One of the great themes in international business over the last three decades has been globalisation (Daniels et al., 2007). In truth, globalisation has been a process which has been going on, to a great or lesser extent, for the past several hundred years. However, over the last three decades there has been acceleration in globalisation due to a number of factors that converged in a ‘perfect storm’. Thus, with new technologies, it has become easier to manage operations and communications with subsidiary businesses overseas; cheap travel makes movement of people seamless; the liberalisation of markets, the emergence of powerful international organisations such as the World Trade Organisation and the collapse of communism has driven greater economic integration and development; etc (Daniels et al., 2007; Fukuyama, 1993).
Many large businesses see the benefits of globalisation as including the opportunity to access new markets in order to sell their products. However, they also see these new markets as often providing motivated but comparatively inexpensive workforces that can manage significant parts of the manufacturing function of these businesses. Thus, the phenomena of out-sourcing and off-shoring have become well established in discourses concerning globalisation (Daniels et al. 2007). The former refers to business engaging other business to manage aspects of their supply chain. This can be done in the same country, or one similar, and so there are no benefits except in streamlining the operations of the business but in the context of this paper we refer to it in regards to businesses engaging businesses in lesser economically developed countries (LEDCs) to manage aspects of the supply chain because of the cost savings involved. Following rapid globalization within the business sector, workforce and clientele are becoming extremely multicultural and diverse. This calls for effective management of the global workforce, thus, increasing the pressure mounted on Human managers. The HR managers must therefore recognize to emulate cultural differences that are crucial in management of the cross-cultural misunderstandings. In fact, as business economies undergo through immense of growth, Human Resource Management must accept the challenge of managing cross-border relationships.
This might seem ideal but it is the case that many problems have emerged with these activities over the last several years and many of these problems are in relation to human resource management (Daniels et al., 2007; Tayeb, 2005). Much research has been undertaken into this area and broad conclusions have ben drawn. This paper addresses this issue freshly with the intention to provide some novel insights and recommendations. Given the relevance of this topic to businesses that are trying to internationalise, this is a worthy and relevant area within the topic of human resource management to investigate. In addressing this issue, the paper will refer to appropriate theoretical models and frameworks, where appropriate.
Analysis and discussion
Over the past few decades there has been a growing literature that recognises the problems with the ‘international manager’ (Brewster et al., 2007; Tayeb, 2005). Such a HR manager is someone from the home country of the business who is sent to manage the subsidiary business overseas/in a different country (Brewster et al., 2007; Tayeb, 2005). The problems encountered are generally in relation to culture shock and an inability for the manager to adapt to the cultural setting they are in (Brewster et al., 2007; Tayeb, 2005). This reveals itself in many ways but other problems also emerge when, for example, the family of the manager struggle to adapt (Brewster et al., 2007; Tayeb, 2005). It is also the case that such HR managers are often high flyers who see these appointments as short to medium term stepping stones before they return to the parent country and resume their progress up the corporate ladder (Brewster et al., 2007; Tayeb, 2005). Such overseas experience is seen as a necessary experience to have but it seems that some of these managers perceive these appointments as temporary and incidental. Thus, sub-consciously, these Human Resource managers might lack the commitment they would otherwise have to a new appointment.
It is important to state the essential HRM problem identified here concerns managing cultural difference and, as such, it is important to cite some definitions of culture and the ‘dimensions’ of difference just so as to elucidate the problems at hand. To Handy (1995: p.181), culture “conveys more of the feeling of a pervasive way of life, or set of norms. In institutions there are deep-set beliefs about the way work should be organized, the way authority should be exercised, people rewarded, people controlled.” Geert Hofstede (1991: p.5), who was/is a seminal writer on the topic, states that culture is “the collective programming of the mind which distinguishes the members of one group or category of people from another.” He notes that culture is not in the gift of the individual but to the group that they are a part of.
While the above refers to national culture it is also noteworthy that organisations develop their own culture and though it is heavily informed by national culture it often has distinct qualities which can be informed by the sector the business is in, the qualities of the leader, etc. Thus, West (1997: p.77) cites Slocum’s (1995) definition of culture “as the basic, taken-for-granted assumptions and deep patterns of meaning shared by institutional participation and manifestations of these assumptions.” West (1997: p.77) considers that “institutional culture has major constraining or facilitating effects on the successful implementation and maintenance of innovation within institutions.” Finally, but noteworthy, is the succinct and well known definition of culture offered by Drennan (1992: p.3) as being “how things are done around here.”
Hofstede (1991) notes the myriad ways in which national culture impacts the institution and this gives us an insight into why the ‘international manager’ confronts so many problems. Thus, he identifies the layers of culture-based mental programming people face: national; regional/ethnic/religious; gender; generational; social class; institutional or corporate; and so forth. This notion by Hofstede provides the HR manager with numerous avenues that assist in making international business successful.
For instance a company like Apple has a strategic positioning that is described as positioning the firm or a brand in the industry to make it competitive. Strategic positioning is critical given that the industry is always changing and therefore it is critical to ensure that it is not affected. Apple is one company that has been able to position its brand as one that leads in technology in both computers and smart phones. The Human Resource Department of Apple focuses on helping the company position its products as easy to use where it changed from marketing computers to artistic people into developers of iPad, iphone and iTunes. Due to strategic position, Apple Inc has been able to stand out among other technology-based companies such as Sony, Blackberry and Dell among others.
A company such as Apple may rely on various strategies to maximize on the profit made. One of these strategies is to cut down on its operation expenses as this makes the cost of the production low and therefore the price of product may be set higher. The other strategy that may be used to maximize profit by Apple Company is to increase the number of sales as higher sales means that the company is able to benefit from economies of scale. This has been witnessed following numerous instances that HR manager emphasize that increase of sales can be enhanced through promotion, advertisement and after sales service. Lastly, the company may rely on forming relationships with customers to ensure that it maintains customer loyalty that translates to a higher customer base.
The variety of problems that the international manager faces are numerous and include, for instance, a lack of language skills which has the effect of creating barriers with many in the local organisation. The barrier to good, efficient, and direct communication with other stakeholder groups – especially employees – is very damaging as it can be isolating and frustrating for the manager. The failure to recognise how to appropriately interact with local people causes immense problems: such as whether to shale the hands of females in Muslim countries, bowing, looking into someone’s eyes for too long etc.
It is the case that approaches that work well in the home country may be ineffective in the country of the subsidiary business such as the selection and recruitment process where testing of potential candidates is routine in the United States but can but problematic to implement in, for instance, China (Bjorkman and Lu, 1999). Other practical problems include the lack of access that such a manager has to local networks (Sumelius et al., 2008). Thus, they cannot adequately work through the maze of local regulatory and political structures, and do not know how to properly make important relationships with officials and others who can have an influence on the success of the local business (Sumelius et al., 2008). The manager struggles to know how to properly access local services such as recruitment, advertising, etc and, importantly, how to build relationships with other businesses that can assist in the distribution of the business’s products locally.
Tayeb (2005: p.115) writes that “that the mindset of managers should have a global framework balancing the needs between local responsiveness and a global vision of the firm.” Thus, a growing trend in businesses internationalising their operations and, therefore, an emergent theme in literature on international human resource management concerns ‘localisation’. Simply put, this means avoiding the deployment of managers from the parent country and, instead, by default looking to recruit such managers locally. While this might seem common sense it does come with some problems though, in the first instance, the recruitment of local managers brings a number of positive effects. Chief among these is the ability of such managers to interact with local workers in a way that is culturally relevant and sensitive but also in the knowledge they have of pre-existing networks, regulations, and mores (Sumelius et al., 2008). This saves a lot of time and avoids a number of pitfalls which otherwise could damage the business significantly.
The recruitment of local people also has other positive effects not least of which is the expression of commitment and trust it demonstrates to local stakeholders. This can have a very positive effect and should not be under-estimated. This also avoids, or at least helps confront, a problem long associated with powerful and wealthy Western businesses which is one of economic imperialism where culturally unaware and disinterested international managers give a poor impression of themselves and the parent business.
However, the HR managers ought to understand that recruitment of local people as managers is not a panacea. It comes with potential problems of its own, not least the limited pool of talent that is often available. Thus, suitable local people might simply not be available for recruitment and those that are, might lack the ability to embed the wider organisational culture of the business into the local subsidiary (Qin and Ramburuth, 2008). Where this happens then the subsidiary can become remote from the rest of the organisation and this can, for example, inhibit efficient knowledge transfer thus hampering innovation (Qin and Ramburuth, 2008). It is also the case that sometimes local workers resent the notion of a local manager (Cooke, 2005). This has been observed and the reasons behind it seem to lie in the fact that such workers view the international appointee as temporary and not someone who will be around long enough to overly intrude into the ways that workers organise their work on a day to day basis. HR manager should therefore look into ways of using the available knowledge on quality management to ensure that they increase productivity within their firms.
A final comment on this is to recognise that there are times when local recruitment is not possible (Russell Reynolds, 2005) and where this is the case, then rigorous pre-departure training should be undertaken, again, with an emphasis on the cultural issues that the manager may confront and needs to be aware of. Thus, we should not be doctrinaire about this one way or the other but we should recognise the advantages and the logic in having the recruitment of local people as managers, as the immediate selection and recruitment policy where possible.
Conclusions and Recommendations
Thus, we can see from the above, a number of issues that emerge as being highly concerning for the HRM teams of businesses that are seeking to internationalise their operations. While on the one hand this makes complete sense and is the direction of contemporary business, on the other hand it comes with a number of problems of which national cultural difference is one of the most significant. This paper referred to extensive research work done in this area and the consistency in the findings. However, there are also means of getting through these differences and we noted how the concept of ‘localisation’ is featuring more and more in the ways that modern business organise themselves.
Human Resource manager must be able to figure out regarding the future prospects to help them make informed decisions. In this regard, it is recommended that Apple Inc. HR managers consider the future prospects in their field of business through exploring on other markets. The lesson that Apple Inc. should learn from the situation deliberated in this report is that cross-cultural relationship is a challenge to any HR manager in any given organization. Therefore, the company must ensure that the managerial staff exercises their duties by focusing on the prospective and viable measure that are likely to improve the productivity of the entire organization. Additionally, Apple Inc. should learn that it is essential for the firm to build on ties between its business strategies and that of the clientele to establish an appropriate relationship.
It is, therefore, recommended that businesses that are looking to internationalise their operations should look to recruit locally for managerial roles, as a matter of course, and as discussed. The benefits of this are significantly greater than the risks while the opposite is the case by deploying managers from the parent country. We noted that this comes with problems but these problems are not so fundamental that they cannot be overcome by adequate nurturing and training. Thus, recruiting locally needs to have built into it an immediate need to adequately train the new manager particularly in regards to the vision, objectives, and cultural ethos of the organisation.
Commitment and passion has been the driving force behind our group as we worked together to ensure that we produce a quality piece. However, we all believed that commitment and passion alone cannot guarantee a quality masterpiece. I must say that all the group members were supportive and contributed enormously towards the success of this project. At a point I realized that all other members had the necessary skills and expertise that attributed to the success of our project. All of us acknowledged that workplace environment has drastically changed due to the advent of technology. Therefore, for HR manager to respond appropriately to globalization, they ought to employ new skills and competencies relating to overseas communication, language and culture, accompanied with technological capabilities. Working together also opened our eyes and it became evident that emergent skills and competencies were crucial in creating new roles for HR managers.