In the modern business industry, human resource management (HRM) is of particular importance. It is an effective tool for achieving the successful functioning of the organization. This is due to the fact that a lot directly depends on the company’s employees, in other words, the human resource. Their management is aimed at improving the results of the organization’s activities and maintaining competitiveness. In this paper, the features of international human resource management are studied, and the question of the exclusivity of HR as an element of leadership in an organization is considered.
International human resource management (IHRM) may differ significantly in several countries. The reasons may be external factors that have a serious impact on the businesses. Moreover, IHRM is characterized by a greater diversity of management strategies and functions and an approach to staff training (Pucik et al., 2017). Such differences can become an obstacle in adapting the company’s policy to the peculiarities between countries, in the case of, for example, opening branches. Cultural differences of countries, economic development, and legislation may require the adaptation of strategies related to human resource management for each country in which new branches of an international company are opened.
The cross-cultural aspect has a special influence on the formation of international human resource management of any business organization. This is due to the fact that with the development of the business sphere, the need for the introduction of a cultural approach to management increases (Bonache and Festing, 2020). In addition, the diversity of cultures and practices of conducting international projects is growing. All these factors make it possible to consider HRM as a tool for making effective decisions in conditions of cultural and linguistic peculiarities.
The influence of the cultural aspect in human resource management has gained particular popularity due to the acceleration of globalization processes in all spheres of human life. Cross-cultural management is a fundamental part of IHRM, which provides the development of technologies for teaching effective business management in conditions of cultural diversity in order to prevent cross-cultural conflicts (Romani, 2018). Thus, the cultural characteristics of nations become one of the driving components of the development of companies.
However, several problems may arise in this practice. The first group of difficulties consists in the emergence of a language barrier, misunderstanding at the level of principles and standards of behavior, and problems of adaptation to life in another country (Aswathappa and Dash, 2020). The second set of the issues is related to the strategies of companies facing a different culture. They arise if the heads of the organization ignore and do not take into account national peculiarities, which ultimately leads to significant economic losses.
Values, norms, and rules of various countries play an important role in shaping the cultural values of the organization and HRM practices. These aspects have a direct impact on the formation of the needs, attitudes, and norms of the organization’s employees. They will identify patterns of behavior that contribute to both improving the effectiveness of the organization and reducing it. It is worth noting that it is the values brought from the corporate and professional culture of individual employees that have a special impact.
The second approach that is also of great importance when talking about IHRM is the institutional approach. International companies face serious problems when organizing the process of employment and staff development. Managers need to additionally provide people with training in appropriate intercultural communication skills and form an appropriate system for hiring or firing from it. All these programs should also be adjusted to take into account the level of education provided by the local educational system. New requirements for HR managers are associated with global strategies and approaches to managing a diverse workforce. Despite the differences in HRM in countries, it is important to observe the main principle. It consists in educating employees to be interested in the successful operation of the company.
As such a difference, the example of the systems of the United States of America and European countries can be cited. An essential feature of American policy in the field of maintaining employment is the spread of economic democracy in production. In the European Union, in turn, a more developed system of trade unions is widespread. It is characterized by the significant participation of employees in the management of production processes.
Finally, working conditions and the cost of living may differ in different countries. This factor influences the fact that international companies have to adjust payment systems to the needs of the labor market of a certain country. At the same time, legislation should be taken into account, which may have its own peculiarities regarding minimum wage requirements or the provision of certain benefits. In addition, managers should determine how to pay for the work of managers working abroad who are faced with factors such as the differing cost of living or deteriorating conditions and stress.
The last important approach of international human resource management is international HRM. It implies the ways in which countries manage their HR across multiple countries. They include the specific role and organisational behaviour of multinational corporations and transnational companies. An effective business policy in an international company should be based on a comparison of a number of factors that will contribute to achieving the set goals and meeting the needs of employees.
Business internationalization is a functional strategy that can ensure the fulfillment of all the goals and objectives of the organization. One of the difficulties of such an introduction is that there are cultures in which people, for example, are used to planning their lives ahead, that is, they have a long-term orientation, which is more evident in the countries of Southeast Asia. And there are cultures where exposures are short-term, where people are not inclined to plan anything, make decisions about their lives emotionally, according to circumstances. Such aspects can seriously affect the formation of an organization’s work plan, its installations, and human resource management strategy.
The main challenges of internationalization of business and global HRM are overcoming the differences of national cultures, which are manifested in the peculiarities of the processes of running a company. This is due to the work of the organization in different cultures, so the same business parameters can give different results depending on the cultural environment. Such parameters can include the amount of capital, the number of employees, methods of stimulating labor productivity.
This section of the paper discusses whether globalisation will force human resources practices to be the single best practice everywhere in the world. The process of globalisation has a direct impact on the business sphere. Human resources are of great importance for the effective management of international companies and their organizational culture. The strength of this process is also the creation of a large personnel reserve (Kianto et al., 2020). This gives a possible choice but however, increases the likelihood of cultural barriers in the hiring process. Ignoring this problem can make the hiring process more time-consuming.
The practice of personnel management in modern business conditions has been undergoing various changes for a long time. One of the most important factors is the process of globalization (Anwar and Abdullah, 2021). It puts the global economy in a position where effective decision-making becomes more significant and requires careful and detailed analysis. This is also due to the fact that at this stage of the development of the economy and business, it is much more important to attract and correctly use all kinds of human capital and not the financial resources of the organization.
Moreover, globalization increases competition, removes obstacles to the introduction of business in developing countries, promotes economic growth and the unification of the world economy. Burlacu et al. (2018, p. 124) state that the positive aspects of globalization are “reduction of the sense of isolation of poor countries, increase of the speed of commercial, financial and technological operations, and efficiency of the entire economic activity at the planetary level”. However, with the integration of the economic sphere comes interdependence. This can greatly affect organizations, as negative events in one country can have a significant impact on the economy of others. For example, the economic growth of one country may mean the economic decline of another.
To support the view that globalisation will eventually force similar HR policy towards a single best practice can be in the fact that it in the field of HRM erases the boundaries of the organization’s activities in these aspects. This fact requires the creation of conditions that unite all resources and direct them to achieve the company’s goals (Ahammad et al., 2020). In turn, this requires the creation of solutions related to the creation of adaptive corporate structures and training programs for specialists.
Management in the context of globalization and internationalization involves the study of employee behavior in organizations around the world. It is vital for a manager to think more in global categories (Michael, 2019). Thus, when working in a constantly changing environment, it is necessary to know the characteristics and features of international relations and foreign markets. Of particular importance is the detailed study of cultures and cultural differences of representatives of different nations.
Organizations must take into account the values, expectations, and culture of employees in order to successfully conduct international human resources management policies and strategies. Success, in this case, is primarily determined by whether the business has managed to create a successful HRM system and get rid of tension between employees representing different cultures, views, and beliefs (Carbery and Cross, 2018). Globalization will be an effective solution for HRM as it removes differences between cultures and adapts them to each other.
The fact that the process of globalization of the economy and business has not only positive but also negative sides cannot be overlooked. However, globalization is an objective and inevitable phenomenon in modern society. It can only be slowed down by means of economic policy, but it cannot be stopped. For this reason, we can agree with the opinion that this process will soon lead to the fact that human resource management will become the best practice for business.
The choice of which plan will correspond to the business in the international arena is associated with quite high risks. Such difficulties include the problems of attracting foreign markets by means of changing products, difficulties related to different currencies, and predicting costs and profitability. The last aspect should be based on forecasting the movement of exchange rates. Moreover, it is important to note that a company can be exposed to different cultures, which can create significant management problems. This is especially due to the possibility of political risk associated with the fact that foreign deposits may be limited by government policy.
The main advantage of human resource management is that it is a specific management function. Recently, it has become increasingly important, since the competitive benefits and efficiency of the enterprise depend on the results of using the main resource – a person. Because of this, the requirements for the employee increase, the importance of a creative attitude to work and the professionalism of the employee increases. The approach to human resource management includes several processes.
Therefore, it should be a combination of various HRM tools, such as corporate planning, strategy development, the desire to attract innovations that have greater efficiency, ensuring the competitiveness of the enterprise. There are two roles in enterprise human resource management: strategic and operational. The strategic role is characterized as global, long-term and innovative. It is based on the fact that the personnel becomes the key resource of the organization, and the competitive advantages of the organization are associated with this resource if properly managed.
Thus, human resource management is presented as a useful tool for achieving the strategic goals of the organization by investing in the development process of employees. Moreover, attention is paid to the process of increasing their work motivation, as well as focusing on the role of the manager in the process of labor organization. The goal of HR management is to recruit competent and interested employees, as well as the ability to retain them, improve their professional training. Moreover, it is necessary to note the significant role of globalisation in the formation of human resource management practices. It has a direct impact on this area, as there is a process of mixing cultures in it. Therefore, the company’s work should be aimed at the introduction and understanding of cultural values.
Ahammad, M. F., Glaister, K. W., and Gomes, E. (2020). ‘Strategic agility and human resource ‘management’, Human Resource Management Review, 30(1).
Anwar, G., and Abdullah, N. N. (2021). ‘The impact of Human resource management practice on Organizational performance’, International Journal of Engineering, Business and Management (IJEBM), 5.
Aswathappa, K., and Dash, S. (2020) International human resource management. India: McGraw-Hill Education.
Bonache, J., and Festing, M. (2020). ‘Research paradigms in international human resource management: An epistemological systematisation of the field’, German Journal of
Burlacu, S., Gutu, C., and Matei, F. O. (2018). ‘Globalization–pros and cons’, Calitatea, 19(S1), pp. 122-125.
Carbery, R., and Cross, C. (2018) Human resource management. United Kingdom: Macmillan International Higher Education.
Human Resource Management, 34(2), pp. 99-123.
Kianto, A., Sáenz, J., and Aramburu, N. (2017). ‘Knowledge-based human resource management practices, intellectual capital and innovation’, Journal of Business Research, 81, pp. 11-20.
Michael, A. (2019) A handbook of human resource management practice. London: Kogan Page Limited.
Pucik, V., Evans, P., and Björkman, I. (2017) The global challenge: International human resource management. Chicago: Chicago Business Press.
Romani, L., Mahadevan, J., and Primecz, H. (2018). ‘Critical cross-cultural management: Outline and emerging contributions’, International Studies of Management & Organization, 48(4), pp. 403-418.