Aligning Human Resources and Business Strategy - Essay Example

The Human Resource Management(HRM) function in todays times comprises much more than housekeeping, simple filing, and record keeping. After integrating HRM strategies with the companys objectives and goals then HRM plays a important role in adressing the company’s human resource troubles and find solutions to them. The major orientation is towards maintaining action, assimilation and future roles. In present times it cannot be imagined that any organisation can be highly effective without incorporating HRM policies. In present times it is well known that adopting HRM policies are of utmost importance to an organization for basic survival and to thrive in the future. In past the role of HRM was not connected in any way to the corporate profits. HRM was basically just an academic term in the company’s overall strategic plan of action and future strategy and it was a confusing and novel concept in the past. It was just dragged around with just a few plans about the employees but never became a part of the planning and strategic process. But today the vital importance of the force of people has been widely recognised and Human Resource has become a very intrinsic part of a number of global as well as domestic organizations. Manpower function includes decisions about human resource need planning, recruiting and selecting, placing and developing, evaluating and compensating, and employee relations. Human resource strategy is oriented towards consistent policies that enhance employees knowledge, skills, and abilities, and that make business level strategies more effective, and corporate level strategies more sustainable. The trend toward greater economic integration has led to a remarkable increase in the amount of competition for American businesses both abroad and in the U.S. domestic market. In the early 1960s, American firms produced over 40 percent of the world’s output. By 1996, U.S. share of world output slipped to 20.8 percent. Domestically, American businesses are facing more foreign competition than in the past. The above trend sailed throughout the 1990s and even show signs of growing in the 21st century. One international management scholar summed it up this way : “ Today, at the beginning of the 21st century, global competition is serious, pervasive, and here to stay.” How will firms survive in such a competitive, global environment ? By using the services of an Human Resource specialist, we will examine this question and look for answers in this essay. The people factor can help make the difference. Firms need to strengthen their presence, involvement, and relative positions in the domestic and global marketplace by utilizing their global human resources in a manner that helps them establish and sustain competitive advantage. By Global human resource management(GHRM) we mean the practises and policies linked to managing employees in an internationally oriented organization. Although GHRM includes the same functions as the domestic HRM, there are many unique aspects to human resource management in the international organization. There are many reasons that an organization might expand its operations beyond its domestic boundaries, but all the reasons are intended to help achieve the end results like : satisfied employees and competitive products and services. The specific reasons include searching for new or broader markets, acquiring new and more efficient manufacturing technology, and taking advantage of large, inexpensive labor forces located in other countries. We should understand that although the terms are sometimes treated as the same, there are distinctions between a multinational corporation and a global corporation that have important HRM impications. Multinational corporations are usually found in the early stages of an internationalization strategy. An MNC has operations in many different nations. Within, each country, the operations of the MNC strongly resemble a miniature version of the parent company in terms of structure, product lines, and procedures. Each separate enterprise within the MNC will be responsible for adapting the company’s products to the local culture, but most significant control remains either with the company home offices or in the hands of an expartriate from the home country. However, most of the employees and managers will tend to be from the host country as MNC’s utilize polycentric staffing practices. This fact is holds truth in the early period of internationalization. In contrast to the MNC, the global corporation is structured so that national boundaries disappear; this leads to staffing practices in which the organization hires the best people for jobs irrespective of national origin. This is referred to as global or multicentric staffing approach. A global company or organization will run its operations in any part of the world where it finds that it can be more cost effective by opening shop there. A truly global corporation also takes the world as a market for its products. For an international assignment from the global human resource management perspective of the company, the organization might choose to hire a HR professional who can assist in the ongoing success and survival of an organization in today's tough economic climate. The candidates can be the Host country national, who are employees from the local population, Parent country nationals, who are sent from the country in which the organization is headquartered. These people are usually referred to as expatriates, and Third country nationals, who are from a country other than where the parent organizations headquarters or operations are located. If the company is an MNC, especially one that is in the early stages of becoming international enterprise, it will probably take a relative ethnocentric perspective by trying to use the HRM policies from the home country with at best minor adaptations. The new, ethnocentric multinational organizations generally believe that all key personnel shouuld be parent country nationals because it believes that its ways of doing things are superior to those of other cultures. The main problem that a HR specialist can help an global organization or MNC to offset in todays tough economic environment is the tackling of the cultural differences that can differ in more than one way . It can be said that cultures differ in terms of the relationship of a person to his or her family. In some societies, such as Peru and Taiwan, the group’s achievement and well-being will be emphasized over the individual’s. In contrast, individualistic societies like the United States and Australia place more emphasis on individual actions, accomplishments and goals. A HR specialist can help in effectively bridging this gap. Cultures also vary in their view of power relationships. Human inequality is almost inevitable, but cultures with a high “ power distance” emphasize these differences. For example, symbols of power and authority such as large offices, titles, and so on are usually found in a culture with a high power distance. In a culture with a low power distance, there is less emphasis on such displays. In German corporations, the concepts of codetermination and worker councils are common. Giving employees genuine input into important decisions in an organizational practise typical of a low power distance cultures. A HR specialist can help in effectively bridging this gap. Another inevitiability is not knowing what the future holds. Cultures like Japan and Portugal with a high avoidance of uncertainity attempt to predict, control, and influence future events, while cultures with a low avoidance of uncertainity are more willing to take things day by day. To the extent that control reduces uncertainity, the rigid use of managerial control systems is more likely to be found in organizations in high- uncertainity avoidance cultures. A HR specialist can help in effectively smoothening this gap. Another dimension refers to the division of roles for males and females that a particular culture imposes. Masculine cultures have strict sex roles; feminine cultures have less defined roles. From an organizational perspective, masculine cultures like Austria and Japan might tend to be less supportive of efforts to integrate women into upper – level management than female cultures found in Norway and Sweden. A HR specialist can help in effectively bridging this gap while working between different cultures. Another aspect where a HR specialist can play a positive role generally refers to the extent to which cultures think in terms of the future ( the long term ) or in terms of more immediate events (the short term). Hiring a HR specialist pays the organiztion rich dividends as virtually every aspect of HRM can be influenced by cultural differences along one or more of these dimensions. For example, there is evidence that national differences in uncertainity avoidance and power distance can affect the extensiveness of organizational selection practices. Similarly, differences in individualism and collectivism can affect the overall success that a training program has on culturally diverse audiences. Other than that the placement and employment managers oversee the taking in and division of employees. These specialists also take care of the appointment of employment, recruitment, and placement consultants that also includes appointment of specilaists with recruitment and employment interviewers. Recruiters travel to different colleges and Universities to recruit potential candidates for the company. Employment interviewers also commonly known as human resource consultants help the company to match with qualified job seekers. Similarly, employer relations representatives, help the company in maintaining working relationships with various government agencies in an amicable manner. Compensation, benefits, and job analysts, also known by the name of position classifiers, examine, collect and assimilate detailed data about job duties so that to prepare job descriptions. These descriptions in turn explain the training, duties, and skills that each job entails. A job analyst is called by a Global organization whenever it introduces a new job or reviews existing jobs. A HR specialist will also help a global company in the following ways : Helping the organization reach its goals. In developing and putting to use the skills and abilities of the employees to the benefit of the organization. By giving the organization access to highly trained and motivated employees. By enhancing the employee’s job satisfaction and self- actualization. And also by helping in the development a high quality of work ethics that makes working in the company highly desirable. Communicating HRM policies to all the employees. He can help in maintaining and adoption of ethical procedures and socially responsible behaviour. HRM specialist can bring about changes that can be to the mutual advantage of everyone. He can Analyze and find solutions to problems not from just a welfare and service oriented point of view but will take care of profits also. He can be highly effective in the assesment and calculating of costs and advantages of various issues like recruitment, training, salaries and benefits, productivity, overseas relocation etc. The planning procedures adopted and put in to use by a HR specilaist will be more real, to the point and will address meaningful goals. He can put forth HRM solutions to the problems faced by the organization. He will also be responsible for the training of the human resources staff and making them understand the strategic importance HRM plays in contribuiting to the organizations profits. In nut shell in the light of the above discussion it can be said that in todays world an organization be it operating on the domestic level or international level it cannot survive and succeed in today's tough economic climate without putting to use the skills of an Human Resource Specialist. Bibliography Mark A. Huselid, David Ulrich(2001), The HR Scorecard(Boston : Harvard Business School) Michael Hammer(2001), The Agenda: What every business must Do, NewYork : Crown Publishing Andrew Mayo (2001), The Human Value of Enterprise ( New York: Nicholas Publishing Ltd.) Hugo Munsterberg, Psychology and Industrial efficiency, Boston – Houghton-Miffin. Jay Barney(1991), Firm Resources and sustained competitive advantage, Journal of Management. Randall Schuler(1998), Understanding Compensation Practice variations acroos firms : The Impact of National Culture, Journal of International Business Studies. J.Peter Killing and Allan J. Morrison, International Management Text and cases. Preston Townley, Global Business in the next decade, Journal of Management. William Weech, (January 2001), Training across cultures: What to expect, Training & Development. Annie Mry Ryan & Helen Baron(1999), An International look at the selection practices. Earl Naumann(January 1993), Organizational Predictors of Job Satisfaction, Journal of International Business Studies. Ivancevich m. John, Human Resource Management, Tata Mcgraw Hill Linda Holbeche(2002), Aligning Human Resources and Business Strategy, Butterworth Publication Read More