HRM Assignment: Centralizing HR Decisions For MNEs To Get Success In International Market
Question
Task:
Individual Essay:
The HRM assignment requires you to adopt a position regarding the following statement:
“Centralizing HR decisions is necessary for MNEs to be successful on an international scale”
Answer
Introduction
The concept of International Human resource management (HRM) explored in this HRM assignment is actually used by organizations that need to manage the employees and resources at a global level. The international HRM includes typical HR management functions like recruitment, selection, on-boarding, development through training, appraisal and promotion. These all are analyzed at the global level so that Multinational Enterprises can advertise their positions or update their practice for the purpose of making way through the international market. The study mainly focuses on different theories and the process of centralizing HRM for the purpose of being successful at the global level. The discussion part sheds light on the resilience of managing a company successfully. The topic has been discussed based on the argumentative analysis where the author puts on agreement towards the topic. Centralization is important for success of an organization with the international market and this statement has been clearly discussed throughout the study.
Discussion
The statement of the topic has been agreed with by the author and it has adopted a positive position within the essay. International HRM is mainly applied to MNEs and the principles are applied to three main areas. These include cross-culture management, the practice of HRM in various global sections and focus on multinational organizations. There are many factors that MNEs need to give attention to like tax regulations, immigrations, industry and international relations and cross-culture. Moreover, it is very important that a company has a clear purpose and objectives for international assignments.
Human resource management helps the organization to develop employees and shape up their potentialities so that they can drag maximum out of them. The international HRM is mainly centralized so that proper planning, directing, controlling procurement and integration is maintained throughout the achievement of social and organizational goals. In order to achieve centralization, the practice needs to follow a few theories.
Organizational Behaviour Theory: The human resource needs to follow and track organizational behaviour and in order to study human behaviour within an organization, the theory must be practised. The theory was developed by Frederick W. Taylor and he embraced the core principles of reducing conflict, the increment of output, simplification of duties and promotion of cooperation and this has effectively helped the organization to enable employees to provide the best abilities. The theory states that humanistic values on organizational behaviour are very important and they translate into action and productivity. The theory also concentrates on the fact that the value of human experience in a working environment ultimately impacts the operation and development of the organization (Chung at el. 2016). This theory found a new way holding the hands of Kurt Lewin who again made great contributions by pioneering T groups. This T groups basically help people to understand the meaning and consequences of their behaviour and others' towards them. In international HRM, the organizational Theory shows approaches to understand behavioural science. The organizational theory also concentrates mainly on individual behaviour, group behaviour, organisational structure and processes. The most significant quadrant of this theory is Motivation and this is connected to the level where employees become invested in the action and mission of the organization. The motivation can be intrinsic (self-reward)and extrinsic (salary or promotion) and this can increase self-esteem and self-actualization.
Human Capital Theory: This theory is the theory of earnings and this stands as a major determinant of poverty. This theory has been developed by Becker and Mincer and this explains the individual's decision to invest in human capital and the pattern of their lifetime earnings. Individual's investment in education, training and learning can be explained in the terms of expected returns. The theory also explains when to invest and how the earnings become low gradually. This also states that as people are young they invest low amount and they invest in human capital. The international HRM is highly affected through this theory because this is consistent with the prediction of investment and as a young person moves out of parent's house they tend to opt for earning on their own. This is important as they help the organizations to get new talent as on other hand, the employees understand the importance of human capital. The pace of productivity remains high with new employees being young and they contribute to high growth and earnings of the company. The theory mainly contributes to the fact that organizations must involve young employees as an international working force because as employees grow old their productivity decreases and there is a downturn in average earnings (Gillies, 2017).This becomes a loss for both employee and organization. This is why; the centralization of HRM is done so that proper productivity can be extracted in proper time.
Apart from the theories, the effectiveness of human resource departments involves strategic business policies and this provides business advantages. As critically analysed by Holden & Biddle (2017), centralization of human resource can have a positive impact on the MNEs. The centralization can save money on organizational costs and transactions for the HR department. However, as contrasted by LeCounte, Prieto & Phipps, (2017), centralization not only help to reduce costs, however it can result in better recruitment and payroll processing. The centralization helps the recruiters to lower the whole operating costs along with a better audit procedure. The centralized human resource can help the employees to get access to line managers and senior management and it can provide quick service. The centralization means rapid tracking of the whole HR system and a centralized working department can quickly deliver quality service within a reduced deadline. As stated by (), knowledge sharing is very important and rapid dissemination of knowledge is important for the development of organization at an international level. The centralization, as critically acclaimed by some authors, can provide quick communication to the MNEs. This communication helps to ease employee job description, their onboarding process, the quality of candidates to be selected as an international workforce and understanding the need for corporate goals. The analysis of centralization states that proper centralization efficiently optimizes essential business processes. The employees can develop and coordinate the consistent process of recruitment, payroll procedure and recognition. The changes and updates need communication so that variance in location, culture and language is not a barrier. Finally, the organizational support is important as it makes more sense in respect to global operation and meeting of international needs of MNEs.
As a real-life instance, Emirates Airlines has been the best in centralizing human resource and they have shown the real path where the company has received 250 international excellence awards. The centralization has helped to increase revenue by 49% and the employees follow the defined services. The company recruits people from cross-cultural background and this helps to deal with different passengers at different point of time, without any barrier (Ripoll-Zarraga & Lozano, 2020).
Conclusion
The study infers that international human resource management helps to manage people, projects, international ventures and activities in at least two foreign countries. The success of business and trades depend on the skills and quality of human resources. The study has discussed the theories and importance of IHRM so that the effectiveness of resources in managing organization at the international level can be understood. The study also concludes that organizational behaviour, though a theory still implies the need for proper behaviour within an organization. The behaviour enhances the chance to develop managerial skills and organizational knowledge along with the technical abilities of HR at an international level. The global business handling is very important and without proper human capital, it is impossible to tackle the operations. The study focuses on the fact that IHRM is important because it helps to secure performance and compensation. The human capital theory is responsible for guiding people at the proper career path in proper time with the ability of productivity. The study can be concluded with the assurance that human resource can manage organizational cross-culture and thus, contribute to the eradication of the language barrier.
Reference List
Chumg, H. F., Seaton, J., Cooke, L., & Ding, W. Y. (2016). Factors affecting employees' knowledge-sharing behaviour in the virtual organisation from the perspectives of well-being and organisational behaviour. Computers in Human Behavior, 64, 432-448. Retrieved from https://www.sciencedirect.com/science/article/pii/S0747563216305003 on 30 November 2020
Gillies, D. (2017). Human capital theory in education. Encyclopedia of educational philosophy and theory, 1-5. Retrieved from https://www.academia.edu/download/55572431/Gillies2015_HCT.pdf on 30 November 2020
Holden, L., & Biddle, J. (2017). The introduction of human capital theory into education policy in the United States. HRM assignment History of Political Economy, 49(4), 537-574.Retrieved from https://read.dukeupress.edu/hope/article-abstract/49/4/537/133122 on 30 November 2020
LeCounte, J. F., Prieto, L. C., & Phipps, S. T. (2017). CEO succession planning and organizational performance: A human capital theory approach. Journal of Leadership, Accountability and Ethics, 14(1). Retrieved from https://www.articlegateway.com/index.php/JLAE/article/view/1613 on 30 November 2020
Ripoll-Zarraga, A. E., & Lozano, S. (2020). A centralised DEA approach to resource reallocation in Spanish airports. Annals of Operations Research, 288(2), 701-732. Retrieved from https://link.springer.com/article/10.1007/s10479-019-03271-6 on 30 November 2020
