Trianon Company - Role of Human Resource Managers in Joint Venture - Case Study Example

International Human Resource Management Author Course Tutor Date Introduction There is increased need for Human Resource specialists to meet the international business orientation through their roles. The functions of HRM are acknowledged both in domestic and international business operations. Availability of free business environment, introduction of new technology, and reduced restrictions in the movement of labour more so in the European Union has facilitated international business operations (Harris, Brewster and Sparrow, 2003). International businesses comprise both the private sector and the government, who all depend on HRM for the success of their business endeavors. Managers who work in the international environment are exposed to more challenges than those in domestic environment. Human Resource managers are not exception, and making selection choices on whom to work in the international environment is a complex task (Aguilera and Dencker, 2004). The paper will analyze the issues presented in the case study in respect to the international HRM, and how it is necessary for the success of the international business operations. Factors in expatriate selection According to Graf, (2004), the success of expatriate majorly depends on the selection process. In fact, selection procedures that go beyond intercultural and technical skills are being encouraged. These selection procedures are however, limited because of scarcity of intercultural competences required to perform international duties. An expatriate should be open to others and respect their ideas, so as a trusted relationships can be maintained among people. He or she should be sensitive to others peoples’ feelings and thoughts, and always be non-judgmental. The person should also be technically competence (Harris, Brewster and Sparrow, 2003). These and others factors should be considered by Alistair in selecting the best candidate among the three for the position of Quality Compliance Manager in their joint venture in Hungary. Selection criteria Selection process does not only involve the individual, but also the organization. An individual may not take up the expatriate job based on personal grounds like technical inability, or due to situational considerations like language barrier. It is the responsibility for the HRM to identify the best selection criteria when selecting employees for international appointments (Child, Chung and Davies, 2003). When selecting the Quality Compliance Manager, Alistair should consider both individual and situation factors. Individual factors include technical ability, cross-cultural suitability, and family requirements while situational factors include country or cultural requirements, language, and MNE requirements. For the purpose of this case study these factors will be discussed in detail. Technical ability This is the ability of a person to perform specific assignments. Both managerial and technical skills are important criteria in the selection process. Many multinationals rely much on technical skills when selecting expatriate (Graf, 2004). This is also emphasized in the case study. Henri is categorical that the job description shall focus much on technical skills and not administrative competences when appointing the Quality Compliance Manager. Multinationals can assess an individual effectively by considering his or her technical skills. Technical ability is a simple criterion to use in section process since it is determined based on the past performance. The best person for the position of Quality Compliance Manager would be Janos Gabor since he has technical skills in cathode ray tube productions, unlike Marie Erten-Loiseau who have general experiences. Sinead Marrinan-McGuire would be a suitable candidate for the position based on his experience on R&D on the project to be undertaken in Hungary. In most cases, expatriates are internal recruits, and this makes the work of selection staff simple since personal records are examined in order to choose an appropriate staff to fill an existing vacant position (Scullion and Collings, 2006). The challenge with this is that past experience may not imply that the person has the ability to perform tasks in the foreign environment, considering the fact that cultural differences exist in different nations. Cross-cultural suitability Cultural environment determines how successful an expatriate performs. Expatriates need cross-cultural abilities to enable them perform well in new environments. Research indicates that the preferred attributes under cross-cultural suitability are diplomacy, language ability, cultural empathy, maturity, emotional stability, and positive attitude (Brewster, Sparrow and Vernon, 2007). In cultural suitability, Janos Gabor still features as the best candidate. Having studied in Hungary is an indication that he understands the culture that country better than the rest. A candidate like Sinead is most familiar with Ireland and London, and relocating to Hungary may be challenging to him as an individual. Practically, it is hard to define what the inter-cultural competence constitutes, and to determine the suitability of the candidate in this respect. Aspects like personality, willingness to socialize with people from other cultures, and attitude to foreigners may have to be considered when making a choice (Dowling et al, 2008). Family requirements A family, more so the spouse determines the success of an overseas assignment. It has to be considered in expatriate selection. However, despite the need for an accompanying partner on return, the focus is still on the expatriate. As much as multinationals are concerned more with the performance of an expatriate in the host country, interaction with the expatriate, family members' experiences in adjusting, and spouse or partner have also to be considered (Anderson, 2005). Although Sinead has experience on the project, family requirements may not favour his appointment. She is a married lady with three children, which may not allow him to relocate to Hungary. Marie Erten-Loiseau may not be affected as such since her child is mature, and moving to Hungary may not affect the child’s education. Janos can easily relocate to Hungary since he has no family attachment, and thus he is the best candidate to select for the position based on the family aspect. The spouse normally carries the biggest burden including establishing a new home in the foreign country. It may also imply leaving behind her carrier together with friends and relatives who would otherwise offer support networks. The education of the children may also be an issue of concern for the family and more so the spouse (Huang, Chi and Lawler, 2005). Sometimes, so much pressure on the spouse together with difficulties to adjust to cultural environment may force couples to return home before the contract expires. Country or cultural requirements It is a requirement for international firms to show that HCNs are not present before the host country allows the entry of selected PCNs or TCNs upon the issuance of entry visa and work permits. Sometimes the host country may block the expatriate from entering the country. In this respect, most developed nations are adjusting their legislations to allow immigration of expatriates, which will facilitate international transfers (Anderson, 2005). This criterion does not affect individual candidates. It is upon Alistair to update himself on the employment requirements in Hungary in order to select the best candidate to fill the position, based on the personal qualifications. The HR staff is supposed to be informed about legislative changes in different nations in which they have joint venture (Forster, 2000). In some cases, other regions are considered hardship areas, and may not be attractive for some expatriates. This may determine whether to select the HCNs or the expatriates. Language The ability by the expatriate to speak the local language in the host country is a factor to consider in the selection process. This is related to cross-cultural ability. Language skills is an important requirement for positions, and less important for others. However, some argue that the ability to interact with people in the host country in their language is strength to expatriates at all the position (Sparrow, 2007). Among the three candidates, Janos Gabor could be at an advantage of being in a position to understand the language of the nationals in Hungary because he had some experience in Hungary as a student. Both Sinead and Marie could be appointed, but then some training would be necessary to enable them communicate with the nationals in Hungary. Differences in language hinder cross-cultural communication, which intern affects the performance of the expatriates (Shen, 2006). MNE requirements Sometimes, multinationals may be concerned with the number of expatriates to select in international assignments in relation to the local staff. Multinationals may be required to recruit more TCNs and PCNs depending on the operations in certain countries (Anderson, 2005). Therefore, international staffing comprises of the polycentric, ethnocentric, and geocentric approaches. Polycentric approach involves filling major positions by nationals of the host country (HCNs). In ethnocentric approach, international positions are occupied by the nationals from the home country ( PCNs), while geocentric approach is where qualified personnel is recruited both from abroad and home country without considering the nationality (TCNs). (Caligiuri, Tarique and Jacobs, 2009).This is an issue to be discussed by Alistair recruitment team, considering the fact that none of the candidates comes from the host country, Hungary. General recruitment and selection process for Trianon Trianon Company does not have a defined process of recruitment and selection as identified in the case study. The company first establishes the position to be filled within. It then formulates the job description that relates to the requirements of the job. The company has a website from which employees’ profile can be assessed and used to make selection decisions. Employees are then assessed based on their skills and abilities. This procedure may not help the company get the right personnel. Below is a selection process Trianon could use when recruiting staff. Job positions should be advertised both from within and without the organization to allow qualified candidates to apply. The company then receives applications from the interested candidates who are called for interview. The selection process begins by receiving the applicants who are then taken through screening interview, selection tests, selection interview and medical examination. The company may be required to perform reference checks before making the decision to hire the best candidate from the pool. Following the above selection process would help the company to ensure that the job specification is consistent with job requirements, and would recruit the right person. This is because job applicants are given the opportunity to demonstrate the abilities in a fair way, and the best candidate is selected for the position. Job descriptions should be prepared in advance even before the job is announced to avoid any sort of confusion when it comes to the selection process. Role of Human Resource Managers in Joint Ventures According to Aguilera and Dencker (2004), a joint ventures is a mode of growth companies use in order to have a competitive advantage in the current complex business environment. Most literature on mergers and acquisitions focuses mainly on the financial and strategic issues in the process of joint venture. Trianon should involve Human Resource staff if it has to succeed in its joint venture program after the implementation process is complete. In case Trianon fails to involve HR staff in the making of strategic decisions in the international business operations, despite its potential to offer important services, could lead to inability for the firm to account for issues to do with personnels. The HR Staff will add value to the firm and help joint venture to achieve the possible post-merger synergies (Tarique, Chuler and Gong, 2006). It is also important for Trianon management to ensure that the HRM strategies are in line with the undertaken joint venture strategies, in a way that makes their joint venture successful. However, realizing synergies in the joint ventures is easier in domestic joint ventures than it is in cross-border joint ventures, especially when HR staff is not included in the process. It is difficult to manage fit among different HRM practices within firms; therefore integrating HR staff in the joint venture may result to uncertainties. Trianon should thus consider whether or not to involve HR staff in its joint venture. Differences in the environment of countries that are involved in the joint venture may require Alstair to use HR staff to carry out their roles in the cross-border joint ventures (Aguilera and Dencker, 2004). The role of HRM in contributing to the success of the joint venture can be understood well by not only considering the link between HRM strategies and joint venture strategies, but also the eventualities in respective nationals. Trianon Company should consider the national aspects like the legal framework, financial, employment systems, economic organization, corporate governance, and cultural aspects when hiring the HR staff to work in its joint venture (Child, Chung and Davies, 2003). It is the responsibility of the HR staff to understand the requirements of different nations, and how to adopt cost –effective practices of management, and this is why Trianon may not do well in the joint venture without involving HR personnel. The HR staff helps to explore how the joint venture handle the demands of the expatriate (Piotrowski and Armstrong, 2006). When used in a joint venture, it would ensure that the compamy, in a cost- effective way manages the employees in the host countries. The role of HR staff in the joint ventures will be influenced by the host country, the size of the firm, and the employees involved that is, TCNs, HCNs, and PCNs. This implies that Trianon should use competent HR staff to manage employees from different countries, which may be challenging because of cultural differences (Aguilera and Dencker, 2004). Use of Human Resource staff in the joint ventures will help the company the handle some issues, especially on an international scene. Issues like expansion and diversification of the units of operation, increased influence from external stakeholders, increased risk exposure, and concern for employees’ family members and relatives can be accommodated by the HR staff. Conclusion In conclusion, organizations with international operations have to appreciate the role of HRM in ensuring their success. Joint ventures require selection of appropriate expatriates to manage tasks in the host country. From the discussion above, it is observed that factors like technical ability, family requirements, cross-cultural suitability, language, MNEs and country requirements are critical factors to consider in the selection of the expatriate. The HRM should be involved in the selection process since they understand recruitment and selection procedures better. The best candidate to be selected as the Quality Compliance Manager in Hungary is Janos Gabor since he meets most of the criteria discussed above. References Harris, H., Brewster, C., & Sparrow, P. R 2003 “International human resource management”, CIPD Publishing. Aguilera, R. V., & Dencker, J. C 2004 “The role of human resource management in cross-border mergers and acquisitions”, The International Journal of Human Resource Management, 15(8), pp.1355-1370. 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