions of employment differ among various categories of employees (Mendenhall et al, 1987). In addition, there exist variations among countries on ways of compensating workers. Salary levels for the same job also differ amongst countries. As a matter of fact compensation packages can be a source of conflict .This is mostly occurs when local employees start comparing their salary to those of expatriates and may conclude that there is no fairness. Expatriates in most of cases have better compensation packages than local employees doing the same job. As a result local employees may feel unappreciated and treated unfairly. Consequently, it may result to resentment and eventually lower employees’ morale and productivity (Roberts et al, 1998). The process of hiring and placement of different national categories of workers is very complex in global context. International HRM involves movement of people across international boundaries (Briscoe & Schuler, 2009). In such a case staffing becomes very hard as managers face hard choices to make from three pools of employees categories: employees from host country where the company operates (HCN), nationals from home country where the firm has headquarter (PNC) and citizens of other countries that may be sources of labor (TNC).The three types of employee groups have different backgrounds. This therefore requires the managers to have international mindset and adopt policies that facilitate establishment of internationally oriented staff (Briscoe & Schuler, 2009). Distinct countries have different government policies and ethical requirements which can pose problems to international HR managers. For instance an international company situated in South Africa would have expatriates willing to work there required to undergo a compulsory HIV/AIDS test. This could result to loss of talented employees who may not be willing to comply with the requirement....
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