International Management: Human Capital and Structure

Human Resource Management

When examining chapter 12 of “International Management” on human resource management, 3 particular points of interest reveal the inherent problems in dealing with employees in a multinational and globalized setting, these issues are: training issues, compensation practices and the problems that crop up when it comes to an expatriate adjusting to a local culture. The reason why I personally think that training issues are important is due to the fact that a company should and must develop their human resource infrastructure in a way that develops the skills and abilities of their workers in order to encompass varying types of company operations. By doing so this enables a company to respond to a diverse array of possible situations (i.e. expansion, downsizing, corporate restructuring etc.). For example, by training a workforce to be able to interchange tasks with each other in an effective and seamless manner this allows operations to continue as they are should one person be absent or go on vacation. Another factor that should be taken into consideration are compensation practices and how adequate/inadequate practices has an impact on an employee’s ability to work.

All multinational companies need to balance the necessity for profit and the need to properly compensate employees for their problems. Without doing so this can lead to poor performance which will definitely affect the bottom-line of the company. For example, an underpaid employee in an arduous position is more likely than not more willing to transfer to a different company that is willing to pay them more which will the result in the company he/she leave expending a significant degree of time and resources in finding a new employee. The last point of interest when it comes to human resource management in an international setting are issues related to expatriates and problems involving proper integration into a foreign business culture. What must be understood is that while a company brand and operations remains the same even when placed into a different country the local business culture still affects the means and methods in which employees tackle a job. At times expatriate managers find it difficult to adjust to these new circumstances and this as a result affects their performance. Companies need to take such a situation into consideration during their hiring practices since an ineffective expatriate manager can and often will create problems in regards to establishing proper operational guidelines and procedures.

The Future of International Management

In the chapter on international management, 3 interesting points were brought up, the first being the necessity for companies to be dynamic in an ever changing business environment, the need for constant innovation in the face of new competition and importance of adaptability as a result of trends in globalization. When it comes to the concept of being “dynamic”, this means that companies need to take into consideration changing factors in the business environment that they find themselves in and respond accordingly. This means shifting either to a customer based or competitor based strategy as the need arises in order to ensure the company survives.

The second interesting point was the need for constant innovation, the reason this is important is due to the fact that companies need to be able to innovate their products and services in order to appeal to changing consumer preferences. The last point of interest from the chapter was importance of adaptability due to globalization. What must be understood is that due to the technology oriented nature of most companies have significantly changed their practices as compared to 50 years ago. For example, the concept of outsourcing has resulted in a large percentage of products and services today being manufactured and transferred to international locations such as China and the Philippines. It is due to this that companies need to be able to adapt to the “new” way of doing business lest they find themselves to be obsolete.

Structure of International Firms

When it comes to the structure of international firms, 3 points of interest present themselves as interesting aspects of the chapter, namely: decision making structures, cultural differences, and the standardization of practices. First and foremost what must be understood is when it comes to the structure of international firms there is a necessity of the standardization of practices and policies. The reason behind this is simple, a company is expected to produce the same product/output no matter the location and as such needs across the board standard practices for this to occur. This is where decision making structures such as the centralized and decentralized models come in wherein an efficient and above all effective decision making structure is necessary in order to guide the firm as needed despite the distances involved. The last interesting point of the chapter is need for companies to take into account cultural differences in regards to the establishment of operational structures. The reason behind is connected to the fact that some business cultures often have a much more varied method of management and role assigning as compared to other business cultures (ex: Japan) and as such it is at times necessary to ensure that the corporate structure that is being implemented takes this into consideration.

Evaluation and Control

The chapter on evaluation and control elaborates on the various means of controlling and supervising employees, of particular interests are the topics related to power, approval and competitive techniques. Power techniques in my opinion are better served for organizations that have a top to bottom operational structure where strict compliance is necessary. On the other hand approval techniques are for me far more effective a means of controlling employees since it gives them a bit more “leeway” in their decisions. Lastly, competitive techniques can be considered a double edged sword for firms since while it encourages hard work it also results in the possibility of sabotage and lack on internal cooperation.

Works Cited

Ahlstrom, David, and Garry D. Bruton. International Management: Strategy and Culture in the Emerging World. Cengage Learning, 2009.