International Human Resource Management - Research Paper Example

Paper Type:  Research paper
Pages:  6
Wordcount:  1439 Words
Date:  2021-05-28

International human resource management is a process of developing, employing and rewarding employees in international organizations. The extensively known challenge in human resource is managing and developing human resources in the global setting particularly between the international organizations. An international organization is one in which operates in more than one country through the establishment of subsidiaries in foreign. The branches depend on the manufacturing capacity of the parent company (Schuler Budhwar & Florkowski, 2002). Such firms bring with them their management approaches and leadership style. However, a lot of international factors influence the performance of human resource managers of these companies. These factors from the perspective of international human resource management, in turn, affects HRM practices, and they include; economic, political, labor cost cultural and industrial relation (Chand, 2017).

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In international human resource management, culture has remained to be a critical issue. Culture is the shared values, norms, and beliefs by individuals. Organizational culture is the universal fundamental set of values, assumptions, perceptions and shared beliefs that influence the way employees conduct themselves in any given organization. The same differentiate one firm from another. Social class, cultural values, and essential management differs in every country. For instance, the western culture extensively differs from the eastern culture. For example, the motivation plans among Asian countries such as Japan seem to an emphasis on the work group, while in western countries such as the United States, routine prescription focuses on worker incentives. Hofstede carried out a study on cultural differences in more than 40 countries targeting 11,000 employees and 66 managers employed by International Business Machine. In his study, he found out that society differs on four critical dimensions that were identified as follows (Chand, 2017).

Individualism versus Collectivism

Individualism is the social, cultural attribute where individuals favor to look after themselves and families as their priority, while collectivism is the opposite of individualism where people prefer to give their prime loyalty and protection to a wider group. What this implies is the liking of a person to either work in an individual or collective way.

Power Distance

By power distance, Hofstede means the level at which diverse cultures accept different power within an organization to be distributed equally. As such, there is less of the power gap between top and bottom ranks. Hofstede concludes that when there is power distance, there are fewer chances of employees influencing the decisions made and vice versa (Chand, 2017).

Uncertainty Avoidance

Uncertainty avoidance is the creation of rules and mechanisms of eliminating ambiguity in an organization while supporting those beliefs that are promising for conformism and certainty. Differences do exist among countries from this point of view. For instance, Germany employees feel much greater for rules and regulation as compared to China employees.


The extent to which the society has the propensity to favor assertiveness and materialism or it is more concerned with the welfare of others in society. Hofstede in his research concluded that it is not practical to produce an integrated managerial approach that can be adopted globally to cater for the needs of employees and the need for change. To conclude, contingency approach to human resource management is called for in such a scenario (Chand, 2017).

Labor cost factors

Labor cost factors that exist in different countries influences human resource practices. If the cost of labor is high, more focus is needed in work efficiency which ends up affecting human resource practices to move toward improving the employee performance. Evidence available show that there are inter-country differences in the cost of labor. Gradually, it is accepted that competitive advantage is gained through well trained and educated, motivated and committed staffs. The discovery is almost the same in various countries as training and development are identified as fundamental pillars of human resource development. However, the rate of investment in this essential components is different among nations (Brewster, 2007). For example, the United States spend up to 5% of turnover on training and development while countries like the UK spend 1.35% on the same.

Furthermore, the cost of hourly compensation for production workers in manufacturing firms in a country like Germany currently ranges at $26.7 while in Germany Mexico it as at $2.56. There is also inter- country differences in the number of hours worked and this needs to be considered while studying human resource practices. For example, in India, employees go to work from Monday to Saturday in the state government state department while central government department, they work from Monday to Friday. This has a far-reaching effect on human resource practices such as vacation between two different firms.

Labor Relationship Factors

A labor relation system reflects the collaboration between the state, trade union, and workers. Industrial relations and precisely the relationship between the union, employees, and the employers differs intensely from nation to nation and have a drastic effect on international human resource management (Schuler Budhwar & Florkowski, 2002). The wide variety of labor relation system all over the world have meant that relative and identification of types are accompanied by warnings regarding the limitations of untruthful similarities. An employment relationship system comprises of values of the society such as freedom of association and techniques such as work organization. Usually, labor relation system is a long characterized along national lines. For instance, some countries like Germany have been categorized as having cooperative labor relations model while countries like Bangladesh are known as being conflicting (Brewster, 2007).

Also, various systems have also been differentiated by having centralized collective bargaining where every employee is supposed to be a member of a trade union e.g. in Germany, while in other countries like Japan and the United States, collective bargaining is at the enterprise level. On the other hand, in some nations such as India, the state has a responsibility in the relation between employers and employees. The government sets rules and regulation on matters such as compensation and retirement benefits in such countries. It does this through an enactment of various acts such as minimum wage Act. At the moment, labor relation system are in transition as countries move from planned to free market. There is also a growing investigative work being carried out typologies of people employment relationship as signs of labor relationship systems (Brewster, 2007).

Economic Factors

Economic system among countries vary, and these differences translate into inter-country differences in human resource practices. For instance, in a free economic system, the requirement for efficient tends to favor the policies of human resource that value the employees competence and productivity where market forces prevail. When you at the social arrangement, human resource aims at preventing unemployment at the expense of sacrificing skill. As such, a multinational company is required to employee workers from the country that it has established its subsidiary to provide employment opportunities to the locals.

Some countries economic system still operate with a modified version of communism that has failed. For instance, in China, the allowed economic approach is communism. However, as the government strives to shift to more mixed model. It is using dismissals and unemployment to decrease government entities stuffed with too many employees (Chand, 2017).

Third world countries are open to foreign investment to create employment opportunities for the increasing population. Multinational firms get cheaper labor rates in such nations meaningfully as compared to western countries such as the United States and Japan. Nonetheless, whether the businesses can realize the profit in developing countries might be determined by restriction transfer of earnings and currency fluctuation (Chand, 2017).

Conclusively, as seen above, large inter-country differences in labor cost, culture economic system and industrial relations system influence human resource practices.

Global human resource management provides an organized outline for developing and managing individuals with the operative and strategic contradictions entrenched in global firms and that can manage cultural diversity. Because of differences in culture and economic factors, it is not impossible to come up global approach to global human resources management that accommodates everyone. This means that different styles of management, the structure, companys culture, and management policies have to be considered to the leading cultural attributes of the oversea country just as a careful balancing act is required between being international and local requirements. It is, therefore, necessary for the human resource manager to consider these influences and develop human resource practices for business undertakings that are carried out in the global market.References

Brewster, C., Sparrow, P., Vernon, G., & Houldsworth, E. (2007). International human resource management. London: Chartered Institute of Personnel and Development.

Chand, S. (2017). Perspectives of International Human Resource Management. Retrieved from, R. S., Budhwar, P. S., & Florkowski, G. W. (2002). International human resource management: review and critique. International Journal of Management Reviews, 4(1), 41-70.

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