In the context of globalization, countries strive to develop their national capabilities, regulate multilateral economic activities, strengthen the principles of equality and take an active part in international negotiations and international agreements. Despite globalization, the basic principles of international law, including the principles of sovereign equality, the creation of national culture, and States’ territorial integrity, retain their stabilizing importance. One of the decisive factors determining the company’s competitiveness in the world market is modern technologies and management methods.
International governance is becoming increasingly relevant, which implies the direct subordination of States to international structures. The work consists of three parts: introduction, analysis, and conclusion. The bulk of the paper presents the differences in national cultures of two countries: the United States of America and China, which are essential when evaluating the International Human Resource Management challenges and opportunities that their organizations face in work. Academic readings and relevant theories were analyzed to give a better explanation.
International human resource management is defined as hiring and improving the skills of employees of organizations that work not only in their own country but also in other countries or on a global scale. This means that to form and implement a strategy, policy, and practical measures for providing resources and professional development, most companies are now engaged in interactions across national borders (Lee et al., 2017). It is worth noting that this method of attracting employees imposes higher requirements than human resource management within one country.
International human resource management is not a simple copy of the practical decisions of countries. All practical approaches to it should be transformed, taking into account cultural aspects (El-Ghalayini, 2017). The main feature of IHRM is the need to study the nature of national cultures, which are very often difficult to comprehend (Luthans & Doh, 2018). All methods of management must be adapted to different cultures and local requirements. As a rule, the management of the personnel remuneration policy presents particular difficulties.
Differences in National cultures of USA and China
The latest achievements of China in the political, social, and economic spheres impress the whole world. Its people identify themselves with their country and are proud of these achievements, so the management of international companies needs to consider the national and patriotic feelings of the Chinese people. Foreigners in China should not do or say anything that may offend or provoke the national feelings of the local population. The following features are characteristic of the Chinese management culture:
Orientation in Chinese organisations is not on an individual, but group values. Group reference models of management activity have a priority value on the management development of companies. This act is a difference of Chinese IHRM policy from the one used in the United States. In the US rigid rationalism, individualism, pragmatism, self-reliance is greatly valued (Leach-López et al., 2019). The defining personal qualities of an American are the deepest individualism and confidence that only people can do everything for themselves, and, accordingly, exceptional independence in making and implementing decisions.
Another difference is that recognition of the social status of the manager and constant work aimed at preserving this status are essential in China. People have a respect for age and a higher position in the management hierarchy (Li, 2019). The development of management activities is carried out through the transfer of models. Chinese managers are focused on the accumulation of managerial experience on the example of higher-level managers.
In the US the Government, on the other hand, must ensure the legality and establish rules, after which it must, figuratively speaking, step aside and allow people to make their present and future. Americans always see life, business, personal, and other goals they want to achieve and are constantly charged with actions. Nevertheless, the attitude to other people and the communicative qualities of the American workers are characterized by general friendliness, frankness, sincerity, willingness to cooperate, and the desire to get all the necessary information. In this regard, Americans react very painfully to any manifestations of unfair play.
The importance of long-lasting relationships that determine the reduced requirements for the social adaptability of the manager’s personality and ensure the economic use of energy resources due to the stability of the social environment is also important. To successfully conduct international business in China, organizations need the right connections and avoid uncertainty (Wood et al., 2018). The Chinese are compassionate people who attach great importance to the relations between partners (Miedtank, 2017). The direct consequence of bad relations is enormous problems associated with constant disputes and quarrels with the Chinese side.
Political and legal issues are also of great importance in international management. In international business, any transaction is influenced by three political and legal environments: the country of origin, destination, and international one. Modern China is characterized by active state intervention both in the economy and international activities. The Government has assumed a leading role in guiding the transition to a market economy by creating all the central market-oriented institutions, both at the State and regional levels. Export activity in the country is entirely under the control of the state, and the decisions of the provincial authorities often determine its intensity.
The USA implementation of organizational management gives vital role to the initiative and responsibility of workers, the selection and promotion of personnel based on the assumption that an employee should and wants to be loyal to the organization hiring him, the willingness to dismiss employees whose work does not meet the established level. The motivation of employees is often made dependent on rewards and penalties. In comparison with other countries, US companies have open vertical and horizontal communications and a relatively informal nature between employees.
The peculiarities of the United States should include ethnic and religious diversity. In different parts of the country, employees may differ in their cultural traditions. At the same time, each of the fifty states has its legislation, which is reflected in the practice of personnel and human resources management. The United States accepts many immigrants, as a result of which this country, in the face of a declining birth rate, has a younger workforce.
IHRM Challenges and Opportunities
International human resource management (IHRM) aims to attract, develop, and maintain an effective workforce necessary to achieve the organization’s goals. Since this type of management is inextricably linked with the country’s culture, some problems may arise during its implementation. However, international human resource management offers companies several opportunities and prospects for their development.
Especially great difficulties arise when the culture and laws of the firm’s home country contradict the culture and laws of the host country. Zhu suggests that “relative positions of the home and host countries in the global economic hierarchy and the levels of institutional maturity within these countries, have important implications for international HRM patterns” (2019, p.1). For example, the current employment equality law in the United States, which prohibits discrimination based on gender, contradicts the customs of a country like China, where women are not allowed to work in purely male professions.
They cannot hold senior positions, especially in the field of medicine, politics and science. Such conflicts cause American managers who strive to ensure that their female managers have the same opportunities to work abroad as their male colleagues.
International enterprises also face more complex problems of personnel training and development. For managers selected to work abroad, human resource managers should provide training in appropriate cultural skills. Similarly, the training programs for industrial workers in the host countries should be adjusted to consider the level of education provided by the local educational system.
For example, Chinese corporations, such as Geely, Lenovo, that follow the tradition of a long employment, go to great lengths to hire the right people to their factories and offices. The company cooperates with the secondary education system, training to select future employees. However, this approach is not applicable in all countries where these companies operate because local school systems are often unprepared for such partnerships with individual firms.
Finally, economy, working conditions and the cost of living may differ significantly in different countries, so human resource managers often have to adjust payment systems to the needs of the labor market of a particular host country (Ayentimi et al., 2016). They should consider the specifics of local laws that may require the payment of the minimum wage or require companies to provide employees with certain benefits, such as annual bonuses or health insurance. In addition, managers should determine how to pay for managers working abroad, potentially facing a higher cost of living, deteriorating living conditions, and depression or stress due to separation from friends and relatives.
IHRM practices in organizations create new business opportunities and influence global competitive capabilities of the USA and China. Farndale et al. emphasize that “there is a great opportunity to learn more about how IHRM helps organizations compete effectively in a shifting age where rapidly evolving forces and megatrends affect workplaces” (2019, p. 4). Awareness of cultural differences and training of employees on this topic contributes to improving relationships at all levels of the organization and will improve the productivity and effectiveness of the company.
In addition, the specialized literature on IHRM offers ideas on personnel management that link the supportive leadership behavior of line managers with ways to implement general and individual personnel management practices (Van Harten et al., 2017). In addition to the above, IHRM allows organizations to remove language barriers and create a favorable image if the host country’s political or economic situation is unstable and reduces labor costs and the withdrawal of expenses related to cross-cultural training from the budget item.
International human resource management is one of the most critical components in the management of modern organizations, which can significantly increase efficiency, ensure competitiveness and stability. The management of human resources of an international firm differs significantly from the management of human resources in its own country (Michael, 2019). International human resource management is characterized by a more significant influence of environmental factors, a greater heterogeneity of management functions, and a differentiated approach to the training of managerial personnel.
The functions of human resource management in multinational companies are incredibly complicated by the need to adapt personnel-related policies and procedures to the differences between the countries in which each of the branches is located. In particular, cultural differences of countries, differences in economic development, and legislative systems may require an international company to adapt recruitment, dismissal, training, and remuneration programs for each country in which branches of an international company are opened.
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