Assignment of Ihrm

7/23/2019 Assignment of Ihrm

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Summary

The research here is based on the idea of understanding through identification the training

practices adopted by MNCs based in Asia. The nature, expenditure of training programs is also

of concern in this research. The hypothesis of this study is not what benefit can be procured of

employee training but rather if training employees are viewed as an integral part of

organiational development deriving from the fact that how much MNCs in Asia actually invest

in such operations. This !esearch is primarily based on a range of five hypotheses. !esearch in

this topic earlier seems to produce primarily information on the fact that training investments are

emphasied on expatriates and international management. !esearches focusing on training

programs of locals wor"ing in MNCs subsidiary operations are too vague to be noticed.

!esearchers have gathered information stating that non#Asian owned MNCs spent more on

training their staff then Asian MNCs. And these local MNCs have the tendency to poach these

trained employees form their competing foreign counterparts. !esearchers have considered the

idea of a globally converged approach to $!M practices in MNCs but concluded them to be

unrealistic and difficult to accommodate because of institutional constraints. %xperts have also

ac"nowledged the fact that the diversity of international wor"force and their different attitudes

toward wor" and hierarchical authority would create constraints in adopting a globally uniform

approach $!M. Training practices differ from Asian to non#Asian MNCs. &t is noted that non#

Asians are expected to spend more on training practice than their counterparts. &n Asia education

level becomes a prominent factor in employee training. &n some cases it has been noted that

education and training has a negative relationship whereas others have a strong positive

relationship. Nonetheless it concludes down to the fact that employees in a managerial level

with greater learning ability gets more training then a clerical level wor"er. &t has also been noted

that the type industry plays a prominent role when it comes to training. &t is stated that people in

the manufacturing sector ac'uire less training than of service sector personnel. (ith wor" place

innovation as a prominent driving tool of training and service organiations having a compelling

need to adapt to wor" place changes we can conclude that service organiation do spend more on

training than its relative sector. &t is a common idea that larger firms would be able to spend more


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on training initiatives than smaller ones bringing in the aspect that firm sie does matter when it

comes to training development. Another notable fact would be that firms that are involved in

international trade are more li"ely to spend heavily on human capital development. This mean

that Asian owned MNCs that are reluctant to spend more on staff development will comply

when it competes internationally. )o, the extent to which a firm exports is lin"ed to the extent it

is involved in training. The higher portion of export a MNC has the more the need to provide

training. Along with the rapid economic growth in the Asian region more prominence is given on

human resource development to ensure successful cross border operations of MNCs. *revious

researches only focused on expatriate trainings for parent country nationals in MNCs+ with this

paper concerned researchers intend to answer 'uestions relating to type of training offered, sum

of expenditure incurred, people involved etc. in MNCs in the Asian region.

Findings:

The first hypothesis can be verified with the info that non#Asian owned MNCs spent

significantly higher on employee per annum in contrast to their Asian counterparts. Although

some Asian MNCs have spent more on training similar to that of non#Asian MNCs suggesting

that they are starting to ac"nowledge the benefits of adapting to global $! standards.

&nformation gathered have also showed that difference between the two is not that significant.

)o, hypothesis 1is partially agreeable. Hypothesis 2is confirmed by the fact that the number of

people wor"ing in managerial positions are rather limited compared to those of other wor" levels

and eventually got more training programs. &t was also noted that in Asian MNCs there is also a

shortage of s"illed labor. Hypothesis 3is maybe supported by the fact that studies showed that

service related MNCs do spend more on training then their manufacturing counterparts.

Although the support may be proven partial by the fact that the larger manufacturing MNCs are

more prone to training and are li"ely to provide to their production levels, which further states

that differences in sector may not be of maor relevance when it comes to training levels.

%xamination have also noted that firm sie does play a role as larger firms tend to spend more on

training than smaller ones comparatively which is the proving point for hypothesis 4. -astly

hypothesis 5is proved contradictory because mostly the Asian head'uartered MNCs tend to

export more in the region and mostly these are manufacturing MNCs. And the number of service

firms in the sample sie was significant. These services MNCs are more into serving local


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customers then exporting their offerings which ma"es compliance with the given hypothesis

rather complicated.

Introduction

ur chosen article was on /Training practices of Multinational Companies in Asia. The article

contains five hypothesis and findings of hypothesis according to Asia pacific context. )elected

Asian country was &ndonesia, Malaysia, *hilippines, )ingapore, Thailand and Taiwan which are

highly culturally diversified, culture oriented.The fact is that people from different countries act

or behave differently, some of these countries are cultural responsive, some are highly localresponsive. )o the outcome of training and development results differently also. Non#Asian

MN%s effort behind providing training to Asian host country will not be fruitful until non MNCs

get to understand which approach is best to apply on which country, are the non#Asian MN%s

needed to integrate their $!M practice to Asian MNCs practice or is it wise "eep local

responsiveness.

&t is 'uite difficult to decide or ma"e a standard for all MNCs whether it is Asian or non#Asian

MN%s. 0ecause different MN%s follow different approaches li"e ethnocentric, polycentric, and

geocentric. 1ocusing on this approach it is difficult to get desired output from non#Asian MN%s.

Many researchers suggest that to get good outcome company needs to universalie some

practices which are necessary to be similar all around world. )ome also argued that same types

of practices are not going to affect same way on different countries, on local culture responsive

people. 0oth convergence and divergence have advantages and wea"ness, they have few limiting

facts whichs May result alternative or unexpected result. &t is hard to put a solution of which

theory is the best for both *CNs and $CNs.

2iving importance on these facts it seems that it is a challenge for non#Asian MN%s to balance

local responsiveness and global integration. 1ocusing on training practice issue of non#Asian

MN% in Asian countries we have chosen our critical 'uestion that is3 $ow to overcome the


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Challenge of balancing the conflicting needs of global integration and local responsiveness or

divergence.

Critical Analysis

HR !ractice Issue in Asia:

&n Asia *acific region there have been significant economic and political developments in recent

times. *olitical and economic difficulties in several countries in the Asia *acific region provide

examples of the influence of externals factors on various aspects of management at national and

global levels. %very Asian#*acific country has its own identity and culture, each presenting its

own set of opportunities and challenges. 1or human resources professionals tas"ed with

maximiing competitive advantage through the management of human and intellectual resources,

this means coming to terms with individual local $! practices. 0ut MNCs especially from

%uropean and other (estern countries are designing more relevant and better 'uality training

programs to the employees wor"ing in Asia located companies. $ere the conflict starts. This

conflict is all about convergent and divergence. 0ecause MNCs are shaped by institutions

existing in their country of origin and the attempt to introduce these parent#country#based $!M

practices in their foreign subsidiaries. 0efore balancing these two factors of between $!M and

&$!M we have to understand meaning of /Convergent and /4ivergent in terms of &$!M.

Con"ergence in terms o# domestic HR and international HR:

Convergence is the act of oining two different things together as one thing. &n terms of &$!M

we can say it globaliing the practices which are proved best or practicing the standard. &n term

of convergence theory it is believed that all countries are subect to these forces, with similar

governmental roles in providing the wor"force, infrastructure and competition for the same

international investment. Convergence of $!M across national borders is, clearly, not a foregone

conclusion. 2lobaliation and international trade and finance may place substantial pressure on

firms to standardie practices and policies. -ocal customs, institutions, and labor forces do,

however, provide serious constraints on the degree of convergence and may well lead to

increasing levels of divergence. 5sually it is easier for organiations to have convergent policies


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or a universalistic approach as it helps maintain uniformity 6 does away with the cost 6 effort of

designing place specific policies. &t may also be easier to implement integration, but much more

difficult to internalie, certain $!M practices li"e training and development. Therefore, even if

there are /best practices, they may not bring positive effects until people fully accept and

approve them. Thus, /&t is easier to change the $! policies than it is to change the behavior of

employees.

Reasons #or Increasing Similarity:

Convergence or globaliation is the only method to practice the best things across organiation to

achieve the goal by removing barriers and confusions among managers and wor"ers. &t is the best

practice to improve the cultural, societal, personal and economical value of an organiation as

well as of a country. A "ey concern for organiations is how they manage the individual units.

The extent to which each units management can be consistent across different countries and

cultures depends on where on the continuum between global and multidomestic industries the

organiation lies. This is a maor differentiator of domestic and international $!M. Although the

term /management is present all over the world, its meaning can be somewhat different from

one country to the next, in order to understand it in each country, one must first have an

understanding of the culture, history, processes, philosophies and problems in that society. This

means that to assume management practices are the same all around the world, would be utterly

foolish+ careful analysis of particular countries in 'uestion first need to be underta"en before

such assumptions can be ustified.

$i"ergence in terms o# domestic HR and international HR

4ivergence is a variation that deviates from the standard or norm or we can say it difference. As

we have mentioned earlier that the main difference between domestic $!M and international

$!M is, the complexities of operating in different countries and employing different national

categories of wor"ers. That is, practicing $!M internationally is more complicated than

practicing domestically. Many organiations tend to use traditional tools to manage human

capital on global scenarios, based on the mere transfer of $!M solutions from the home country

to the international mar"ets. This choice often leads the firm to face several problems that may


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affect its economic results in the foreign mar"et. Cultural determinants still have a deep influence

on the Chinese society, and by means of shaping individuals behavior and their ways of thin"ing

and acting, they also affect business and organiational relationships.

!ro%lems &ith Con"ergence:

1rom the above we can distinguish two polar views 7with a variety within them8 that attempt to

explain national $!M systems. (hile many expect $!M practices to universalie and converge

over time, others would argue that practices are varied and specific, and they expect them to

remain so or even to diverge. &ndeed, even convergence at the global level in terms of economic

forces and technologies may result in divergence at the national and intra#national level, as these

forces are mediated by different institutions with their own traditions and cultures. verall, for a

number of reasons the prospects for convergence would appear to be low. These

9-imiters9 are3

7:8 Countries are at different stages of industrial and economic development,

7;8 4istinctive political#economic framewor"s,

7


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practices and assessing the underlying power dynamics .The dual need refers to the need for inter

unit lin"ages 7integration8 and the challenges faced by each affiliate in order to operate

effectively in its local environment 7responsiveness or differentiation8, sometimes referred to as

the internal and external fit of a MNC. &n one of the most recent )&$!M models, Taylor and

colleagues9 7:?8 have identified three different )&$!M orientations in MNCs3 i8 Adaptive, ii8

%xportive and iii8 &ntegrative. These orientations determine the company9s overall approach to

managing the tension between integration or the pressure for internal consistency and

differentiation or the pressure for external consistency.

Adapti"e:An adaptive )&$!M orientation is one in which the affiliates9 $!M systems reflect

the different local environments. 4ifferentiation is being emphasied with almost no transfer of

$!M philosophy, policies or practices either from the parent firm to its international affiliates or

between international affiliates. !esearchers propose that this orientation is more li"ely to be

adopted by MNCs who follow a multidomestic strategy, or if top management perceives that

$!M competence is context specific.

*+porti"e:An exportive )&$!M orientation is one in which the parent firm9s $!M system is

being transferred to its different affiliates. &ntegration is being emphasied with high internal

consistency among all units and reflects as previous literature described an ethnocentric

approach.

Integrati"e:An integrative )&$!M orientation attempts to ta"e 9the best9 approaches and uses

them throughout the organiation in the creation of a worldwide system The focus here is on

substantial global integration with an allowance for some local differentiation.

!esearchers propose that both an exportive and integrative orientation is more li"ely to be

adopted by MNCs who follow a global strategy, or if top management perceives that $!M

competence is context generalied.


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$egree o# local $i##erence

,he cultural component:

0esides the dual need for global integration and local responsiveness, another crucial factor,

mentioned in almost all )&$!M models, is the cultural context of $D and the different affiliates.

The cultural component of &$!M is the main reason that the same $!M policies will not

produce the same effects in different subsidiaries. *ractices with respect to selection,

socialiation, training, performance appraisal, reward systems and career development are all

being influenced by differences in cultural assumptions, beliefs and values. (ho to trainE (hat

"ind of training practices is acceptableE $ow to improve practices of training 'ualityE $ow

important is individual versus team effort and resultE All these 'uestions are very li"ely to be

answered differently in individualistic than in collectivistic cultures. 4ifferences in cultural

values reflect different assumptions about the nature of the relationship between employers and

employees and therefore lead to different interpretations and employees9 experiences of what

9good9 $!M practices are.

Conse'uently, cultural differences are main drivers in deciding which $!M practices can be

globally used and which $!M practices need to be locally adusted. 5nderstanding the cultural

embedded ness and appropriateness of $!M practices is therefore a first vital step in avoiding

the possible alienation or low morale which comes from imposing $! policies that are ill#suited

to the local culture.

,he political component

0esides culture as a critical factor in deciding the degree of local differentiation, the discussion

of the need for local responsiveness is li"ely to hide a political subtext. )ince each party wants to

reserve the power and autonomy to do things as they see fit, cultural differences may be used as

an excuse, a pretext for retaining local control. )uch underlying power dynamics will especially

drive the discussion if power relationships between the parties are changing. Conse'uently,

important s"ills for international $! managers are to assess not only the cultural implications of

$! practices but also the underlying political concerns.


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,he Implementation o# Integration IHR

&n any organiation, the primary obective of the human resource management 7$!M8 function

is to ensure that the most effective use is made of its human resources. To achieve this, $!

professionals underta"e a range of activities around sourcing, training, development, reward andperformance management, $! planning, employee involvement and communications. &f the

organiation has a strategic $! function, these activities will support and inform organiational

strategy. $! professionals are also used extensively in organiational change and development

initiatives. 1or international organiations, these $! activities need to be co#coordinated across

both the home country and different national subsidiaries and to ta"e into account the needs of

both parent country nationals 7*CNs8, host country nationals 7$CNs8 and third country nationals

7TCNs8. Now it is 'uestions that how do managers decide on appropriate &$!M policy choicesE

A critical challenge for all international organiations is the need to achieve best fit in relation to

the competing demands of global integration and co#ordination versus local responsiveness, the

Fglobal versus localG debate. 1rom a business perspective, forces for global integration include

operational re'uirements, strategic co#ordination and multinational customers. &n contrast, forces

for local responsiveness include highly diverse consumer re'uirements, tailored distribution

channels and broader social and political constraints to mar"et entry. 1rom an $! perspective,

there are many factors constraining the use of standardied $! practices including differing

national business systems, labor laws, national $! practice, education systems and national

cultural norms. rganiations may, however, still want to implement standardied $! systems

globally. Their choice depends to a great degree on their stage of internationaliation and

international mindset.

odels o# Cultural Synergy

ne way of experimenting with creative variations as a way to achieve a balance between global

integration and local adaptation may be grounded in models of cultural synergy. According to

Adler 7:@, p. :HB83 Iculturally synergistic organiations reflect the best aspects of all members9

cultures in their strategy, structure and process without violating the norms of any single culture.I

)ynergies are the benefits resulting from a decision that integrates differences and creates a

resolution that has more value than would be produced by a compromise solution. Managers in


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synergistic organiations do not ignore cultural differences nor do they approach culture as a

problem to be solved. &nstead, they use the cultural diversity as a "ey source in solving problems

or achieving outcomes. &mplementing an integrated &$!M approach according to the philosophy

of cultural synergy may therefore be a useful way to achieve an &$!M system that supports the

organiational strategy as well as is acceptable to all affiliates.

The idea of cultural synergy can be found in the wor" of both Adler 7:@8 and $oec"lin 7:>8.

(hile Adler ta"es a problem#solving approach to cultural synergy, $oec"lin adopts a value#

added perspective on culture. Adler9s synergistic approach to problem solving involves three

fundamental steps3 cross-cultural situation description. cultural interpretation. and cultural

creati"ity/ 2lobal managers #irst define the problem or describe the situation from the

perspectives of all cultures involved. Second, they culturally interpret the situation by analying

and explaining the patterns that ma"e each culture9s behavior logical from within its own

perspective. ,hird, they develop new culturally creative solutions that foster the organiation9s

effectiveness and productivity without violating the norms of any culture involved. Another

researcher $oec"lin argues that managers from each culture must ointly wor" through the

following steps3 10 agreeing on the specific outcomes that are desired from the interaction+ 20

understanding each culture9s way of doing things in trying to achieve the outcome+ 30agreeing to

an approach or create new alternatives, blending approaches which will lead to achieving the

desired outcomes+ 40 implementing the solution and reviewing the impact from a oint

perspective+ and 50refining the solution based on multicultural feedbac".

(hile the two models differ from each other in terms of starting the synergy process with a

problem to be solved or a desired outcome, their overall philosophy seems very similar. 0oth

authors stress the creative potential of cultural differences leading to new solutions and

approaches that transcend the existing differences. &mportant in this process of developing

culturally synergistic solutions are the assumptions of e'uifinality and cultural contingency.

%mployees and managers using synergistic approaches believe that 9there are many culturally

distinct ways of reaching a same goal 7e'uifinality8, but neither is inherently superior to the other

7cultural contingency8. They believe that creative combinations of all different ways produce the

best approaches to organiing and wor"ing. )o, only in those cases in which organiation

members explicitly recognie the concept of culture can the response to cultural diversity be

synergistic. 1urthermore, finding creative combinations that transcend differences re'uires


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flexibility and open mindedness. &t is through a flexible mind that one has the ability to benefit

from local thin"ing and to reemploy these ideas in other parts of the world, adapting them to new

circumstances. &mplementing such a synergistic approach is a systematic process at an

operational level. An organiation might address cultural differences at a strategic level by ta"ing

decisions that signal the importance of culture. %xamples of such strategic decisions are

internationaliing the management team, selecting expatriates from all over the company instead

of only from head'uarters, or setting up cooperation between affiliates. )uch strategic

interventions are important and valid steps since they encourage the meeting of two or more

cultures. 0ut companies are advised to move beyond such type of tolerance and cooperation and

to begin to build cultural synergies at an operational level. (hile operational, this process of a

synergistic approach is not a 'uic" fix, but instead a systematic process.

&n introducing culturally synergistic problem solving or value adding to an organiation for the

first time, the process must be addressed explicitly and formally through wor"shops, seminars

and structured meetings. The process should also be seen as a continuing, evolving process rather

than an isolated event to solve a particular problem. -ater, such synergistic processes will

become more implicit, more informal, and considerably less time#consuming since the learning

ac'uired during initial sessions will become part of the organiation9s increasingly global

perspective and cross cultural competence.

2oing bac" to the three different &$!M orientations of an exportive, adaptive and integrative

approach, it is only an integrative approach that may have the potential of a culturally synergistic

approach to $!M. The two other approaches, an exportive and an adaptive orientation, seem to

ignore the possibility of cultural learning.

A Culturally Synergistic Approach to an Integrated IHR

The purpose of this approach is to offer &$! managers guidelines of how to implement

a process through which an integrated &$!M system may be realied. )ince the implementation

of a culturally synergistic approach to &$!M will ta"e place at the operational level by

wor"shops and meetings, the studies on international teams will help in identifying the

conditions of how to ensure a meaningful participation among the different $! managers. The

principles relevant for a fair global strategic decision ma"ing process will offer us additional


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insights in how to set up a fair decision ma"ing process. The culturally synergistic &$!M model

distinguishes two basic cycles of activity # one that occurs prior to any decision or action, and

one that occurs after a decision to act has been ta"en. ,he #irst cycleconsists of five stages3 :8

felt need for an integrated &$!M practice, ;8 4eveloping an super ordinate goal, 8

decision ma"ing by consensus. ,he second cyclethen involves ?8 ta"ing action steps, and @8

evaluation of the outcomes of the action steps. &n each stage there are common traps. Awareness

of these traps can help &$! managers to focus on conditions and interventions that overcome

these traps and that stimulate constructive wor"ing relationships leading to creative combinations

of $!M practices.

Conclusion

An integrated &$!M approach is confronted with the challenges of finding a balance between

global integration and local responsiveness, understanding the cultural embedded ness of $!M

practices, and correctly assessing the political concerns of the affiliate units. The underlying

logic of the culturally synergistic approach as well as the suggested interventions when trying to

implement this approach seem to provide a possible way of dealing with these three challenges.

Most scholars in &$!M tend to lin" the global#local duality to the discussion of $!M

competences and practices that are context generaliable or context specific. (hen $!M

practices are generaliable, affiliate practices can be transferred to the parent company and vice

versa. (hen $!M practices seem to be context specific, no transfer can occur. 1ollowing this

logic, an integrated approach of &$!M combines both characteristics of the parent company9s

$!M system with those of its affiliates. &n contrast, a cultural learning model stresses the

possibility of mutual dialogue leading to creative variations of $!M practices. &nstead of simply

transferring practices, a culturally synergistic approach to &$!M can create new practices by

recogniing and transcending the individual cultures. &$! managers may find a balance between

global integration and local responsiveness when they explore best practices of different cultures,

try to understand how these practices lead to the desired outcome and then try to create new

alternatives by blending and combining practices. )o, the challenges of the dual global#local

need and the cultural embedded ness of $!M practices can be dealt with exactly by utiliing and

valuing cultural differences instead of approaching these cultural differences as a problem to be

solved.


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Additional !art

As the verdict of the article states that 1oreign owned MNCs do indeed have the financial

bac"ing to emphasie more on training and development of the human resource.

&n relevance to that "nowledge lets loo" at the first $J*T$%)&), which states the assumption

that concludes the above verdict. (e have companies li"e 5niliver and Telenor present along

with many others. 1or obvious standards, these companies do have more financial bac"ing to

train their employees. Then again, another factor may have some relevance to the findings

concerned. The fact that these companies are coming from developed first world countries.

0ased on their standard of living and the stage they are in, according to their economic

development, these companies will be more obliged to emphasie on $!M development. (here

as in 0angladesh our organiation still dont consider $! systems with that much prominence.

This is where the second $J*T$%)&) comes in which states managerial and professional level

staffs get more training then clerical level staff. Again as a third world country we have a surplus

of the clerical and production level wor"er and the organiations here that has a surplus of such

wor"er are the garments industry which consist a maority of our export nowadays. )o we can

conclude that is accordance to the maority wor"ing population in our country we do have morewor"ers in the labor class. &n reference to some local companies they are relactant to spend much

on training that class of wor"er but more on the managerial level.

ne of the "ey findings came from $J*T$%)&)


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Re#erences:

CN%!2%NC% AN4 4&%!2%NC% &N A)&AN $5MAN !%)5!C%

MANA2%M%NT 0JChris Rowley and John Benson

A C5-T5!A--J )JN%!2&)T&C A**!AC$ T &NT%!NAT&NA- $5MAN

!%)5!C%

MANA2%M%NT3 &M*-%M%NT&N2 AN &NT%2!AT%4 A**!AC$By M.

JANSSENS

&nternational $uman !esource Management3 Asia *acific Challenges By Helen De Cieri

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