Managing a Global Workforce - Example

INDIVIDUAL Work-In-Progress Student Name: Jia HE Student ID No: 3048079 Plan No: 2 Assessment F P CR D HD Introduction According to Peter Dowling (2008), human resource management include those practices valued and strategized by organization for effective management of its human resource. Such activities and practices include employee recruitment, staffing, planning, compensation, and labour relations. Business globalization has brought on board quite some significant impacts on human resource management among organizations. Despite the numerous large-scale regional integrations that resulted in economic regions such as the European Union, NAFTA, EAC, ECOWAS, and Commonwealth, human resource management across borders differ sharply and can at times be a difficult act for Human Resource Professional with limited knowledge of a cross-border customs to practice effectively. It is also difficult to manage individuals with diverse backgrounds and cultural norms in an international organization (Dowling, P. et al., 2008). It is not possible to find out that human resource management practices in one country would more similar to human resource management practices in another country. However, it is common to find some similarities in the human resource function in more than one country. The difference in human resource practices from country to country results from cultural differences the human resource functions. These multi-nationals differences in human resource management lead to issues such as international taxation, international business relocation, recruitment and management of expatriates, and government relations. According to (Sheehan, et al., 2010), most countries reimburse taxes for expatriates because they are subject to international tax. Furthermore, they have domestic tax liabilities. With this in mind, it is therefore incumbent for any international organization to provide tax equalization among its employees. Failure to that, most organizations would lose much of its incentives and motivation set for overseas activities. We take into consideration a case study of Royal Dutch Shell plc in relation to its international human resource management to gain a better insight of issues facing organizations in international human resource management (Dowling, P. et al., 2008). Background of Royal Dutch Shell Royal Dutch Shell plc (Shell) was incorporated on 2002 on February 5th. It is an independent gas and oil company. The company operates in 3 segments that include Downstream, Corporate, and Upstream. Upstream consists of the operating segments Upstream Americas and Upstream International, which are involved in recovering and searching for crude oil and natural gas, transportation of gas, and liquefaction, and extraction of oil from oil sands. Downstream is involved in marketing, distribution, and manufacturing activities for chemicals and oil products, in alternative energy (except wind), and management of carbon dioxide (CO2). In the year 2011, the company purchased a marine terminal on the Pacific Coast of Canada as a probable site for export terminal of a liquefied natural gas. The following year the company’s fifty percent owned, Australia Arrow Energy Holdings Pty Ltd acquired all shares in Bow Energy Ltd. Shell has been restructured in 2000s; the new organizational structure can be described in terms of the four new organizational elements – the Business Organizations, the Corporate Center, Professional Services, and the Operating Units – together with the two organizational units that continued from the previous structure, the operating companies and the Committee of Managing Directors. Changes to the formal organizational structure were only one dimension of the organizational changes of this period. If Shell was to improve its operational and financial performance and improve its responsiveness to the multitude of external forces that affected its many businesses, then change needed to go beyond formal structures. The criticisms leveled at Shell for being bureaucratic, inward looking, slow, and unresponsive were not about organizational structure, and they were about behavior and attitudes. In any organizational change, a new structure may provide the right context, but ultimately, effects on individual and group behaviour are the most critical. Organizational Mission The aim of Royal Dutch Shell is to meet society’s needs concerning energy in economically, environmentally, and socially acceptable manner both at present and in the future. An overview of its mission statement indicates that the company appreciates the nature of its industry in relation to emission of greenhouse gases that contribute to global warming. Thus, the organization strives to maintain high environmental sustainability. Organizational Vision Dutch Shell envisions being the market leader in gas and oil industry and delivering the best value to their clients and stakeholders at large. Alongside its vision of being market leader and providing the best value to its stakeholders, the organization also envisions at providing a competitive shareholder returns and observing sustainability while striving to meet global energy demands. Issues of IHRM 1. Varying labour Laws and Regulations International human resource management faces regulatory challenges since multi-nation enterprises conduct their business in amaze of international trade agreement, parent country laws, and host country regulations as well (Dowling, P. et al., 2008). Additionally, environmental regulations are another part of legal requirements that organizations need to show compliance. It also wise to note that regulations that concern employment and recruitment vary from one country to another just like ethical dilemmas on preservation of human rights may also vary according to country. By large extend, labour related issues such as unions, labour laws, poor emphasis on written contract, and level of employee participation on HRM issues may jeopardise effectiveness of IHRM. 2. Diverse Cultural Orientations Before assigning any expatriate a foreign assignment, IHRM teams have to consider cultural differences between their local country and the hosting country (Benson, G & Marshall, P., 2009). The team should also consider how to address the identified differences in a way that will not affect employees on a foreign assignment. Different culture and backgrounds pose a great challenge in IHRM, as it is difficult to manage individuals with diverse cultural norms, practices, and beliefs. For instance, certain countries, such as those in Latin America do not recognize women taking up top leadership positions in an organization (Gerhart, B. and Fang, M., 2005). This will hinder a multi-national enterprise from sending a female expatriate to perform an assignment in such countries regardless of how good it would help the organization (Benson, G & Marshall, P., 2009). Additionally, it is common for other countries to accept gifts and other offerings in exchange of favourable business dealings. However, other countries like the US, it is uncommon for officials to accept gifts and gratuities for such nature as it will be going against laws and regulations on integrity and corruption. This therefore means that U.S citizens must abide by this culture in whatever part of the world they work in (Cance, C. and Paik, Y., 2006). 3. Employment and Training The employment and training of an expatriate will need a considerable degree of their personal lives involves. It will involve individual employees and their families since in most cases, sending an individual to subsidiary in foreign countries may have some impacts on their families. It is also necessary to involve expatriate employees, whether PCN or TCN, get to understand basic needs such as housing arrangements, compensation packages for the assignment, healthcare services available in the foreign country, taxes, allowances, and any legal knowledge necessary for smooth working of the expatriate. In local recruitment and selection process, the above-mentioned issues may not raise eyebrows as citizen employees will access and are aware of their country’s social amenities. With foreign assignments, expatriates should have to have a prior knowledge on the amenities available in the foreign country (Benson, G & Marshall, P., 2009). 4. Risk Exposure In international situations, human and financial consequences are more rampant than in domestic arena. Financial costs and consequences may be in the form of expatriate failure, which means premature return before accomplishment of the international assignment, or an unprecedented under-performance while still undertaking the assignment (Sheehan, C. et, al., 2010). This will result in a considerable financial loss for multi-national enterprises. Individual consequences may be in the form of political instability and event of terroristic attack. In essence, most multi-national enterprises spend huge sums of money in assessing political risks and terrorism activities before planning for a meeting or assigning international assignment. The threat posed by terrorist attacks has seen human resource departments plan evacuation and emergency measure for utilization in the event of any attack. 5. Government Relations According to Dowling, P., (2008), host-government relations play a pivotal role in IHRM and especially in third world countries. In most cases, these countries do not have predefined work permits coupled with easy access and acquisition of certificates (Cance, C. and Paik, Y., 2006). This is only in the case where individual relationship between the government and multinational organizational managers. Maintain good rapport between government official and multinational managers plays a crucial role in reducing complications such as documentation for work permits for an expatriate. Findings and Conclusions As discussed above, many challenges and complexities concern International Human Resource Management issues. International organizations operate in diverse conditions that include external context of region, nation, industry, and inter-organizational alliances and networks (King, E., et al, 2005). Method of governance and international trade regulations and barriers are some of the challenges that multi-national enterprises have to deal with (Dowling, Festing, & Engle, 2008). The challenge of Royal Dutch Shell to operate in many countries comes with its own strain in terms of labour laws and meeting local trade laws and regulations within the local country. The company takes pride in the kind of versatility that exists in its organizational structure and leadership relationship across the globe. However, management of people remains to be challenge due to diverse cultural backgrounds among employees (Jagersma, P.K, Van Gorp, D.M., 2002). Employment and training of expatriate employees is another challenge facing Royal Dutch Shell in selecting and training its expatriate employees. This is because it is necessary to involve individual employee and their family members in the relocation and transfer processes necessary for overseas assignment. It is necessary since transfer to another foreign country may not favour expatriates family in some way. As seen above, government and multi-national enterprises relationship is a major aspect in international human resource management. Royal Dutch Shell ensures that it maintains good relationship between itself and the governments of subsidiary countries to ensure successful working environments and maximum profits and ease of accessing documentation for its expatriate employees. In line with this, the organization ensures that its employees have prior knowledge to laws and regulations applicable in the hosting state. This ensures that employees for Royal Dutch Shell comply with both national and international trade laws (Jagersma, P.K, Van Gorp, D.M., 2002). Concepts and theories The choice of the organizational structure and the form of relationship that defines different levels of leadership are a challenge when it comes to international human resource management issues (Geringer, J. et al., 2002). Management of people from diverse backgrounds and multiple cultural orientations requires mangers to be flexible and apply their authority without upsetting the traditional of the context within which they rule. Appreciating the diversity of culture and being flexible is a prerequisite of all managers involved in international organizations. In addition, Motivation should perhaps be regarded as an integral part of total commitment of the corporation to the employee and the employee to the corporation (Farndale, E. et al., 2010). Analysis From tradition, Shell has been decentralized business globally with companies in above one hundred countries. Each of these companies was independently operated. The Upstream tended to be centralized with directions coming from the Hague offices. Shell human resource is mandated with the function of ensuring business operation goes on through managing and deploying the valuable resource of human beings. Recruitment, performance management, learning and development are all functions of Shell human resource. Central HR is normally shared service towards excellence of the whole Shell group. Central HR implements and designs processes, polices, and practices that are used to achieve the core objectives of Shell. Central human resource policies and practices are replicated in all countries that Shell operates in. the slight variations in policies, processes and practices is designing according to the country within which the company operates (Wright, G. et, al., 2005). Despite the complex sociol-cultural antecedent to these concepts of people in organizations, an understanding of the way people are seen, and see themselves, in organizations, is fundamental to effective people management across different cultures. This is particularly relevant to management in transitional and newly industrialized economies where conflicts between indigenous and foreign practices may come to the fore. A premise in this is there are inherent tensions between an instrumental locus and a humanistic locus of human value that are manifested differently indifferent cultures. Shell has non-discrimination policy and voluntary labour policies. An individual has to be willing to work for the company on his own. Child labour is prohibited. Women have their rights and are treated equally as men. The company promotes communication and transparency at every level of management. The company observes the minimum wage policy and meets the benefits mandated by law. The recruitment policy gives opportunity to every qualified individual to have an opportunity to work for the company if interest. Training and development is one of the career advancement policies that the company uses to motivate its workers. Shell applies transitional internationalization strategy when it comes of international human resource policies. Through growth in information technology, standardization of global policy design and practices is possible. Recommendations Various aspects affect international human resource management as compared to local human resource management. This is because international management is more complex than domestic human resource management since there is wide range of issues affecting international human resource management. Multi-national enterprises and international human resource managers should take into consideration a range of issues when focusing on international management. Such issues include culture, laws and regulations of the country, local expatriates’ expectations of pay, compensation and other payments, expatriate training and employment, risk exposure, and government relationship. The manner with which human resource managers strive to manage their global staff affects considerably on the success or failure of the specific organization. What most multi-national enterprises may consider as minute details on employees dealing with foreign assignments may vary from a country to another, thus calling for precise human resource strategies for expatriate recruitment, culture consideration, government relations, risk exposure, and varying legal and regulation differences among countries among other issues that concern international human resource management (Gregersen, H. B., 2005). References Benson, G & Marshall, P., (2009). The comparative roles of home and host supervisors in the expatriate experience, Journal of Human Resource Management, Vol. 48 (1) 49-68 Cance, C. and Paik, Y., (2006). Managing a Global Workfoce, Armonk, NY Dowling, P., Festing, M. & Engle, A., (2008). International Human Resource Management, Sydney: Thomson. Farndale, E., Scullion, H. & Sparrow, P.R. (2010). The Role of the Corporate HR function in Global Talent Management. Journal of World Business. 45 (2): 161-168. Ferner, A. Tregaskis, O. Edwards, T. Marginson, P. Adam, D. & Meyer, M., (2011). HRM structures and subsidiary discretion in foreign multinationals in the UK, The International Journal of Human Resource Management, Vol. 22 (3), 483-509 Gerhart, B. and Fang, M., (2005). National Culture and Human Resource Management: Assumptions and Evidence. International Journal of Human Resource Management, 16(6): 971-986 Geringer, J. Michael; Frayne, Colette A. & Mollilman, John F., (2002). In search of best practices In international human resource management: Research design and Methodology. Journal of Human Resource Management, Vol. 41 (1), 5-26 Gregersen, H. B., (2005). International assignments: An Integration of Strategy, Research, and Practice. Mahwah, London Jagersma, P.K, Van Gorp, D.M., (2002). International HRM: The Dutch Experience, Journal of General Management, Vol. 28 (2), 75-87 King, E., Dawson, J. F., West, M.A., Penny, C., Gilrane, V., & Bastin, L., (2011). Why Organizational and community diversity matter: The emergence of incivility and organizational performance. Academy of Management Journal. 54: 1103-1118. Kirkville, S. & Edwards, T., (2005). International HRM: national business systems organizational politics and the international division of labor in MNCs, The International Journal of Human Resource Management, Vol. 16 (1) Sheehan, C. Marilyn, F. & Peter, J., (2010). An investigation of paradigm choice in Australian international human resource management research, International Journal of Human Resource Management, Vol. 21 (11), 1816-1836 Wright, G. and Snell, S. and Dyer, L., (2005). International Journal of Human Resource Management, 16(6). Read More