Implication of Internalization on Hr Strategy and Policy

Topics: Human resource management, Culture, Geert Hofstede Pages: 9 (2807 words) Published: March 16, 2010
1.0 Introduction
In fact, individuals from different cultures behave differently. Consequently, it affects the organisations in terms of performance and their ability to implement Human Resource Management (HRM) internationally. Certainly, national culture brings some impact on International Human Resource (IHR) policies and strategies. There are several main programmes emerging inside organisations as they globalise. For instance, they need to recruit, select, train and develop a broader set of international employees. It includes expatriates, as well as frequent international commuters, individuals sent overseas on short-term business projects, immigrants, or domestic employees dealing with customers from global markets (Sparrow, 2007).

2.0 Differences between Domestic HR and International HR
Harris et al. (2003) stated that HRM is a key to success for any companies. HRM is the activities concerned in acquiring, developing and using people in a business. Then, International Human Resource Management (IHRM) scrutinizes the approach in which organizations deal with their human resources across the different national context. Of course the international context has more complexity than domestic HRM. Besides, cultural environment, industry in which a multinational company is involved, dependence of the multinational on its home-country, and the approaches of senior management also be part of the factors that make differences between domestic and international HRM. According to Morley and Collins (2004), companies operating in different national environments are faced with a complex variety of cultural and institutional specificities that make organization in a multinational context particularly more complicated. Hence, there are several main dissimilarities between managing human resources in an international context as compared to a domestic one. For example, the HR workload is increasing when company operates in an international environment, for the reason that the HR role should engage with numerous activities that would not be required in a domestic context. It includes international taxation, international relocation and socialization, service for expatriates, host government relations and language translation services. Harvard model is a highly prescriptive framework of HRM. The analytical framework of the Harvard model consists of six basic elements, which are situational factors, stakeholder interests, HRM policy choices, HR outcomes, long-term consequences, and a feedback loop through which the outputs flow straight into the organization and to the stakeholders (refer to appendices 1). It shows the role of situational factors on stakeholder interests, and their impact on human resource policy choices that are intended to deliver a raft of predetermined human resource outcomes such as commitment, competence, congruence and cost-effectiveness. These outcomes then create long-term and sustainable benefits for individual, organization and society. It underlines several assumed long-term benefits of acting on stakeholder interests and situational factors, presuming that there is a set of predetermined and better human resource policy choices (Bratton and Gold, 2005). On the other hand, Morgan (refer to appendices 2) presents a model of IHRM having three fundamental activities like procurement, allocation and utilisation. These activities are spread over in host, home and other countries. The types of employees are also categorized into host-country nationals, parent-country nationals, and third-country nationals. Basically, IHRM involves the same activities as domestic HRM, such as procurement refers to HR planning and staffing. Nevertheless, domestic HRM is involved with employees within only one national boundary. The complexity of operating in different countries and employing different national categories of workers is a key variable that differentiates between the two approaches...

References: Bratton, J. and Gold, J. (2005) Human Resource Management (6th Ed.). London: Prentice
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Hofstede, G. (1980) Culture 's consequences: International differences in work-related values. Beverly Hills, CA: Sage.
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Pheng, L.S. and Yuquan, S. (2002) ‘An exploratory study of Hofstede’s cross-cultural dimensions in construction projects’, Journal of Management Decision, Vol. 40, No. 1, pp.7-16.
Price, A.J. (1997) Human Resource Management in a Business Context. London: Thomson Learning.
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