Can the Best Practice Model of Human Resource Management Be Developed in the Global Context - Coursework Example

Intеrnаtiоnаl аnd Соmраrаtivе Нumаn Rеsоurсе Маnаgеmеnt Question A ‘Human resource management is converging to a worldwide best practices model’. Utilising the extant literature, critically discuss the extent to which you agree or disagree with this statement. This statement cannot be agreed upon, since human resources management is not a unified or universal concept, or model. It varies with the situation and environment. The following discussion proves this contention. Introduction During the past few years, the concept of best practice human resources management (HRM) has gained prominence to a major extent. In addition to the pioneering work of Jeffrey Pfeffer, in this area, several contributions from the USA and UK strongly contend that a specific set of human resources (HR) practices have the capacity to enhance profits[Mar00]. Such increase in profits has been conjectured to be independent of the industrial, national, or organisational context. However, the perceived good in best practice HRM has been questioned by many scholars. It is their contention that such practice may not prove to be of significant benefit to workers. These scholars have suggested that several difficulties are associated with the concept of best practice. Such issues relate to the connotation of specific practices and their consistency with each other, and the claim that this variety of HRM has universal applicability[Mar00]. According to this discussion, the best practice model of HRM cannot be developed in the global context. In addition, Pfeffer had provided a list of the principal elements relating to the notion of best practice in HRM. Some of these are; employers adopting policies involving high-costs and high-skill employment. A model based on these policies permits firms to compete on the basis of productivity and quality. As this approach to labour management entails significant costs in investing in employees, it has not gained appreciable acceptance[Mar00]. However, it is feasible for various features of different models to be simultaneously available, in practice. For instance, different levels of union participation may be related to greater participation levels, higher security of tenure, and the presence of individual systems for involvement. This indicates that the options exercised by managers are limited by a competing array of circumstantial actualities[Bre08]. These realities influence decisions to deal with unions, the comparative security of tenure provided to employees, and the utilisation of a different types of participation and involvement. Furthermore, the influence of institutions functioning at an array of levels is highlighted by these competing realities. In addition, they affect policy decision by firms and governments. As such, a class of practices is better replicated on the basis of complementarity. Thus, some practices have better outcomes when they are carried out together, rather than in isolation. Upon encountering a comparatively stronger national or sector-specific labour movement or formal transnational regulations, HRM policies could be modified by managers, in order to derive the maximum benefit from these realities[Bre08]. Under these circumstances, managers could attempt to construct complementarities. On the other hand, some managers could attempt to circumvent these realities by combining international best practice with what they could be compelled to do in a particular domestic context. In other words, these managers could attempt to seek coexistence between their national compulsions and the international requirements. In many instances, national institutions do not have the strength to impose uniformity on the actions of firms[Bre08]. At the same time, managers are not at liberty to select HRM policies and practices without complying with the local conventions, norms and rules. However, the majority of the conceptual models furnish a basis for anticipating the multinational corporations (MNCs) to apply a global element to the manner in which they supervise their international workforces. One of the bases for a uniform international approach is to obtain advantages from integrating and coordinating their different units. The entities that stress upon these advantages tend to differ in their discussions regarding the manner in which MNCs achieve such synchronisation and assimilation[Edw05]. There are also differences in discussions regarding the degree of integration and coordination. This necessitates the internationally undeviating HRM to change itself to suit indigenous settings. All the same, it is generally claimed that the individual MNCs should ensure a measure of uniformity, as this will guarantee consistency in their HR practices at the global level. It will also prove to be beneficial to their global business strategy. The MNCs can ill afford to ignore their competitive compulsion to improve their operations, by disseminating practices that may promote efficiency in other areas of their operations. This constitutes a source of pressure for global uniformity. As such, several economists had shown this to be the reason behind the expansion of firms into other nations. An example is provided by the internalisation approach, which stresses upon the competitive advantage derived by firms, due to their transferring expertise and knowledge to other countries[Edw05]. Additionally, by adopting a resource based point of view, Taylor et al. contended that the practices and strategy of MNCs had to be based upon explicit organisational competencies. These competencies had to be crucial for obtaining competitive advantage in the global milieu. One of the forms that can be assumed by this is that of extending practices to foreign subsidiaries from the home country. It was declared by Bird et al. that a home management system has the capacity to represent an explicit competence or resource for the firm. This would result in that system being transferred to overseas ventures, in order to duplicate the advantage. At the same time, global innovation can assume the form of accessing the wide range of practices that are undertaken by a MNC in various locations [Edw05]. As suggested by Kamoche, the transfer of practices can be operationalised, as a component of an international feature of management style, by engendering management transfers across business units. In addition, it can be achieved by having in place effective communication systems between these units. The managers of the MNC derive considerable knowledge from having worked at different subsidiaries. Such knowledge provides a degree of freedom to managers to adapt HR practices to the local situation. However, their extensive knowledge, obtained from their work with the MNC, results in their conforming to more or less uniform global HRM strategy[Edw05]. At the same time, corporate initiatives emerging from headquarters and promoted internationally can be opposed by opposing domestic cultures. Thus, the management practices native to Australia could prove to be culturally at variance with the practices of a foreign country. Moreover, disparity between the management practices pertaining to a work unit and national culture could adversely affect performance. For example, several of the developed nations have management cultures, wherein individualism and other such traits are encouraged. This does not hold true for most of the developing countries[New96]. In order to improve work output, managers working in foreign subsidiaries have to adapt to the local work culture. Theories of Localisation For example, the institutional theories submit that organisations with similar environments will progressively take on similar traits. This will serve to render them isomorphic with each other[Bre08]. Some writers have bestowed specific significance upon the likelihood that organisations symbolise cultural communities of rational utility maximising individuals[Bre08]. In addition, in several organisations, expatriate selection tends to be determined by chance and not good management. The effectiveness of expatriate management is considerably diminished for the following reasons. In the public sector there tends to be greater reliance on technical competence as the chief criterion for selection. At the same time, the status of partners and children is not accorded much importance. However, the non-governmental sector organisations had better selection criteria. These organisations evaluate technical competence, interpersonal skills, and include the partners and children of the prospective employee[And051]. Duality Theories According to the duality theories, firms envisage incompatible stresses with regard to global integration and local adaptation[Bre08]. It had been postulated by the convergence theory that the development of values depended upon the extant technology in a specific society. This was the outcome of the influence of technological development upon institutional and educational entities. With increasing industrialisation and use of technology, societies will become similar to each other to a major extent. This will result in values converging to those of Western capitalism, the seat of maximum industrialisation[Mic14]. In practice, this theory is not viable, as HRM procedures are at variance in organisations, globally, due to differences in national cultures. However, the divergence theory contends that socio-cultural influences constitute the forces that actuate members of society to adopt specific values, regardless of other external inducers. On the other hand, the crossvergence theory declares that value systems are created by a combination of business ideology influences and socio-cultural forces[Mic14]. Conclusion This discussion proves the contention that human resource management cannot be converged in to a world best practice model. Policies and procedures of HRM depend on factors relating to local culture and environment. Corporate initiatives that emerge in the head office of the organisation cannot be suitable for its subsidiary in a foreign country. Divergence theories suggest that socio-cultural influences are real forces that create the values adapted by society, regardless of other external factors. Differences between the management practices relating to a work unit and the national culture may have an adverse effect upon performance. References Anderson, BA, 2005, ‘Expatriate selection: good management or good luck?’, International Journal of Human Resource Management, vol.16, no.4, pp. 567-583. Brewster, C, Wood, G & Brookes, M, 2008, ‘Similarity, Isomorphism or Duality? Recent Survey Evidence on the Human Resource Management Policies of Multinational Corporations.’, British Journal of Management, vol.19, no.4, pp. 320-342. Edwards, T, & Kuruvilla, S, 2005, ‘International HRM: national business systems, organizational politics and the international division of labour in MNCs.’, International Journal of Human Resource Management, vol.16, no.1, pp. 1-21. Marchington, M, & Grugulis, I, 2000, ‘Best practice' human resource management: perfect opportunity or dangerous illusion?’, International Journal of Human Resource Management, vol.11, no.6, pp. 1104-1124. Michigan State University Broad College of Business 2014, Divergence, Convergence, or Crossvergence in International Human Resource Management, viewed 5 September 2014, . Newman, KL, & Nollen, SD, 1996, ‘Culture and Congruence: The Fit between Management Practices and National Culture.’, Journal of International Business Studies, vol.27, no.4, pp. 753-779. Read More