Discuss about the Human Resource Strategy for Formulation and Implementation.
International Business Management is one of the most crucial tasks of the organizations (Cavusgil et al. 2016). The modern organizations are not restricted to one geographical location but are expanding to diverse geographical locations. This implies that it is essential to control the business operations based in a foreign location in a perfect manner. The study of international business management would enhance the capabilities of the managers to effectively manage the resources in a global economy (Wild Wild and Han 2014). The managers need skills as well as knowledge beyond the normal business expertise. They need to be familiar with the international leadership style, business regulations of the specific country, clear understanding of the local laws and others (Cavusgil et al. 2016). In addition to this, they need to be knowledgeable about the change management, motivation and management of diversity in an international context. One of the most important tasks of the managers is to demonstrate effective people management skills in a global workplace (Moran Abramson and Moran 2014). It is also important to have an effective framework for measuring performance across all the business operations. It is obvious that there would be obstacles in the way of effective performance management across global locations (Cavusgil et al. 2016). This report would discuss about the issues faced by an organization in dealing with a “performance management” program spanning across several geographical locations. It would be followed by solutions for addressing the issues. The all-round business operation principles in relation to the people management are discussed such as leadership style, change management, motivation and diversity management. The organization selected for the purpose of study is Emirates Airlines.
The leadership styles in Emirates Airlines are important criteria to be considered for the cross-border management of the teams. The cross-cultural leadership aims to understand the functioning of the leaders in a globalized market. The implicit leadership theory states that the people would perceive the leaders as good or average based on their underlying assumptions, beliefs, stereotypes and others (Epitropaki 2013). This is the reason that the employees residing in different countries perceive a particular person in a different manner. The Hofstede’s Cultural Dimensions underlines the five different dimensions of culture which are used for the comparison of cultures and gives insights to the leaders (Epitropaki 2013). The concerned person can modify their leadership styles after considering the analysis of the cultural dimensions of different countries. The “Globe Leadership and Organizational Behavior Effectiveness Research Project (GLOBE)” combines both aspects of the implicit leadership theory and the Hofstede’s cultural dimension (Chhokar Brodbeck and House 2013). This focuses on the fact that there are certain individuals who maintain stable belief regarding the leaders that may vary from one culture to the other. The leadership is a universal phenomenon in which it is essential to modify the leadership styles based on the chosen country and their characteristics (Chhokar Brodbeck and House 2013). The transformational leadership determines the way the effective leaders must inspire the followers by addressing their emotional requirements (Avolio and Yammarino 2013). This leadership approach creates valuable change in the followers. The primary goal of this kind of leadership is the transformation of thee followers into leadership by imbibing suitable characteristics of the leaders (Avolio and Yammarino 2013). The charismatic leadership comprises of the encouraging of several behaviors in the followers such as personality, eloquent communication and persuasion (Oreg and Berson 2015). These kinds of leaders persuade the followers to do their tasks in a better manner. In this age of technological advancements, it is possible to influence the followers who may or may not be based on same geographical locations (Oreg and Berson 2015).
The change management is one of the most important approaches for the transformation of the organizations. The transformation can be done with respect to individuals, teams or the business methods (Hayes 2014). There can be changes in the budget allocation or the operation modes. The Kotter’s 8 step change model is one of the most important used for understanding the phenomenon of change management (Appelbaum et al.2012). Kotter suggested that in order to bring in successful change management in the process, it is important to follow eight steps of change-
- Establish a sense of urgency- The need for change should be communicated to the team members and they should be convinced regarding their importance (Appelbaumet al. 2012).
- Creation of guiding coalition- The team members who possess should be assembled so that they can lead the change management process.
- Development of change vision- The creation of vision is important to direct the efforts concerned with change as well as formulation of effective strategies (Appelbaumet al. 2012).
- Communication of the vision- The transfer of information, vision and the strategy of change is important since it would help the team to understand their role in the change management process (Cummings and Worley 2014).
- Removal of barriers- It is evident that the change management process would come with several barriers which need to be addressed (Appelbaum et al. 2012). This would encourage the risk-taking behavior in the team.
- Generation of short term wins- This step would involve the planning for the achievements (Appelbaum et al. 2012). This would also involve the rewarding as well as recognition of the employees for being part of the change process.
- Sustain the acceleration- It is important to use credibility for changing the systems, policies, structures of an organization. It is also important to set the infrastructure for fostering the implementation of the vision. These would include the recruitment of suitable executives and reinforcing the process of new projects as well as the change agents (Appelbaum et al. 2012).
- Incorporation of the changes- It is important to articulate connection with the new incorporated behaviors and the new levels of organizational success.
The strategy of utilizing the best practices for the creation of a diverse as well as inclusive workplace is known as diversity management (Harvey and Allard 2015). In cross cultural management, the successful management of diversity is one of the crucial modes of achieving business excellence. There are primarily two types of diversity management theories which are being used by the organizations (Harvey and Allard 2015). They are institutional theory and the resource based theory (Armstrong and Taylor 2014). The institutional theory believes in the fact that the organizational structure cannot be separated from the social environment of the organization (Suddaby2014). The structure of an organization is dependent on the behavior of the employees. The theory also believes that the organization possess limiting factors like regulations, rules, laws and social norms. The resource based theory represents the procedure of the implementation of diversity which would have an effect on the resources of the organization (Barney 2012). The organization possesses four segments of resources such as financial capital, physical capital, corporate capital and the human capital. These resources are used by the organization for business improvements. The racial diversity corresponds to an increasing financial performance of the firm when there is implementation of an innovation strategy (Harvey and Allard 2015). The theory also explored those organizations that possessed more “diversity management” practices experience low turnover rates, which resulted in an increase in the organizational productivity. For example, in an organization, where there are employees from Japan, Greece and UK, then the organization must incorporate employee engagement policies, in which there would be mutual cooperation among the employees.
The motivation is one of the driving factors for organizational performance. The motivated employees would perform in a better manner and there would be elevated level of performance (Mowday Porter and Steers 2013). The employees would be motivated if their needs, behaviors and preferences are met. The employee satisfaction is directly related with the increase in the motivation level of the employees (Mowday Porter and Steers 2013). The Maslow’s Hierarchy of needs theory identifies five needs of human beings which are self-actualization, esteem, love or belonging, safety and physiological (Lester 2013).For example, the physiological needs include the need of basic needs such as food, water and sex. The safety needs would include the freedom from violence or prison. The belongings need comprises of friends, family and the clubs (Lester 2013). The esteem needs may include approval from the friends, family and others. The self-actualization needs are considered as the ultimate need and it is believed that if this need is satisfied then the individual would be happy from within (Lester 2013). The satisfaction level of the employees would be dependent on the fulfillment of these needs. The organization must take appropriate steps to fulfill the needs of the employees even when they are located in diverse geographical areas.
Ethical approach of management
The cross-cultural management of the firms must ensure that the management of the business is done in an ethical manner (Kuntz et al.2013). There should be specific guidelines that should be formulated for encouraging the ethical business aspects. The managers should identify the types of ethical conflict that arises in the organization and must take preventive actions (Zhu Sun and Leung 2014). For example, giving of gifts is not prohibited in most cultures. However, in some other cultures, the gifts may be considered as a method of bribery and hence is considered as unethical. The culture of a country is directly related to the ethics and the manager of the company should have knowledge about the cultural aspects of the country in which the organization has its business presence.
Performance Management challenges
The multinational companies incur a high degree of cost in their recruitment and engagement of their human resources (Bamberger Biron and Meshoulam2014). Emirates Airlines has its headquarters based in Dubai, however, it manages its operations on several other countries too. This makes them to manage the international employees from their home locations or from the concerned locations. The management of the international human resources and monitoring their performance is a big challenge for the organizations (Ward and Peppard2016). The performance of the employees should be aligned with the strategic requirements, organizational needs and the customer preferences. The multinational companies encounter a lot of critical challenges while managing the performance of their employees (Bamberger Biron and Meshoulam 2014).
The global recession has posed several challenges for the organizations (Peng 2013). It has directly affected the compensation structure of the organizations making them vulnerable to pay cut or demotion of the existing employees. The companies are unable to provide adequate compensation to their employees which have caused the employees to suffer from lack of motivation of work (Bamberger Biron and Meshoulam 2014). This is one of the reasons of their low job performance, which has decreased the organizational productivity.
There are issues with the integration of the performance monitoring in the global locations (Parsons et al.2012). The managers are required to use different appraisal methods for employees located in different geographical locations. The decision making of the subsidiary may vary from the decision-making activity of the headquarters. The policies applicable for the headquarters may not be applicable for the foreign locations. There are issues with the format of the performance measurement tools (Parsons et al. 2012). There can be various parameters such as return on investment, profits, productivity, cash flows, punctuality and the number of customer complaints (Morrow et al.2015). In some other geographic locations, there can be application of other qualitative parameters such as motivation level of the employees, leadership, adaptability and judgment capabilities. There is confusion regarding the performance management formats to be followed by the headquarters or the alliance firms(Parsons et al. 2012). Experts may opine that there must be uniformity of the policies undertaken by all the branches of the organization. There are instances when the performance management techniques are not aligned with the environmental factors. There are issues with the uniformity of the “performance data”. There are instances when the traditional performance reviews do not give the optimum results (Parsons et al. 2012). The traditional performance reviews are done annually (Lawler Benson and Ledford 2016). However, there are instances when the manager wasted one year for providing corrective actions to the employees. This prevents the employees from enhancing their skills as well as knowledge. The uniform performance scales cannot be used for measuring the performance in all geographical locations (Rolstadas 2012). There different cultural variations and environmental influences which differs from one country to the other. The environmental factors gained prominence after the recent events of globalization which demonstrated trends of inflation (Rolstadas 2012). The performance measurement process becomes complicated with the distance as well as time variations (Dey and Cheffi 2013). The performance measurement of the employees located in the foreign locations is difficult than those of the domestic candidates. If the appraisals are being controlled from a centralized location (e.g. headquarters), then there may be fabrication of the original facts since both the parties do not have face-to-face interaction (Dey and Cheffi 2013). There may be rater’s bias while measuring the performance of the employees (Breuer Nieken and Sliwka2013). There can be halo effect, error of central tendency, personal prejudice, leniency and others. The performance evaluation process fails to incorporate the cultural parameters in the job performance (Parmenter 2015). It is obvious that the adjustment to the organizational culture depends largely on the national culture of the country. This factor is often omitted from the performance evaluation criteria. It is often difficult to construct cross cultural analysis based on various exaggerated “cultural stereotypes” (Breuer Nieken and Sliwka 2013). There are times when it is difficult to distinguish between institutional arrangements and cultural values. There are often instances when it is difficult to give proper codification to the performance of the employees. Some activities of the employees may be considered as unaccepted and may call for a disciplinary action. However, the same activities, can be considered as culturally driven activities. It often becomes difficult to manage the employee’s performance in diverse countries due to high uncertainty avoidance. It is also difficult to devise a suitable compensation package for the cross-cultural teams.
Solutions to the challenges
There are performance management issues of the firm which should be addressed properly. The first issue deals with the inadequate compensation package being offered by the company. This can be solved by performing an in-depth analysis of the job requirements. It is important to perform requirement mapping in which the exact manpower needs would be identified. If there is correct identification of the manpower needs of the organization, then the recruitment strategies can be done effectively. This would prevent any redundancy in the employee recruitment which would prevent the organization from having unwanted human resources. This would enable the company to provide correct compensation package to the employees. The managers must use diverse monitoring methods for different countries, which would be done after sufficient market research. The best suitable method would be applied for a specific country. The different performance measurement tools should be applied to different geographical locations as per their suitability. For example, in accounting jobs in Singapore, it is essential to check the financial skills of the employees, whereas, in customer service jobs in UK, it is essential to measure the motivation level of employees. It is also important to customize the performance management formats according to the needs of the specific country. It is not advisable to measure performance annually, which is done by the traditional performance management system. A monthly performance management plan is important which gives continuous feedbacks to the employees. If the employees are constantly presented with their level of performance, then they can take corrective actions towards it. The cultural variations should be incorporated in the performance management scale. It is important to understand that the time as well as distance of the individual countries is different and hence it is important to include them in the performance management system. Prior effort should be undertaken in order to minimize the rater’s bias. It is important to allocate sufficient weightage to the cultural dimension in the performance management system. It is also important to break the cultural stereotypes by fostering transparent communication methods between the countries of business operations. There should be clearly laid down laws regarding the integration of cultural values and the institutional arrangements so that there is greater fulfillment of the performance management objectives. The organization must document the categorization of different types of behaviors demonstrated by the employees. It is important to document the types of behaviors that would be documented for disciplinary action. It is important to understand the culturally driven activities. It is also important to design suitable compensation package for the employees which would attract, retain and accelerate them to give their best performance.
The international business is one of the most important aspect of the modern-day organizations in which they are not limiting their business prospects to a single geographical location. They are crossing the different national barriers for better prospects in the business. This report identified the different leadership styles related to cross cultural management. The central leadership styles are discussing such as implicit leadership style, Hofstede’s Cultural Dimensions, Globe Leadership and Organizational Behavior Effectiveness Research Project (GLOBE), transformational leadership and charismatic leadership. The change management process is discussed by identifying Kotter’s 8 step change model. The model is being explained in detail along with the practical implications. The diversity management is discussed by integrating the theoretical as well as practical aspects. The institutional theory and the resource based theory are discussed along with their implementation in organizations. Motivation is one of the important drivers for performances and hence it is discussed in detailed by connecting it with Maslow’s Hierarchy of needs theory. The ethical approach to management is discussed in brief. The performance management challenges are critically analyzed from 360-degree perspective. The corresponding solutions for the identified issues are discussed. This report would broaden the understanding of the different issues involved in performance management which is embedded in the overall cross cultural management context.
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