The paper " International Human Resource Management - ABB Engineering Company" is a perfect example of a management case study. Activities in the last two decades have shown an increase in the number of organizations that have internationalized their operations as they are being pushed by the need to remove national protectionist trade policies and deregulation of international fiscal and monetary markets (Cieri, et al, 2003). This has called for managers to increasingly pay attention to the impact of globalization on the management of human resources across national boundaries (Cieri et. al, 2003).
The issues to give more attention have issues such as expatriate management, managing other cultures, working with impetrates and managing diversity in multicultural domestic forces (Cieri, 2003; Dowling et al. , 2008). Such issues are much focused on because of the kind of dilemma that they put companies in. In this context, this paper is geared towards discussing the issues and challenges in international human resource management in details. The discussion will revolve around aspects of international human resource management like culture, differing management practices, leadership, communication, recruitment, relevant HR functions and global financial crisis and its effects.
The discussion as well is based on knowledge of international human resource management as worldwide management of human resources (Schuler, 2002, p. 41; Harzing & Ruysseveldt, 2003). The purpose is to enable the multinational enterprise to be successful globally, be competitive globally, be efficient, be adaptive and responsive over short periods and have the ability to transfer knowledge across their globally dispersed units (Schuler, 2002, p. 42). Case Study: ABB Engineering Company In 1988, two firms were witnessed merging together, that is, ASEA of Sweden and Swiss firm Brown Boweri and formed the largest engineering firm in the world, ABB (McGraw-Hill, 1).
Their greatest advantage was that they all had international operations and therefore when it merged, it managed sales of over US$ 15 billion and 160, 000 employees (McGraw-Hill, 1). At this time, ABB was being managed by Swedish CEO, Percy Barnevik and he managed to transform the company competitively until most firms were closing down in Europe as it expanded its operations to Asia and North America. The expansion went on for a decade with ABB setting up new businesses and diversifying its operations by establishing local ventures with local companies in China and other markets like France (McGraw-Hill, 1).
Barnevik's aim was to create an international company that was global and local, big and small and radically decentralized with centralized reporting and control. This led to the formation of business units with committees and functional councils being set up to operate them. However, after this high speed of growth, ABB started encountering problems. First was the economic downturn in Europe; being a target of many expensive asbestos-related damage claims in the US; limitations in the firms’ management.
In addition, smaller local acquisitions were not well integrated with the rest of the firm; failure to achieve sufficient global synergies and efficiency; the conflict between business areas and national units; local profit centres continued to operate their own human resource management systems nationally but not regionally (McGraw-Hill, 2). The new manager then, Goran Lidahl tried to impose discipline by eliminating regions and giving more but to global business but all was in vain.
Another manger came, Jorgen Centerman (McGraw-Hill, 2). He reorganized ABB into seven business divisions structured along with with user markets but this increased complexities of the firm because there were no country managers to coordinate local operations (McGraw-Hill, 2). This led the firm to a point of bankruptcy before another CEO took over, Jurgen Dormann.